Another Strong Marlin Result

Marlin Global Limited results announcement


Results for announcement to the market
Name of issuer Marlin Global Limited
Reporting Period 12 months to 30 June 2019
Previous Reporting Period 12 months to 30 June 2018
Currency NZ$

Amount (000s) Percentage change
Revenue from continuing
operations
$11,791 -59%
Total Revenue $11,791 -59%
Net profit/(loss) from
continuing operations
$8,370 -65%
Total net profit/(loss) $8,370 -65%
Interim/Final Dividend
Amount per Quoted Equity
Security
$NZ 1.93 cents per share
Imputed amount per Quoted
Equity Security
$NZ 0.002222
Record Date 12 September 2019
Dividend Payment Date 26 September 2019
Current period Prior comparable period
Net tangible assets per
Quoted Equity Security
$0.96 $1.02
A brief explanation of any of
the figures above necessary
to enable the figures to be
understood
The financial statements attached to this report have been audited by
PricewaterhouseCoopers and are not subject to a qualification. A copy
of the auditor’s report applicable to the financial statements is
attached to this announcement.
Authority for this announcement
Name of person

authorised
to make this announcement
A.B. Ryan
Contact person for this
announcement
W.A. Burns
Contact phone number (09) 4840352
Contact email address enquire@marlin.co.nz
Date of release through MAP

20 August 2019

Audited financial statements accompany this announcement.

---

For immediate release:

20 August 2019

Another strong Marlin result

Highlights
 Net profit after tax of $8.4m
 Total shareholder return +15.5%
1

 Adjusted NAV return 6.8%
2

 Dividend return 9.0% (7.87 cps)

Marlin Global Limited (NZX: MLN) today announces a net operating profit after tax for the 12 months ended 30
June 2019 of $8.4 million. (2018 : $23.8m).

Chair Alistair Ryan said, “We are pleased with Marlin’s performance, during what was a particularly volatile
and challenging period. Global markets suffered a sharp correction in late 2018 before recovering in the
second half of the financial year. The Marlin portfolio lifted 10.1%
3
before fees and tax, well ahead of its
benchmark index
4
which rose 2.1%.

Senior Portfolio Manager Ashley Gardyne said: “The strong portfolio performance in the second half of the
financial year was broad-based with most of our portfolio companies delivering double digit returns over the
second six months.”

Mr Gardyne added, “During the year we made a number of changes to the Marlin portfolio, including adding
more exposure to the Financials and Information Technologies sectors. New portfolio holdings Dollar General,
Dollar Tree and Electronic Arts contributed to the positive second half of the financial year during which the
Marlin portfolio rallied more than 20% from its lows.”
In accordance with Marlin’s quarterly distribution policy (2% of average NAV per quarter), the company paid a
total of 7.87 cents per share to shareholders during the year ended 30 June 2019. Today, the Board declared a
dividend of 1.93 cents per share, payable on 26 September 2019 with a record date of 12 September 2019.
The Marlin board is pleased to advise that it has negotiated a 33% reduction to the Manager’s performance
fee earn rate (above the performance hurdle) from 15% to 10% together with the introduction of a cap
(1.25%) on the total performance fee amount. The payment of any performance fee remains unchanged at
100% in cash, however there is no longer an obligation on the Manager to apply 25% of any performance fee
to the purchase of ordinary shares in Marlin. The changes take effect from 1 July 2019. The Marlin board
wishes to acknowledge the positive response from Fisher Funds Management Limited to enter into fee
discussions and for agreeing to these changes which will be of significant benefit for Marlin shareholders in the
circumstances when a performance fee is earned.

There has been no change to the fulcrum fee, where the base management fee can be reduced on a sliding
scale below 1.25% to as low as 0.75% depending on the performance of the fund. The Board considers that
the combination of the fulcrum fee for lower performance, with the potential for the Manager to receive
upside benefit for performance above the nominated threshold level is an equitable fee structure for
shareholders and the Manager.

For further information, please contact:

Wayne Burns
Corporate Manager
Marlin Global Limited
Tel: (09) 484 0352

1
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.
2
Adjusted net asset value return – the return to an investor after fees, expenses and tax.
3
Gross performance return – The Manager’s portfolio performance in terms of stock selection and currency hedging before expenses, fees
and tax.
4
S&P Large Mid Cap/S&P Small Cap Index (hedged 50% to NZD).



