Rockwood Strategic (RKW), the £139m UK smaller companies investment trust that won a QuotedData Investors’ Choice award last month, narrowly beat one of its benchmarks in the half year to 30 September.
An underlying net asset value total return of 12.5% compared to the 12.1% rise in the FTSE Small Cap (ex-ITs) index although it was behind the FTSE AIM All-Share index which gained 14.8%. The total shareholder return was 11.5%.
Over three years, however, shareholders have enjoyed a 99.7% total return on the back of a 93.9% return on net assets that beats the FTSE Small Cap’s 31.2% and FTSE AIM’s 2.9% decline.
Trading at a small premium to NAV, the company was able to issue 24% of new shares in the six-month period. This helped Harwood Capital fund manager Richard Staveley made three new investments: Treatt, an ingredients manufacturer, subsequently received a takeover offer from a private equity backed trade buyer that was blocked by a trade rival which took a strategic stake; Tribal Group, a provider of education software & services, rose 53% after the trust’s investment; and a third holding still being built. A modest ‘bridge’ financing was backed at aerospace company Pennant International. Galliford Try was sold after the house builder generated a 48.2% return over a three-year turnaround.
The company also joined the FTSE All-Share and FTSE Small Companies indices.
Our view
QuotedData’s James Carthew said: “Investors’ Choice award winner Rockwood Strategic continues to power ahead. The fund manager is calling for ‘meaningful and immediate government intervention’ to help rekindle investor interest in the UK stock market. This echoes my own views. I struggle to see why investors should be incentivised with sizeable tax breaks to hold cash, which serves little benefit to the UK economy and doesn’t do much for achieving long-term savings goals. I would rather see ISAs restricted to UK listed equities, which would still give investors exposure to global growth.”
