BRM – May 2019 monthly update

1
Monthly Update
May 2019
BRM NAV
$
0.68
SHARE PRICE
$
0.61
WARRANT PRICE
$
0.01
as at 30 April 2019
A word from the Manager
Market Overview
The ASX 200 returned +2.4% (in A$) in April, rallying into
month end as soft inflation data spurred speculation of an
earlier than expected interest rate cut by the RBA in May. The
performance was broad based with 8 of 11 sectors finishing
the month in the green, led by Consumer Staples (+7.4%),
Information Technology (+7.3%) and Consumer Discretionary
(+5.0%). After strong recent performance, Materials (-2.0%),
Real Estate (-1.9%) and Utilities (-0.5%) all lagged the index in
the month.
Portfolio News
Although there was no company specific news to speak of,
similar to a number of Australian, high growth companies,
both Nanosonics (+13.3% in A$) and Xero (+11.9%) rose
strongly in the month.
Early in April Credit Corp (+7.5% in A$) came to the market
to raise $110m in equity (subsequently increased to $135m).
With some competitors now facing funding pressures, Credit
Corp wants the capital to take advantage of the likelihood
that pricing improves in its core Australian and New Zealand
(A&NZ) debt buying market. For several years it has ceded
A&NZ market share believing that returns were inadequate
given prevailing prices. The company is also looking to
accelerate its growth in the far larger US debt buying
market where conditions remain favourable. Given Credit
Corp management’s sound track record over the years, we
participated in the equity raising.
Towards the end of April SEEK (+3.8%) announced that
it had invested in two global online education businesses,
FutureLearn and Coursera. Both FutureLearn and Coursera
are leading online education platforms and share similar
characteristics with SEEK’s other online education businesses
including in Australia, Latin America and through Zhaopin,
in China. These businesses stand to benefit from the trend
towards increased use of online education. In Coursera, SEEK
have an investment in the world’s largest online learning
platform and together with FutureLearn have 49m enrolled
learners accessing a range of studies, from short courses
through to full degrees offered on behalf of 150+ universities.
Brambles (+2.5%) provided a solid trading update for
the first nine months of its 2019 financial year. In constant
currency terms revenue from its continuing operations
(essentially the global CHEP pallet business) is up by
7%. This is made up of 5% volume growth and 2% price
realisation. For a relatively mature business Brambles’ on-
going mid-single digit volume growth is consistent with our
view that it still has a long growth runway ahead of it from
increasing business with existing customers and converting
new customers to its pooled rental pallet platform. The
company’s ability to raise prices to offset input-cost inflation
(particularly in the US) clearly demonstrates the strength of
its position in supply chains across the world.
CSL (+1.9%) hosted a tour of its Kankakee manufacturing
plant in the US in early April. CSL management spent a
lot of time talking to their concern about the tightness
in base plasma supply to satisfy the growing demand
for immunoglobulin products globally. CSL have
communicated their concern over the supply scarcity to
the market for some time now and in response continue
to roll out more collection and manufacturing facilities.
CSL plans to add 30-35 new plasma collection centres per
year (circa 15% growth in the installed base per annum)
while almost doubling their base plasma fractionation
capacity (the process of separating the blood plasma into
its different proteins for use in different therapies) from 16m
litres to 32m litres pa in the next 5 years. Responding to the
strong demand for CSL’s market leading therapy, Haegarda,
which is used to treat HAE (a severe swelling disorder),
management also highlighted the almost doubling of the
production capacity for Haegarda in late 2019. These are
all tangible signs of a company that continues to invest in
its operations in order to keep growing its revenue and
profitability in future years.
One of Wisetech’s (-3.2%) customers, Bollore Logistics
announced a strategic agreement to roll out CargoWise
One across its global network, including Africa, a key
market for Bollore Logistics. Bollore Logistics has been
using CargoWise One to handle its freight forwarding and
customs management operations in Australia and New
DISCOUNT
1
9.6
%
1
Share Price Discount to NAV (including warrant price on a pro-rated basis)

