BRM – March 2021 monthly update

1
A WORD FROM THE MANAGER
In February Barramundi returned a gross performance loss of
(0.7%) and an adjusted NAV loss of (0.8%). This compares to the
ASX200 Index which returned +1.5% (70% hedged into NZ$).
February was characterised by a further upwards march in interest
rates. As momentum for the global vaccine roll-out continued
to build, investors have focussed on the attendant effects this
will have on inflation resulting from a strong global economic
rebound. In line with global sovereign bonds, the Australian 10yr
government bond yield rose from 1.13% to 1.92% in the month.
Sectors benefitting from these dynamics led the ASX higher in
the month. Financials rose +6.8%. Materials (+6.0%) and Energy
(+3.4%) were close behind. Conversely, sectors that don’t benefit
strongly from these dynamics such as Utilities (-8.9%), Information
Technology (-8.8%) and Real Estate (-6.5%), all lagged.
Financial results during the busy February reporting season also
drove individual company share prices in the month. On the whole,
this was a good reporting season for our portfolio companies with
financial results as good or better than expected by the market.
Portfolio News
PWH’s (+23.3% in A$) results were ahead of guidance. PWH
benefitted from the re-arranged motorsport calendars which
resulted in additional races being compressed into 2H 2020. It
also experienced strong growth across other divisions and for
example, benefitted from the recommencement of high-end car
manufacturing. Pleasingly, PWH also won new contracts in its
nascent Emerging Technology division. This is tangible evidence
that its culture of innovation is bearing fruit. The company has a
strong foundation for further growth in 2021.
AUB Group (+17.4%) delivered a better than expected first half
result and upgraded full year earnings guidance. Unaffected by
COVID, the key Australian Broking division grew operating profits
by 60%! This was underpinned by premium rate rises (+7%) and
contributions from two acquisitions. Most importantly, there was
strong evidence that initiatives put in place by CEO Mike Emmett to
improve the company’s performance are bearing fruit. And Mike is
far from done with these initiatives.
Our bank shareholdings of Westpac (+12.7%), ANZ (+10.4%),
NAB (+4.7%) and CBA (+0.1%) continued their upward trajectory
as market updates revealed further reductions in COVID related
repayment deferrals. Bolstered by rising interest rates, the banks
operating conditions continue to improve.
Nanosonic’s (-11.8%) 1H21 was a tale of two ‘quarters’.
Revenues fell sharply in the September quarter (-31%), and
rebounded strongly in the December quarter, rising +48% on the
previous year. Pandemic related declines in ultrasound procedure
volumes and restrictions on hospital access impacted September
quarter results. These trends eased in the December quarter
leading to a rebound in activity (and sales). This improvement is
expected to continue in the next few months.
SEEK (-8.4%) released a strong set of half year results given the
tough economic backdrop. Its core ANZ division was the standout,
with job advertisement volumes rebounding from the depths of
April 2020 (down -65% at the time) to being marginally ahead for
the month of December (vs Dec 2019).
The ANZ business also benefitted from a rebound in hiring from
small - medium sized companies in pandemic impacted industries
such as hospitality and trades and services.
The market was disappointed by the price at which SEEK sold
some of its shares in its Chinese subsidiary Zhaopin. SEEK reduced
its shareholding in Zhaopin from 61.1% to 23.5%. That said, the
sale represents a return of 5x SEEK’s initial investment. It reduces
SEEK’s reliance on the competitive Chinese market. And the sales
proceeds provide SEEK with additional money to invest in its other
high growth divisions such as in online education.
In a well-orchestrated succession plan, SEEK announced that
longstanding CEO (and founder) Andrew Bassat is stepping down
and becoming Executive Chairman and CEO of SEEK’s early stage,
high growth businesses. The head of SEEK’s largest division and
COO, Ian Narev takes over as CEO.
To help fund purchases of companies in sectors benefitting from
rising interest rates, investors typically sold shares in high growth or
defensive businesses such as information technology or healthcare
companies. To this end, despite delivering credible financial results,
portfolio companies such as Wisetech (-12.8%), Resmed (-9.8%)
and Sonic Healthcare (-7.7%) underperformed in the month.
We think the longer-term prospects for each of these businesses
remains sound.
Brambles (-6.3%) was likely also affected by this dynamic.
Brambles delivered a solid first half result and upgraded full
year guidance. A number of near-term factors that may also be
weighing on its price includes the unfavourable exchange rate (A$
strength hurts its largely US$ denominated earnings). Inflationary
1
Share Price Premium to NAV (including warrant price on a pro-rated basis and using NAV to four decimal places).
MONTHLY UPDATE
March 2021
BRM NAV
$
0.79
$
0.98
Share Price
Warrant PricePREMIUM
1
$
0.20 31.2
%

as at 28 February 2021

SECTOR SPLIT
as at 28 February 2021
KEY DETAILS
as at 28 February 2021
FUND TYPE
Listed Investment Company
INVESTS IN
Growing Australian companies
LISTING DATE
26 October 2006
FINANCIAL YEAR END
30 June
TYPICAL PORTFOLIO SIZE
20-35 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 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
$0.65
PERFORMANCE FEE CAP
1.25%
SHARES ON ISSUE
211m
MARKET CAPITALISATION
$207m
GEARING
None (maximum permitted 20%
of gross asset value)
4
%
INFORMATION
TECHNOLOGY
19
%
21
%

