Rockwood Strategic : Factsheet Q3 2022

Fund Factsheet

30 September 2022

Investment Objective & Strategy

The Fund seeks investments capable of delivering 15% IRRs over a 3-5 year time horizon in publicly listed UK Small companies. The strategy targets up to 10 'core' positions which represent the majority of NAV and a further 15-25 more liquid smaller investments. We have a 'value' investor mindset, are cash-flow focused, and seek proven businesses and opportunities for strategic, operational or management change to unlock shareholder value. The team adopts an 'engaged' approach, backed up with material shareholdings in target investments.

Performance %					Key Facts as at 30 September 2022
				Manager	Richard Staveley
	YTD	3M	12M	36M
	Year end	March
Total Shareholder Return	0.7	1.8	0.9	65.0
NAV £m	36.8
NAV Return	-12.0	-4.4	-8.4	44.3
FTSE Small (ex ITs)	-25.7	-9.9	-26.6	6.0	Share price (Mid)	1415
Financial Year's Performance %				NAV per share	1446.7
			Discount to NAV	2.2%
	2022	2021	2020	2019
	No. of holdings	15
Total Shareholder Return	22.2	59.3	-5.3	20.4
Net cash	£2.4m
NAV Return	27.5	44.3	-14.3	8.0
	£120,000 p.a <£60m NAV, 1%
FTSE All-Share Total Return	13.0	26.7	-18.5	6.4	AMC
thereafter
Investment Manager's Commentary				Performance fee	10% over 6% p.a. hurdle, high
			watermark
The third quarter of 2022 was highly eventful. All at Harwood and Rockwood,
Bloomberg Ticker	RKW.LN
alongside the country, mourned the death of Queen Elizabeth II. A new Prime
ISIN	GB00BYRH4982
Minister was appointed. The Chairman of the US Federal Reserve stated that
Sedol	BYRH498
"pain" was inevitable due to its rapidly tightening monetary policy stance to
moderate inflation and the Dollar continued to strengthen. U.K. Interest rates

were raised to 2.25%, 10 year Gilt yields exceeded 4%, both the highest since 2008. The oil price, freight rates, investor and consumer sentiment fell. UK unemployment is 3.6%, the lowest since 1974. Inflation hit 10.1%, the highest since 1982. The new government quickly targeted huge fiscal support at the 'cost of energy' crisis and then announced a radical budget which led to accelerating sterling, bond and equity market weakness. We are entering recession.

It has become increasingly difficult for our investments to continue to remain largely unscathed by the turmoil in markets. However, a number are bucking the market trend. Crestchic is producing stunning operating results, with significant upgrades to market forecasts, due to outstanding trading, as the benefits of the transformation programme bear fruit. Centaur Media, Van Elle, Argentex, M&C Saatchi and Galliford Try all announced positive profit momentum. Pressure Technologies has been disappointing as a combination of operational issues, external factors and poor forecasting has resulted in financial stress. It is now 2.8% of NAV. We are heavily engaged.

"It was the best of times, it was the worst of times". Today's decisions will seed future returns. We have established two new investments in this 'buyers' market: Finsbury Foods is a materially undervalued company. It has a proven and experienced management team, is off-setting cost pressures incredibly well and has very low leverage in relation to its prodigious cash generation. We anticipate strategic developments. RM Plc is the UK market leader in education supplies and services. It has a very long history of cash generation yet has botched an operational re-organisation and IT system implementation. The distressed outcome provides a material opportunity for exactly what Rockwood targets: strategic, operational and management change in undervalued shares.

We anticipate significant upside from the portfolio over the medium-term as stock specific catalysts lead to profit improvement, value realisation or a market re-rating. To paraphrase Sir John Templeton we are minded to "be greedy when others are fearful".

