Rockwood Strategic PLC Trading Update (5832O)

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RNS Number : 5832O

Rockwood Strategic PLC

04 October 2023

4 October 2023

Rockwood Strategic plc

("RKW" or "the Company")

Trading Update

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 29(th) 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 29(th) 
            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 GBP3.5m 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 Fluidpower 
            o Simon Goodwin and Christopher Humphrey respectively appointed 
            CFO and NED of RM Plc 
            o Iain Percival and Serena Lang respectively appointed CEO 
            and Chair of Trifast 
            o Zyllah Byng-Thorne appointed Executive Chair of M&C Saatchi 
            o Charles Skinner appointed CEO of Restore 
            o 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 plc 
  Chairman                            Noel Lamb         020 7264 4444 
 
   Harwood Capital LLP                Christopher 
   Investment Manager                 Hart              020 7640 3200 
 Singer Capital Markets Advisory    James Maxwell 
  LLP                                James Fischer     020 7496 3000

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END

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October 04, 2023 02:00 ET (06:00 GMT)

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