KFL – June 2019 monthly update

1
Monthly Update
June 2019
A word from the Manager
Market Environment
New Zealand equities as measured by the S&P/NZX50G index
were up +1.0% in May, sharply outperforming global equity
markets that were generally down several percent with the
US and China, in particular, suffering from concerns about the
ongoing trade tensions. Kingfish delivered an adjusted NAV
return of +0.6% which slightly lagged the market.
The Portfolio
Infratil (-0.4% for the month) announced the conditional
acquisition of Vodafone New Zealand alongside Brookfield
Infrastructure Partners, with Infratil raising $400 million of
new equity to fund its 49.9% stake. The deal has similarities
to Infratil’s extremely successful transformation of Shell’s
New Zealand assets into Z Energy where Infratil created
significant shareholder value. We continue to view Infratil as
an attractive investment opportunity and participated in the
equity offer.
Mainfreight (+9.7%) delivered a very strong fiscal 2019
result, ahead of our expectations. Most of the uplift in profits
came from its offshore businesses and the performance
in the United States (US) was particularly notable. The
humble management team commented they “will bask for
a moment, savouring this result” which was somewhat a
watershed moment for their global aspirations. We believe
the recent confidence and upward inflection in the US and
Europe will help boost Mainfreight’s growth in those markets.
Freightways (-4.8%) provided an outlook update at a
broker conference, calling out a range of idiosyncratic
factors affecting its business. The update was mixed, with
several of the factors having a negative impact, including
rate reductions for its largest courier customer following an
abnormally long period without a review. There was also a
negative impact of zonal pricing from NZ Post and lower
paper prices for its document destruction operations.
On the positive side, its competitors are implementing
large market-wide price increases to re-price business-
to-consumer volumes that are at uneconomic levels.
Freightways is also seeing traction of its strategy to
implement “Pricing for Effort” with consumer-skewed
accounts. These pricing initiatives should drive improved
performance in the coming 2020 fiscal year.
Portfolio Changes and Strategy
We added to our major positions in Infratil, Mainfreight
and a2 Milk during the month. The simplification of Infratil’s
portfolio is now largely complete with a focus on data
proliferation and connectivity (data centre business CDC
continues to outperform expectations), air travel, renewable
energy and retirement living. Vodafone is also exposed
to favourable data and connectivity trends. Mainfreight is
executing well and the potential for creation of shareholder
value from growth in the large US and European markets is
significant. a2 Milk continues to deliver on its strategy, with
the new Smart Nutrition product launch in the 4-12 year old
segment supportive of its strategy to extend its product
range to cater to its older, loyal infant formula customers.
We reduced our position in Freightways following recent
share price gains.
1
Share Price Discount to NAV (including warrant price on a pro-rated basis)
KFL NAV
$
1.60
SHARE PRICE
$
1.47
DISCOUNT
1
6.5
%
as at 31 May 2019
WARRANT PRICE
$
0.12
Sam Dickie
Senior Portfolio Manager
Fisher Funds Management Limited

Key Details
as at 31 May 2019
FUND TYPE
Listed Investment Company
INVESTS IN
Growing New Zealand companies
LISTING DATE
31 March 2004
FINANCIAL YEAR END
31 March
TYPICAL PORTFOLIO SIZE
15-25 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
FEE HURDLE
Changes in the NZ 90 Day Bank
Bill Index + 7%
PERFORMANCE FEE
10% of returns in excess of
benchmark and high water mark
HIGH WATER MARK
$1.56
PERFORMANCE FEE CAP
1.25%
SHARES ON ISSUE
199m
MARKET CAPITALISATION
$293m
GEARING
None (maximum permitted 20%
of gross asset value)
Sector Split
as at 31 May 2019
2
%
26
%
HEALTH CARE
18
%