Sector Split
as at 30 April 2019
Key Details
as at 30 April 2019
FUND TYPE
Listed Investment Company
INVESTS IN
Growing Australian companies
LISTING DATE
26 October 2006
FINANCIAL YEAR END
30 June
TYPICAL PORTFOLIO SIZE
25-35 stocks
INVESTMENT CRITERIA
Long–term growth
PERFORMANCE
OBJECTIVE
Long–term growth of capital and
dividends
TAX STATUS
Portfolio Investment Entity (PIE)
MANAGER
Fisher Funds Management
Limited
MANAGEMENT
FEE RATE
1.25% of gross asset value
(reduced by 0.10% for every 1% of
underperformance relative to the
change in the NZ 90 Day Bank Bill
Index with a floor of 0.75%)
PERFORMANCE
BENCHMARK
Changes in the NZ 90 Day Bank
Bill Index + 7%
PERFORMANCE
FEE HURDLE
15% of returns in excess of
benchmark and high water mark
HIGH WATER MARK
$0.67
SHARES ON ISSUE
171m
MARKET CAPITALISATION
$104m
GEARING
None (maximum permitted 20%
of gross asset value)
11
%
INFORMATION
TECHNOLOGY
21
%
11
%

INDUSTRIALS
20
%
COMMUNICATION
SERVICES

FINANCIALS
21
%
HEALTH CARE
4
%

CASH
9
%
CONSUMER
DISCRETIONARY
Zealand for many years. This is a pleasing validation of
Wisetech’s goal to broaden its reach across the global
logistics industry.
After a strong performance in recent months, oOH!
Media (-3.2%) and Rio Tinto (-2.6%) gave up some
of the gains in April. Although there was no material
news related to either company in the month, oOH!
Media does face some near term uncertainty related to
advertising spend which may have been disrupted by
the upcoming federal election. We would expect this
headwind to be relatively short lived.
1
%

REAL ESTATE
Robbie Urquhart
Senior Portfolio Manager
Fisher Funds Management Limited
2
%

MATERIALS
Portfolio Changes
There were no substantial portfolio changes in April.
2

April’s Biggest Movers in Australian dollar terms
Typically the Barramundi portfolio will be invested 90% or more in equities.
NANOSONICS
+13
%
XERO
+12
%
TECHNOLOGY ONE
+10
%
ARB CORPORATION
+7
%
CREDIT CORP GROUP
+7
%
5 Largest Portfolio Positions as at 30 April 2019
CARSALES.COM
7
%
SEEK
7
%
CSL LIMITED
7
%
XERO LIMITED
5
%
COMMONWEALTH
BANK OF AUSTRALIA
5
%
The remaining portfolio is made up of another 20 stocks and cash.
Oct
2006
Oct
2007
Oct
2008
Oct
2009
Oct
2010
Oct
2011
Oct
2012
Oct
2013
Oct
2015
Oct
2016
Oct
2014
Share Price/Total Shareholder Return
$
1.00
$
1.20
$
0.8 0
$
0.60
$
0.40
Share PriceTotal Shareholder Return
$
1.60
$
0.20
$
0.00
$
1.40
Oct
2017
Oct
2018
Total Shareholder Return to 30 April 2019
1 Month3 Months1 Year3 Years
(annualised)
Since Inception
(annualised)
Company Performance
Total Shareholder Return+7.2%+5.6%+13.7%+8.3%+3.8%
Adjusted NAV Return+4.1%+9.6%+9.4%+8.1%+4.3%
Portfolio Performance
Gross Performance Return+4.1%+10.5%+13.8%+11.5%+7.6%
Benchmark Index^+2.8%+9.4%+10.1%+11.1%+3.3%
Performance to 30 April 2019
^Benchmark Index: S&P/ASX Small Ords Industrial Gross Index until 30 September 2015 & S&P/ASX 200 Index (hedged 70% to NZD) from 1 October 2015
Non–GAAP Financial Information
Barramundi uses non–GAAP measures, including adjusted net asset value, adjusted NAV return, gross performance return and total shareholder return. The rationale for using such non–GAAP measures is as follows:
»adjusted net asset value – the underlying value of the investment portfolio adjusted for capital allocation decisions,
»adjusted NAV return – the return to an investor after fees and tax,
»gross performance return – the Manager’s portfolio performance in terms of stock selection and currency hedging before fees and tax, and
»total shareholder return – the return to an investor who reinvests their dividends, and if in the money, exercises their warrants at warrant maturity date for additional shares.
All references to adjusted net asset value, adjusted NAV return, gross performance return and total shareholder return in this monthly update are to such non–GAAP measures. The calculations applied to non–GAAP
measures are described in the Barramundi Non–GAAP Financial Information Policy. A copy of the policy is available at http://barramundi.co.nz/about-barramundi/barramundi-policies/
3

