31 July 2024

THIS ANNOUNCEMENT AND THE INFORMATION CONTAINED IN IT ARE NOT FOR RELEASE, PUBLICATION, TRANSMISSION, FORWARDING OR DISTRIBUTION, DIRECTLY OR INDIRECTLY, IN WHOLE OR IN PART, IN OR INTO OR FROM THE UNITED STATES OR ANY JURISDICTION WHERE TO DO SO MIGHT CONSTITUTE A VIOLATION OF LOCAL APPLICABLE SECURITIES LAWS OR REGULATIONS.

THIS ANNOUNCEMENT IS FOR INFORMATION PURPOSES ONLY AND DOES NOT ITSELF CONSTITUTE AN OFFER FOR SALE OR SUBSCRIPTION OF ANY SECURITIES IN THE COMPANY. THIS ANNOUNCEMENT HAS BEEN ISSUED BY AND IS THE SOLE RESPONSIBILITY OF THE COMPANY.

Rockwood Strategic plc
("RKW" or the "Company")

Trading Update

Publication of Prospectus

Trading Update

The Company is the No 1. performing fund over 1, 3 and 5 years across all UK Investment Company sectors, whether large, income, mid or small, as per The Association of Investment Companies. Cash has been fully deployed, including into the recent new investments Capita Plc and National World Plc. Excellent business updates have been issued by Filtronic Plc and Galliford Try Plc, whilst important business disposals have been completed at both Funding Circle Plc and James Fisher & Sons Plc.

Noel Lamb, Chairman, commented:

"In the last two years Rockwood's NAV has more than doubled and performance has been best in class. Investor demand for this differentiated strategy continues and thus we hope to continue to scale, aided by this Prospectus and deliver for our shareholders. The manager clearly sees lots of opportunity to meet our target returns and has an exciting pipeline of potential investments."

Publication of Prospectus

In accordance with the requirements of the Prospectus Regulation, the Company is prohibited from issuing more than 20 per cent. of its issued share capital during any preceding twelve-month period without the publication of a prospectus. The Company has reached this limit through its most recent tap issuance and is therefore today publishing a prospectus (the "Prospectus") in order to provide the Company the capacity to continue issuing Ordinary Shares under the Prospectus Regulation. 

The maximum number of Ordinary Shares that may be issued under the Prospectus is 12,877,954 Ordinary Shares, representing 40 per cent. of the Company's issued share capital at the latest practicable date prior to its publication.

The Directors are also seeking authority, at the Annual General Meeting held today, to issue up to 6,438,976 Ordinary Shares (being an amount equal to 20 per cent. of the total issued share capital of the Company as at the date of the notice) on a non-pre-emptive basis.

The Prospectus will therefore also allow the Company to issue a further 20 per cent. of its current issued share capital (for up to a further 6,438,978 Ordinary Shares) via tap issuances subject to the Company receiving the authority to do so during the life of the Prospectus from its shareholders at a subsequent general meeting. 

A copy of the Prospectus will shortly be available on the Company's website at www.rockwoodstrategic.co.uk/key-docs/ and has been submitted to the National Storage Mechanism of the FCA at https://data.fca.org.uk/#/nsm/nationalstoragemechanism  

Block Listing Application Update

Further to the announcement on 30 July 2024 stating that the Company had made an application to the Financial Conduct Authority and London Stock Exchange for the block listing of 5,614,210 million Ordinary Shares, the Company confirms that it now expects the block listing will become effective at 8.00 a.m. on 5 August 2024 at which point the Company will have capacity to issue a total of 6,438,976 Ordinary Shares under its block listing facility.

Amendment to Investment Management Agreement

The Company also announces that the Board has agreed to a minor amendment to the Investment Management Agreement between the Company and its Investment Manager, Harwood Capital LLP, (the "Agreement"), to clarify the intention regarding the calculation of the cap on the performance fee payable to the Investment Manager as the fund grows in size. The amendment is effective from today.  

The Agreement currently states that if at the end of the financial period for which the Company prepares accounts the Company's net asset value ("NAV") exceeds £100 million, the performance fee, when aggregated with the annual investment management fee paid during the period to which the performance fee relates, will not exceed 3.0 per cent. of the Company's NAV. The Agreement has now been corrected to state that the £100 million NAV threshold be calculated by reference to the average NAV over the performance fee period (calculated as the average of each month end NAV) as was stated in the 2022 Prospectus, and Annual Reports for the financial years ended 2023 & 2024. A full summary of the Agreement, as amended, is included in the Prospectus.

The Investment Manager is defined as a related party of the Company under the UK Listing Rules (UKLRs). The amendment to the Agreement constitutes a 'relevant related party transaction' (as defined in the UKLRs) to which the requirements of UKLR 11.5.4 apply.  Under UKLR 11.5.4, there is no requirement for shareholders to vote on the amendment to the Agreement. The Board, having been so advised by Singer Capital Markets Advisory LLP (acting in its capacity as the Company's sponsor), considers the amendment to the Agreement to be fair and reasonable as far as the Company's shareholders are concerned.  In providing advice to the Directors, Singer Capital Markets Advisory LLP has taken into account the Directors' commercial assessments.

Capitalised terms used but not defined in this announcement shall have the meanings given to them in the Prospectus.

LEI: 213800K6BRTXR7RNG709 

For further information, please contact:

IMPORTANT NOTICE

Neither this announcement, nor any copy of it, may be taken or transmitted, published or distributed, directly or indirectly, in or into the United States or any other jurisdiction where to do so would constitute a violation of the relevant securities laws of such jurisdiction. This announcement is for information purposes only and does not constitute an offer to sell or issue, or the solicitation of an offer to buy, acquire or subscribe for any shares in the Company in the United States or any other state or jurisdiction in which such offer or solicitation is not authorised or to any person to whom it is unlawful to make such offer or solicitation. Any failure to comply with these restrictions may constitute a violation of securities laws of such jurisdictions.

The Shares have not been, and will not be, registered under the US Securities Act of 1933, as amended (the "US Securities Act"), or under any securities laws of any state or other jurisdiction of the United States and may not be offered, sold, resold, transferred or delivered, directly or indirectly, in or into the United States except pursuant to an applicable exemption from, or in a transaction not subject to, the registration requirements of the US Securities Act and in compliance with the securities laws of any state or other jurisdiction of the United States. There will be no public offering of Shares in the United States.

This announcement has been issued by, and is the sole responsibility of, the Company. No undertaking, representation, warranty or other assurance, express or implied, is made or given by or on behalf of the Company, the Investment Manager or Singer Capital Markets Advisory LLP ("Singer Capital Markets") or any of their respective directors, officers, partners, employees, agents or advisers or any other person as to the accuracy or completeness of the information or opinions contained in this announcement and no responsibility or liability is accepted by any of them for any such information or opinions or for any errors, omissions or misstatements, negligence or otherwise in this announcement.

Singer Capital Markets, which is authorised in the United Kingdom by the Financial Conduct Authority ("FCA"), is acting as sponsor to the Company in connection with the publication of the Prospectus. Singer Capital Markets is not acting for, and will not be responsible to, any person other than the Company for providing the protections afforded to its customers or for advising any other person on the contents of this announcement or on any transaction or arrangement referred to in this announcement. No representation or warranty, express or implied, is made by Singer Capital Markets as to, and no liability is accepted by Singer Capital Markets in respect of, any of the contents of this announcement.