The total shareholder return, adjusted NAV return and gross performance return methodologies are described in the Marlin Global Non-
GAAP Financial Information Policy. A copy of the policy is available at http://marlin.co.nz/about-marlin/marlin-policies/



About Marlin Global
Marlin Global is a listed investment company that invests in growing companies based outside of New Zealand and Australia. The Marlin
portfolio is managed by Fisher Funds, a specialist investment manager with a track record of successfully investing in growth company
shares. The aim of Marlin is to offer investors competitive returns through capital growth and dividends, and access to a diversified
portfolio of investments through a single, tax-efficient investment vehicle. Marlin listed on the NZX Main Board on 1 November 2007 and
may invest in companies that are listed on any approved stock exchange (excluding New Zealand or Australia) or unlisted international
companies not incorporated in New Zealand or Australia.

---

Independent auditor’s report
To the shareholders of Marlin Global Limited
Marlin Global Limited’s financial statements comprise:
• the statement of financial position as at 30 June 2019;
• the statement of comprehensive income for the year then ended;
• the statement of changes in equity for the year then ended;
• the statement of cash flows for the year then ended; and
• the notes to the financial statements, which include significant accounting policies.
Our opinion
In our opinion, the financial statements of Marlin Global Limited (the Company), present fairly, in all
material respects, the financial position of the Company as at 30 June 2019, its financial performance
and its cash flows for the year then ended in accordance with New Zealand Equivalents to
International Financial Reporting Standards (NZ IFRS) and International Financial Reporting
Standards (IFRS).
Basis for opinion
We conducted our audit in accordance with International Standards on Auditing (New Zealand) ISAs
(NZ) and International Standards on Auditing (ISAs). Our responsibilities under those standards are
further described in the Auditor’s responsibilities for the audit of the financial statements section of
our report.
We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for
our opinion.
We are independent of the Company in accordance with Professional and Ethical Standard 1 (Revised)
Code of Ethics for Assurance Practitioners (PES 1) issued by the New Zealand Auditing and Assurance
Standards Board and the International Ethics Standards Board for Accountants’ Code of Ethics for
Professional Accountants (IESBA Code), and we have fulfilled our other ethical responsibilities in
accordance with these requirements.
Other than in our capacity as auditor we have no relationship with, or interests in, the Company.
PricewaterhouseCoopers, 188 Quay Street, Private Bag 92162, Auckland 1142, New Zealand
T: +64 9 355 8000, F: +64 9 355 8001, pwc.co.nz

Our audit approach
Overview
An audit is designed to obtain reasonable assurance about whether the
financial statements are free from material misstatement.
Overall materiality: $703,000, which represents approximately 0.5% of net
assets. We used this benchmark because, in our view, the objective of the
Company is to provide investors with a total return on the assets, taking
account of both capital and income returns.
We agreed with the Audit and Risk Committee that we would report to them
misstatements identified during our audit above $51,800 as well as
misstatements below that amount that, in our view, warranted reporting for
qualitative reasons.
Because of the significance of the international listed equity investments to the
financial statements, we have determined that there is one key audit matter:
valuation and existence of the international listed equity investments.
Materiality
The scope of our audit was influenced by our application of materiality.
Based on our professional judgement, we determined certain quantitative thresholds for materiality,
including the overall Company materiality for the financial statements as a whole as set out above.
These, together with qualitative considerations, helped us to determine the scope of our audit and the
nature, timing and extent of our audit procedures and to evaluate the effect of misstatements, both
individually and in the aggregate on the financial statements as a whole.
Audit scope
We designed our audit by assessing the risks of material misstatement in the financial statements and
our application of materiality. As in all of our audits, we also addressed the risk of management
override of internal controls including among other matters, consideration of whether there was
evidence of bias that represented a risk of material misstatement due to fraud.
We tailored the scope of our audit in order to perform sufficient work to enable us to provide an
opinion on the financial statements as a whole, taking into account the structure of the Company, the
type of investments held by the Company, the use of third party service providers, the accounting
processes and controls, and the industry in which the Company operates.
The Directors are responsible for the governance and the control activities of the Company. The
Directors have delegated certain responsibilities to Fisher Funds Management Limited (the
Investment Manager) and Trustees Executors Limited (the Administrator). The Company has also
appointed Trustees Executors Limited (the Custodian) to act as custodian of the Company’s
investments.
In establishing our overall audit approach we assessed the risk of material misstatement, taking into
account the nature, likelihood and potential magnitude of any misstatement. As part of our risk
assessment, we considered the Company’s interaction with the Investment Manager and
Administrator and the control environment in place at the Administrator and the Custodian.
PwC

