Results analysis from Kepler Trust Intelligence
Summary by AI BETAClose X
Rockwood Strategic (RKW)
18/06/2026
Results analysis from Kepler Trust Intelligence
Rockwood Strategic (RKW) released annual results for the year to 31/03/2026, reporting NAV and share price total returns of 7.1% and 2.4%, respectively. Whilst the trust has no formal benchmark, comparator indices, the FTSE Small Cap (ex-ITs) and the FTSE AIM All-Share Index, returned 8.9% and 5.1% over the same period.
Capital Limited was a strong driver over this period, up almost 100% on a recovering Laboratories division and growing exposure to mining capex. Vanquis Banking wasn't far behind, rising 93%, benefitting from falling costs which helped return it to profitability.There were some challenges. The portfolio took a write down on Argentex, the FX firm that collapsed after high-risk client trades were caught out by sharp dollar moves. Further, in March 2026, the market reaction to US military action against Iran pushed up energy prices and inflation expectations, denting hopes for further rate cuts, both weighing on equity markets and RKW's NAV, in the last month of its reporting period.
During the reported period, RKW's shares maintained an average 1.2% premium to NAV. However, President Trump's actions in the Persian Gulf unnerved investors pushing the trust to a small 2.7% discount at the reporting period-end, albeit briefly, as RKW moved back to a premium rating shortly after. At the time of writing, it trades at a premium of 2.7%.
Kepler View
Rockwood Strategic (RKW) has delivered exceptional long-term returns for investors, with a NAV total return of almost 100% over the past five-years. We think this record is a clear demonstration of Richard Staveley's approach in action, hunting from the bottom-up for idiosyncratic, overlooked and undervalued companies with genuine potential to grow their intrinsic value meaningfully. The key lies not only in identifying catalysts capable of unlocking that value, but for many of the trust's largest holdings, the influence Richard and team can assert to affect change, shaping board and management decisions directly. A great example of the positive impact this influence can have is via the investment in Galliford Try. Over time the position re-rated strongly, supported by Richard and the team's regularly engagement around capital allocation, prompting them to sell the position in its 2026 financial year, realising a 48% IRR and 2.4× money-multiple.
However, set against this record, the latest full year results running through to March 2026 may look somewhat out of step, with RKW delivering a NAV total return of 7.1%. On closer inspection, however, we would argue that this is not an entirely accurate reflection of the portfolio's progress over the year. Over its financial year, to February-end, the trust had delivered a NAV total return of 19.4%, but following the conflict in the Middle East, both wider equity markets and the portfolio's valuation were hit hard. The weakness in March, the last month of its annual reporting period, was a big driver in RKW's drop to a high single digit return. Since the period end to 16/06/2026, performance has rebounded sharply, with a NAV total return of 18.8%.
Looking ahead, we believe the broader backdrop for UK small and micro caps remains constructive and developments in artificial intelligence, could also be a net positive for many of the portfolio's holdings, including its current largest position, RM. Richard is alert to the risks too, including the weaponisation of AI for cybercrime, but expects most portfolio companies to benefit over time, with several already seeing improved operational productivity. On a policy level, we think the reduction in the cash ISA allowance from April 2027 has some merit, nudging savers towards investing in the market, a tacit acknowledgement from the government that the UK market remains under-owned by its own population. That said, we share Richard and team's frustration at the scale of opportunity still being missed. With the UK market having now outperformed the S&P 500 for a second consecutive year, and UK equities remaining at comparatively attractive valuations, broader policy support continues to lag that opportunity. For investors willing to look past short-term noise, we think the Richard's approach holds potential to unlock meaningful, differentiated value in the UK market, and it is precisely this disconnect between fundamentals and flows where managers like Richard continue to demonstrate their stock-picking edge.
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