Disclaimer: The information in this update has been prepared as at the date noted on the front page. The information has been prepared as a general summary of the matters covered only, and it is by
necessity brief. The information and opinions are based upon sources which are believed to be reliable, but Barramundi Limited and its officers and directors make no representation as to its accuracy
or completeness. The update is not intended to constitute professional or investment advice and should not be relied upon in making any investment decisions. Professional financial advice from
an authorised financial adviser should be taken before making an investment. To the extent that the update contains data relating to the historical performance of Barramundi Limited or its portfolio
companies, please note that fund performance can and will vary and that future results may have no correlation with results historically achieved.
Barramundi Limited
Private Bag 93502, Takapuna, Auckland 0740
Phone: +64 9 489 7074 | Fax: +64 9 489 7139
Email: enquire@barramundi.co.nz | www.barramundi.co.nz
4
Computershare Investor Services Limited
Private Bag 92119, Auckland 1142
Phone: +64 9 488 8777 | Fax: +64 9 488 8787
Email: enquiry@computershare.co.nz | www.computershare.com/nz
About Barramundi
Barramundi is an investment
company listed on the New
Zealand Stock Exchange. The
company gives shareholders
an opportunity to invest
in a diversified portfolio of
between 25 and 35 quality
growing Australian companies
through a single, professionally
managed investment. The aim of
Barramundi is to offer investors
competitive returns through
capital growth and dividends.
Capital Management Strategies
Regular Dividends
»Quarterly distribution policy introduced in
August 2009
»Under this policy, 2% of average NAV is targeted
to be paid to shareholders quarterly
»Dividends paid by Barramundi may include
dividends received, interest income, investment
gains and/or return of capital
»Shareholders who prefer to have increased
capital rather than a regular income stream have
the opportunity to participate in the company’s
dividend reinvestment plan (DRP)
»Shares issued to DRP participants are at a 3%
discount to market price
»Barramundi became a portfolio investment entity
on 1 October 2007. As a result, dividends paid to
New Zealand tax resident shareholders have not
been subject to further tax
Share Buyback Programme
»Barramundi has a buyback programme in place
allowing it (if it elects to do so) to acquire up to 8.4m of
its shares on market in the year to 31 October 2019
»Shares bought back by the company are held as
treasury stock
» Shares held as treasury stock are available to be
re–issued for the dividend reinvestment plan and to pay
performance fees
Warrants
» On 16 October 2018, a new issue of warrants (BRMWE)
was announced
» The warrants were issued 1 November 2018 at no cost
to eligible shareholders and in the ratio of one warrant
for every four Barramundi shares held
» Exercise Price = $0.64 per warrant, to be adjusted down
for dividends declared during the period up to the
Exercise Date
»Exercise Date = 25 October 2019
»The final Exercise Price will be announced and an
Exercise Form will be posted to warrant holders in
September 2019
Management
Barramundi’s portfolio is managed
by Fisher Funds Management
Limited. Robbie Urquhart
(Senior Portfolio Manager),
Terry Tolich (Senior Investment
Analyst) and Delano Gallagher
(Investment Analyst) have prime
responsibility for managing the
Barramundi portfolio. Together
they have significant combined
experience and are very capable
of researching and investing in the
quality Australian companies that
Barramundi targets. Fisher Funds
is based in Takapuna, Auckland.
Board
The Manager has authority
delegated to it from the
Board to invest according to
the Management Agreement
and other written policies.
The Board of Barramundi
comprises independent
directors Alistair Ryan (Chair),
Carol Campbell, Andy Coupe
and Carmel Fisher.