4 October 2023
Rockwood Strategic plc (LSE: RKW) today provides an update ahead of publication of its unaudited results for the six months ended 29 September 2023 (the “Period“).
Highlights
| · | Net Asset Value (NAV) Total Return in the period of -5.5% to 1851.59p/share which compares to a decline in the FTSE AIM All Share Index of -10.3% and an increase in the FTSE Small Cap (ex-ITs) Index of 2.9%. Total Shareholder Return in the Period was -2.5%. |
| · | NAV Total Return performance in the year to 29th September 2023 of 28% which compares to the FTSE AIM All Share Index of -9.9% and the FTSE Small Cap (ex-ITs) of 8.8%. The Total Shareholder Return in the same one year period was 25.4%. |
| · | NAV Total Return performance in the three years to 29th September 2023 of 80.3% which compares to the FTSE AIM All Share return of -24.3% and the FTSE Small Cap (ex-ITs) of 35%. The Total Shareholder Return in the same three-year period was 114%. |
| · | No. 1 ranked fund over the last 3 years by Total Shareholder Return and Net Asset Value Total Return in the AIC UK Small Companies sector. |
| · | At Period end the Company’s shares traded at a discount of 4.1% to NAV/share, narrowing from 7.1% at the beginning of the Period. A total of 146,863 shares were successfully issued at a premium to NAV/share, growing the total number of shares issued by 5.7%. |
| · | Net cash of £3.5m at the end of the Period, representing 7% of NAV, having reduced from 21.2% in March 2023 due to 4 new investments and increased investment in existing portfolio holdings. |
| · | 21 Period end holdings, with the top ten investments cumulatively representing 64.3% of NAV. |
| · | Sub-division of Rockwood’s shares on a ten for one basis announced separately today, with sub-division effective on 11 October 2023. |
Portfolio Highlights
| · | Recommended cash offer announced for Finsbury Food Group (unrealised IRR 38.5% at Period end). |
| · | Significant management change across a range of recent investments, as pre-identified catalysts for improved operational performance occur, including: o Mike England appointed CEO of Flowtech Fluidpowero Simon Goodwin and Christopher Humphrey respectively appointed CFO and NED of RM Plco Iain Percival and Serena Lang respectively appointed CEO and Chair of Trifasto Zyllah Byng-Thorne appointed Executive Chair of M&C Saatchio Charles Skinner appointed CEO of Restoreo Stephen Welker appointed Chair of Hostmore |
| · | Material special dividends, an enhanced dividend policy and significant contract wins announced by Galliford Try. |
| · | Breakthrough contract wins announced by Filtronic Plc with the European Space Agency and a leader global provider of low earth orbit satellites, in addition to prestigious grant funding with the Ministry of Defence’s Technology Exploitation Programme. |
| · | Large increase in Trifast investment as ‘springboard’ holding becomes ‘core’. Harwood advised funds have cumulatively increased the shareholding to 6.2%. Rockwood portfolio weighting was 8.2% of NAV at Period end. |
| · | Bonhill delisted after returning the capital from asset sales via a tender offer. |
| · | New ‘Springboard/opportunity’ holdings established at James Fisher & Sons, Filtronic and Restore. |
Richard Staveley, Fund Manager, Harwood Capital LLP said:
“During a challenging period for UK smaller company equities, Rockwood’s investee companies have been making a number of managerial, operational and strategic changes which we expect to catalyse significant future shareholder value creation. Rockwood’s focused and engaged strategy is differentiated and we are tremendously excited about the potential from the portfolio of deeply undervalued companies, most of which have material profit recovery potential. The current gloom prevailing in UK equities unsurprisingly provides outstanding conditions for medium-term investors. We have the patience, the capital, the expertise and the drive to exploit these generationally low valuations. We warmly welcome those that have joined the register during the period, and we remain fully aligned with all shareholders to continue delivering best in class returns.”
The latest Investor Presentation and Q3 Factsheet will be available shortly at www.rockwoodstrategic.co.uk.
| Rockwood Strategic plcChairman | Noel Lamb | 020 7264 4444 |
| Harwood Capital LLPInvestment Manager | Christopher Hart | 020 7640 3200 |
| Singer Capital Markets Advisory LLP | James MaxwellJames Fischer | 020 7496 3000 |