UTILITIES

MATERIALS
28
%
INDUSTRIALS
12
%
CONSUMER
STAPLES
1
%
CONSUMER
DISCRETIONARY
8
%
INFORMATION
TECHNOLOGY
2
Performance
to 31 May 2019
1 Month3 Months1 Year3 Years
(annualised)
5 Years
(annualised)
Company Performance
Total Shareholder Return+2.0%+9.9%+18.5%+11.8%+12.0%
Adjusted NAV Return+0.6%+7.2%+16.7%+12.8%+12.9%
Portfolio Performance
Gross Performance Return+0.7%+8.9%+20.6%+15.6%+15.7%
S&P/NZX50G Index+1.0%+8.5%+16.9%+12.9%+14.3%
Non-GAAP Financial Information
Kingfish 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 after fees and tax,
»adjusted NAV return – the net return to an investor after fees and tax,
»gross performance return – the Manager’s portfolio performance in terms of stock selection, 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 Kingfish Non-GAAP Financial Information Policy. A copy of the policy is available at http://kingfish.co.nz/about-kingfish/kingfish-policies/
The Kingfish portfolio also holds cash

3
Total Shareholder Return
to 31 May 2019
Mar
2004
Mar
2005
Mar
2006
Mar
2007
Mar
2008
Mar
2009
Mar
2010
Mar
2011
Mar
2012
Mar
2014
Mar
2015
Mar
2013
Mar
2016
Share Price/Total Shareholder Return
$
2.50
$
3.00
$
2.0 0
$
1.50
$
1.00
Share PriceTotal Shareholder Return
$
4.50
$
5.00
$
0.50
$
0.00
Mar
2017
$
3.50
Mar
2018
$
4.00
Mar
2019
May’s Biggest Movers
Typically the Kingfish portfolio will be invested 90% or more in equities.
The remaining portfolio is made up of another 10 stocks and cash.
5 Largest Portfolio Positions
as at 31 May 2019
VISTA GROUP
+14
%
AUCKLAND
INTERNATIONAL
AIRPORT
+10
%
MAINFRIEGHT
+10
%
RESTAURANT BRANDS
+5
%
A2 MILK COMPANY
-6
%
THE A2 MILK
COMPANY
15
%
FISHER & PAYKEL
HEALTHCARE
13
%
INFRATIL
11
%
MAINFREIGHT
8
%
FREIGHTWAYS
8
%

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 Kingfish 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 Kingfish 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.
Kingfish Limited
Private Bag 93502, Takapuna, Auckland 0740
Phone: +64 9 489 7094 | Fax: +64 9 489 7139
Email: enquire@kingfish.co.nz | www.kingfish.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 Kingfish
Kingfish 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 15 and 25 quality
growing New Zealand companies
through a single, professionally
managed investment. The aim
of Kingfish is to offer investors
competitive returns through
capital growth and dividends.
Capital Management Strategies
Regular Dividends
»Quarterly distribution policy introduced in
June 2009
»Under this policy, 2% of average NAV is targeted
to be paid to shareholders quarterly
»Dividends paid by Kingfish 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
»Kingfish 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
»Kingfish has a buyback programme in place allowing
it (if it elects to do so) to acquire up to 9.7m 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
Warrants
»On 2 July 2018, a new issue of warrants (KFLWE) was
announced
»The warrants were issued at no cost to eligible
shareholders and in the ratio of one warrant for
every four Kingfish shares held
»Exercise Price = $1.25
»Exercise Date = 12 July 2019
»The final Exercise Price will be announced and an
Exercise Form will be posted to warrant holders in
June 2019
Management
Kingfish’s portfolio is managed
by Fisher Funds Management
Limited. Sam Dickie (Senior
Portfolio Manager), Zoie Regan
(Senior Investment Analyst) and
Matt Peek (Investment Analyst)
have prime responsibility for
managing the Kingfish portfolio.
Together they have over 40 years
combined experience and are
very capable of researching and
investing in the quality New
Zealand companies that Kingfish
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 Kingfish
comprises independent
directors Alistair Ryan (Chair),
Carol Campbell, and Andy
Coupe; and non-independent
director Carmel Fisher.