Top Ten Holdings as % of NAV

Company	Sector	%
Crestchic	Industrials	28.7%
Flowtech Fluidpower	Distribution	10.2%
Centaur Media	Media	10.1%
M&C Saatchi	Media	7.8%
Van Elle	Services	5.9%
Smoove	Technology	4.6%
City Pub Co	Consumer	4.3%
RM	Education services	3.7%
Bonhill	Media	3.5%
Galliford Try	Construction	3.3%
Cash & equivalents	Cash & equivalents	6.6%

Holding Information

• Nick Mills is a Non-Executive Director at Crestchic
• Richard Staveley is a Non-Executive Director at Bonhill and Centaur Media
• IAG member Jamie Brooke is a Non-Executive Director at Flowtech Fluidpower.
• Crestchic was formerly called Northbridge Industrial Services
• Smoove was formerly called ULS Technology

Key Risk Considerations

Past performance is not a reliable indicator of current or future performance, and investors may not get back the original amount invested. Investment in RKW may not be appropriate for investors who plan to withdraw their money within 5 years. Shares of RKW may trade at a discount or a premium to Net Asset Value ("NAV") for variety of reasons. On a sale you could realise less than the NAV and less than you initially invested. RKW's portfolio is focused towards small companies; these may involve a higher degree of risk than larger sized companies.

Source: *Harwood Capital, Bloomberg. All data as at 30 September 2022.

Fund Management Team

Richard Staveley was formerly lead manager for GHS plc, Majedie UK Small Companies, R&M UK Small Companies, Société Générale UK Small Companies, after he had qualified as an ACA at PWC. He is a CFA charterholder and has >20 years small company fund management experience.

Nick Mills joined Harwood Capital in '19 to work on the Oryx International Growth and NASCIT strategies. He had previously spent five years at Gabelli Asset Management in New York as an analyst. He is also a NED at Circassia Group plc and Hargreaves Services plc .

Other Features

• 'Skin in the Game' - Christopher Mills and Richard Staveley have purchased 29.9% of the issued share capital
• Premium listing on London Stock Exchange
• Investment universe of nearly 1000 UK small companies
• Focused portfolio, majority of capital in <10 holdings
• Ability to hold up to 15% in private companies or instruments

Investment Advisory Group (200 years combined experience)

Christopher Mills; Founder of Harwood Capital, JO Hambro Capital Management and Harwood Wealth. CEO North Atlantic Small Companies IT, Executive Director of Oryx International Growth, >45 years investment experience

Adam Parker; Co-Founder of Majedie Asset Management, formerly at Mercury Asset Management, >35 years UK small companies fund management experience (Oxford, Chemistry)

Jamie Brooke; Formerly Hanover, Lombard Odier, Henderson Global, Gartmore, 3i and Deloitte (ACA), 29 years UK small companies investment experience (Oxford, Maths). NED at Flowtech Fluidpower and Chapel Down plc.

Rupert Dyson; Founder of Edale Capital LLP, formerly Sloane Robinson and Invesco, 28 years European equities investing experience (Bristol, History)

Yuri Khodjamirian; Formerly an analyst and fund manager at Majedie Asset Management, 13 years UK and Global equities experience (Cambridge & LSE, Economics and Bioscience Enterprise). Private company adviser and founder of snippetfinance.com

David Potter; >50 years of financial services and transaction experience incl. CSFB, Samuel Montagu, Midland Bank and CEO of Guinness Mahon, 25 years of NED/Chair roles (Oxford, PPE)

Company History

Initially listed as NewMediaSpark in 1999 into the heights of the TMT boom, the company's tech-biased investment portfolio was gradually exited in the years that followed.

In 2015 it adopted a new investment strategy focused primarily on UK publicly listed small companies and was renamed Gresham House Strategic plc.

In October 2021 Harwood Capital was appointed as manager

In April 2022 the company was re-named Rockwood Strategic plc and re-started actively investing under the returning lead fund manager, Richard Staveley.

In September 2022 the company migrated from the AIM to the premium list of the London Stock Exchange

How to Invest

Investors can access the strategy on the London Stock Exchange (ticker: RKW).

Prospective investors can buy shares through their wealth manager, financial adviser or stockbroker.

Contact Information

www.rockwoodstrategic.co.uk

[e-mail]

[phone]

Important Information

An investment should be considered only as part of a balanced portfolio. To ensure you understand whether this product is suitable against your individual needs and risk tolerance, please read the information provided on the website and the key information document, available at rockwoodstrategic.co.uk, which provides more information about the risk profile of the investment. If you are in any doubt as to the suitability of RKW for your investment needs, we recommend you seek independent professional advice prior to investing.

This factsheet is for information purposes only and does not constitute an offer, solicitation or investment recommendation for the purchase or sale of any securities or financial instruments mentioned and should not be relied on by any person for making an investment decision. Nothing in this factsheet should be construed as investment advice and is therefore not a recommendation to buy or sell shares in RKW.