Kernow Up 4% In December, 16% For 2025 As Shorting UK’s Largest IPO Yields Profits

Kernow Asset Management’s commentary for the month ended December 31, 2025.

In December, the strategy returned 4.0%, bringing our 2025 gain to 16.4%.

Ghosts of Christmas Past

There we were on a Christmas Eve morning waiting for the news. Every year, we joke about which dodgy companies will push out news on the day before Christmas. A day when few are working or paying attention properly. This time it was WH Smith dropping its annual report at 13:22, an hour after the market closed. Proposing to wave through re-appointment of its auditor. The same one who’d oversaw the sales accounting scandal.

A Winter Sale Worth Catching

To be fair, two minutes before market close on Christmas Eve, one of our biggest positions, Secure Trust Bank, gave us a fright. The announcement? A major division sold for £459m.

At a premium to book value… wait… that’s not bad news. That’s excellent news. The whole company is trading at half its book value. Investors are effectively buying £1 for 50p. We scrambled to buy more but missed the bell.

It gets better. This working capital boost will put the company in a much better position to exploit its new lending strategy, earmarked to be officially announced at the Capital Markets Day in a couple of months. The cherry on top? The CEO has been buying shares in the open market. Not options. No freebies. Real money. His own. That’s as strong a signal as it gets.