Rockwood Strategic Plc
(“RKW or the “Company”)
Interim results for the six months to 30 September 2023
Rockwood Strategic Plc (LSE: RKW) is pleased to announce its unaudited results for the six months ended 30 September 2023 (the “Period”).
Highlights for the period:
§ 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%1.
§ NAV Total Return performance in the year to 30th 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%1.
§ 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%1.
§ No. 1 ranked fund over the last 1, 3 and 5 years by Net Asset Value Total Return in the AIC UK Small Companies sector. Ranked No.2 over 1 year and No.1 over 3 and 5 years by Total Shareholder Return (‘TSR’).
§ New shares issued via our block listing programme at a small premium to Net Asset Value, growing the shareholder base by 5.7%.
§ Cash of £3.5m at the end of the Period (representing 7% of NAV).
§ Four new investments were made across a range of industry sectors and our investment in Trifast Plc was increased with the holding re-categorised as ‘Core’. Post period end Nick Mills from the Rockwood Investment Team was appointed as a Non-Executive Director of Trifast Plc.
§ Takeover approach for Finsbury Food Plc generating an unrealised IRR of 38.5% at period end.
§ Post period end takeover offers were received for Smoove Plc (69.3% premium to previous day’s close before commencement offer period), Onthemarket Plc (93.7% premium to three month volume weighted average price) and The City Pub Group Plc (65% premium to the three month volume weighted average price).
Noel Lamb, Chairman of Rockwood Strategic Plc, commented:
“The first half of our financial year has been a challenging one for UK small company stock market investors, with sustained outflows from the asset class amidst negative sentiment as interest rates continued to rise against a subdued economic backdrop. For those with sensible time horizons these are typically the conditions for positive future medium-term returns, not least due to the heavily depressed valuations of small company shares relative to history. Private Equity and Trade Buyers are clearly recognising the opportunities created by this environment with the drumbeat of takeovers within Rockwood’s portfolio continuing throughout 2023. We are delighted that during the period the long-standing share price discount to Net Asset Value was closed and we were able to grow our shareholder base.”
Richard Staveley, Fund Manager, Harwood Capital, commented:
“Illegitimi non carborundum” is our mentality currently. There has been a wealth of managerial and Board changes at Rockwood investee companies during the period. We are excited by the quality of these appointments and their credentials for creating operational and strategic change which should in time lead to considerable growth in shareholder value. We are receiving takeover approaches left, right and centre and expect more to be forthcoming if the stock market does not recognise the deeply undervalued future cashflow potential of our portfolio. The redeployment of takeover receipts fills us with great excitement given our pipeline of new opportunities and these ‘buyer’s’ market conditions. When the market environment eventually changes we expect the re-rating of our holdings to be material as investors belatedly react to the catalysts that are now in place across the portfolio for improved profitability and value creation. This in turn should lead to a re-acceleration of the compounding of Rockwood shareholders’ wealth via net asset value growth.”
The full version of the RKW interim report will be available on its website shortly at www.rockwoodstrategic.co.uk
For further information, please contact:
Rockwood Strategic Plc
|Harwood Capital LLPInvestment Manager
|020 7640 3200
|Singer Capital Markets Advisory LLPBroker
|James MaxwellAlex BondJames Fischer
|020 7496 3000