Results analysis from Kepler Trust Intelligence

Rockwood Strategic (RKW)

19/11/2025

Results analysis from Kepler Trust Intelligence

Rockwood Strategic (RKW) has released its interim results for the six-months ending 30/09/2025. Over the period, RKW's NAV total returns were 12.5%, with a share price total return of 11.5%. Whilst the trust has no formal benchmark, comparator indices returned 12.1% and 14.8%.

Over the long term, RKW is significantly ahead of these comparators, having returned 179.9% in the five years to the period end, versus 91.3% and -11.7% for the indices.

Vanquis Banking Group was the top performer in the half-year, with shares more than doubling. Capita Plc was also a positive, with Capital Limited contributing to performance due to its gold and copper mining exposure. RKW's NAV was impacted by a write-off in previous holding Argentex.

Manager Richard Staveley made three new investments in the period. One has risen notably since initial purchase, with another the subject of a takeover offer during the period. There was one disposal in the period after the company fulfilled its investment thesis and generated a high IRR.

The trust's premium rating has allowed for share issuance, contributing to NAV growing 24%.This issuance contributed to an increase in the cash position although this has since been mostly allocated to a number of portfolio holdings.

Chairman Noel Lamb noted the strategy's success, stating: "We continue to grow, due to the attractions of our differentiated strategy, focused team and best in class returns."

Kepler View

Rockwood Strategic (RKW) has continued to defy the gloom surrounding the UK to deliver another good set of results. Following on from the blockbuster return in the previous financial year, manager Richard Staveley has produced another period of double-digit performance. To us, this demonstrates the upside potential still on offer at the lower end of the market cap spectrum, despite weak sentiment. RKW's returns are still considerably ahead of its own ambitious target, and the trust continues to have one of the best five-year track records of any investment trust.

Performance in the period has come from a broad spread of holdings. The top five contributors are from a variety of industries, with the top three performers having returned over 100%, 70% and 68%, demonstrating the asymmetric upside reward potential. This is especially pertinent when considering the detractors, most notably the write-off in Argentex. Whilst this was unhelpful, pragmatic position sizing has helped mitigate its impact.

Richard added three new holdings to the portfolio in the period, and two of these have already contributed notably to performance. One has been the subject of some takeover activity from private equity, demonstrating value and how M&A can still be an important factor for returns going forward. That said, the one realisation in the period is particularly notable, in our view. The firm has been held since 2022, met its recovery thesis and been sold at a very high return, with an IRR of 48.2%. This is an excellent example of the process in action and shows how holdings such as this can provide the foundations for the excellent, long-term results the strategy has achieved.

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