INDUSTRIALS
17
%
COMMUNICATION
SERVICES

HEALTHCARE
28
%
4
%

FINANCIALS
CONSUMER
STAPLES
6
%
CONSUMER
DISCRETIONARY
cost pressures will weigh on earnings if not recouped through
higher pricing (although 2021 margin guidance is unchanged).
A key US customer is also trialling a switch to plastic pallets with
Brambles. This could impact earnings if it proceeds. Brambles has
emphasised any switch needs to meet strict financial criteria. We
continue to like Brambles’ long-term growth prospects and its
undemanding valuation.
Portfolio Changes
We decided to exit our ARB (-4.6%) shareholding in the month.
ARB posted a record half year result in line with its trading update
in January. ARB has been a strong beneficiary of the COVID-19 led
government stimulus which has boosted demand for its products
in many markets. With international travel still off the agenda,
demand for ARB’s products will likely remain strong for the next
year. It will also continue to benefit from strong order books.
Pent up demand for new 4x4s / SUVs in Australia (assisted by
one-off tax breaks) will take time to be fulfilled as COVID-induced
manufacturing disruptions have yet to be fully resolved.
The increase in ARB’s share price suggests to us that the market
Robbie Urquhart
Senior Portfolio Manager
Fisher Funds Management Limited
is treating this current earnings trajectory as a permanent feature.
This is reflected to some extent in future earnings expectations
and more explicitly in ARB’s valuation (E2
2
and P2
3
scores in STEEPP
respectively).
As economies open up, supply chain disruptions ease, COVID
related tax breaks roll off in 2022 and international travel
opens up, we believe a number of ARB’s tailwinds will turn into
headwinds.
We like ARB as a company, hold management in high regard and
value its strong position in the niche 4x4 accessories market. We
would like to think it will re-appear in the portfolio at some point,
but for now we move it into our fishing pond.
2
The Barramundi portfolio also holds cash.
2
E2 is Earnings Growth Forecast
3
P2 is Price/Valuation

FEBRUARY’S SIGNIFICANT RETURNS IMPACTING
THE PORTFOLIO
during the month in Australian dollar terms
Typically the Barramundi portfolio will be invested 90% or more in equities.
PWH
+23
%
AUB GROUP
+17
%
WESTPAC
+13
%
WISETECH
-13%
CREDIT CORP GROUP
+12
%
5 LARGEST PORTFOLIO POSITIONS as at 28 February 2021
CARSALES.COM
6
%
CSL LIMITED
8
%
SEEK
6
%
WISETECH
5
%
CBA
5
%
The remaining portfolio is made up of another 21 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
Share PriceTotal Shareholder Return
$
0.00
$
0.50
$
1.00
$
1.50
$
2.00
$
2.50
$
3.00
$
3.50
Oct
2017
Oct
2018
Oct
2019
Oct
2020
TOTAL SHAREHOLDER RETURN to 28 February 2021
1 Month3 Months1 Year3 Years
(annualised)
5 Years
(annualised)
Company Performance
Total Shareholder Return+1.8%+1.6%+69.1%+31.5%+21.6%
Adjusted NAV Return(0.8%)+1.9%+22.3%+14.9%+12.9%
Portfolio Performance
Gross Performance Return(0.7%)+2.2%+25.9%+18.5%+16.4%
Benchmark Index^+1.5%+3.5%+7.8%+7.5%+11.0%
PERFORMANCE to 28 February 2021
^Benchmark index: S&P/ASX Small Ords Industrial Gross Index until 30 September 2015 & S&P/ASX200 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, after expenses, fees and tax,
»adjusted NAV return – the return to an investor after expenses, fees and tax,
»gross performance return – the Manager’s portfolio performance in terms of stock selection and currency hedging before expenses, fees and tax, and
»total shareholder return – the return combines the share price performance, the warrant price performance, the net value of converting any warrants into shares, and the dividends paid to shareholders. It assumes
all dividends are reinvested in the company’s dividend reinvestment plan, and that shareholders exercise their warrants, (if they were in the money), at warrant expiry date
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 20 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 its shares
on market
»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
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.
Warrants
»On 26 August 2020 a new issue of warrants (BRMWF)
was announced
»The warrants were issued at no cost to eligible
shareholders in the ratio of one warrant for every four
Barramundi shares held
»The warrants were allotted to shareholders in October
2020 and the warrants listed on the NZX Main Board
from early October 2020. (Information pertaining to
the warrants was mailed/emailed to shareholders in
September 2020)
»The Exercise Price of each warrant is $0.70, adjusted
down for dividends declared during the period up to
the announcement of the final Exercise Price. Dividends
totalling 3.03 cents per share have been declared to date
and there are two more dividends expected to be declared
in the remaining period up to the announcement of the
29 October 2021 exercise price
»The Exercise Date for the new warrants (BRMWF) is
29 October 2021
»The final Exercise Price will be announced and an Exercise
Form sent to warrant holders in September 2021