Key audit matter
Key audit matters are those matters that, in our professional judgement, were of most significance in
our audit of the financial statements of the current year. Given the nature of the Company, we have
one key audit matter: valuation and existence of international listed equity investments. The matter
was addressed in the context of our audit of the financial statements as a whole, and in forming our
opinion thereon, and we do not provide a separate opinion on the matter.
Key audit matter How our audit addressed the key audit matter
Valuation and existence of international listed
equity investments
International listed equity investments (the
Investments) are valued at $136.9 million and
represent 97% of total assets.
Further disclosures on the Investments are
included in note 2 to the financial statements.
This was an area of focus for our audit and the
area where significant audit effort was
directed.
As at 30 June 2019, all Investments are in
companies that are listed on stock exchanges
outside of New Zealand and Australia and are
actively traded with readily available, quoted
market prices. The market prices are quoted in
foreign currencies, which are then translated to
New Zealand dollars using the applicable
exchange rate at 30 June 2019.
All Investments are held by the Custodian on
behalf of the Company and administered by
the Administrator.
Our audit procedures included updating our
understanding of the business processes employed by
the Company for accounting for, and valuing, their
investment portfolio.
Our procedures also included assessing the
Administrator’s and Custodian’s internal controls
reports for custody and investment accounting
services for the periods ended 30 September 2018
and 31 March 2019. The Administrator and
Custodian have confirmed that there has been no
material change to their control environment in the
period from 1 April 2019 to 30 June 2019.
Existence
We obtained confirmation of the Investments
holdings and that the Company was the recorded
owner of all the Investments from the Custodian.
Valuation
We agreed the price for all Investments held at 30
June 2019 and the exchange rate at which they have
been converted from the foreign currency to New
Zealand dollars to independent third party pricing
sources.
From the procedures performed, we have no matters
to report.
Information other than the financial statements and auditor’s report
The Directors are responsible for the annual report. The annual report is expected to be made available
to us after the date of this auditor's report.
Our opinion on the financial statements does not cover the other information included in the annual
report and we do not and will not express any form of assurance conclusion on the other information.
In connection with our audit of the financial statements, our responsibility is to read the other
information when it becomes available and, in doing so, consider whether the other information is
materially inconsistent with the financial statements or our knowledge obtained in the audit, or
otherwise appears to be materially misstated.
When we read the annual report, if we conclude that there is a material misstatement therein, we are
required to communicate the matter to the Directors.
PwC

Responsibilities of the Directors for the financial statements
The Directors are responsible, on behalf of the Company, for the preparation and fair presentation of
the financial statements in accordance with NZ IFRS and IFRS, and for such internal control as the
Directors determine is necessary to enable the preparation of financial statements that are free from
material misstatement, whether due to fraud or error.
In preparing the financial statements, the Directors are responsible for assessing the Company’s ability
to continue as a going concern, disclosing, as applicable, matters related to going concern and using
the going concern basis of accounting unless the Directors either intend to liquidate the Company or to
cease operations, or have no realistic alternative but to do so.
Auditor’s responsibilities for the audit of the financial statements
Our objectives are to obtain reasonable assurance about whether the financial statements, as a whole,
are free from material misstatement, whether due to fraud or error, and to issue an auditor’s report
that includes our opinion. Reasonable assurance is a high level of assurance, but is not a guarantee
that an audit conducted in accordance with ISAs (NZ) and ISAs will always detect a material
misstatement when it exists. Misstatements can arise from fraud or error and are considered material
if, individually or in the aggregate, they could reasonably be expected to influence the economic
decisions of users taken on the basis of these financial statements.
A further description of our responsibilities for the audit of the financial statements is located at the
External Reporting Board’s website at:
https://www.xrb.govt.nz/assurance-standards/auditors-responsibilities/audit-report-2/
This description forms part of our auditor’s report.
Who we report to
This report is made solely to the Company’s shareholders, as a body. Our audit work has been
undertaken so that we might state those matters which we are required to state to them in an auditor’s
report and for no other purpose. To the fullest extent permitted by law, we do not accept or assume
responsibility to anyone other than the Company and the Company’s shareholders, as a body, for our
audit work, for this report or for the opinions we have formed.
The engagement partner on the audit resulting in this independent auditor’s report is Richard Day.
For and on behalf of:
Chartered Accountants Auckland
19 August 2019
PwC