KFL – September 2021 Quarterly Newsletter

Kingfish delivered a solid return, with an Adjusted NAV Return
of +8.5% over the September quarter, as compared with our
benchmark, the S&P/NZX50G index, which was up 4.9% for the
period.
Mainfreight was the standout performer in the September quarter.
On 1 September, the company released another trading update. That
was the eighth detailed update in the past 18 months, compared to
three trading updates per year normally. Unique times call for unique
transparency which reflects the company’s quality management team.
This update showed a strong acceleration in performance, with
weekly average profit before tax increasing from $6.2 million (weeks
1–17) to $7.3 million (weeks 18–22).
The company is helping its Air & Ocean freight customers navigate
extreme disruption to supply chains – this presents the opportunity
to add greater value with commensurate rewards. We trimmed our
position slightly during the month as the share price has been very
strong on the back of index changes.
A strong balance sheet can support growth
We prefer companies with strong balance sheets versus those
carrying excessive debt. Good business models shouldn’t need to
take on too much debt to deliver attractive returns.

Vista’s cash reserves allowed it to emerge from COVID a
stronger company
Vista shares performed strongly during the September quarter as
moviegoers continue to return to cinemas in its key markets of the US
and Europe. Box office figures in August and September have steadily
improved towards pre-pandemic levels. And the film release schedule
is strong, starting with the latest James Bond movie in October. This
should further support the recovery for Vista’s customers. In China,
The Battle at Lake Changjin, broke single-day box office record
during the national holiday. The movie recorded 1.5 billion yuan
(over NZ$300m) at the box office in 4 days. People want to go to the
movies again!
But it’s worth rewinding to remember what happened and reflect on
the opportunity that was available.
It’s hard to believe that at one stage last year almost every movie
theatre in the world was closed. This has not happened since the first
movie theatre in the world opened over a century ago, although the
Spanish flu did close some cinemas. In San Antonio in 1919, the
local paper reported that each theatre was supposed to assign a man
‘who shall have as his sole business the spotting of any person in the
audience who coughs.’
From March 2020, many cinemas paused paying their fees to
Vista as they were closed and in a battle for survival. This put the
company’s financial position and share price under stress. But we
knew that most cinemas normally generate positive cash flows even
at a reduced level of admissions. And movie theatres are specialised
real estate that cannot easily be refitted for another use. This means
that landlords or lenders are not keen to put cinema operators into
receivership, as the underlying assets do not have much value. So we
thought the prospect of large scale closures of cinemas was unlikely.
Going to the movies is a relatively affordable form of out-of-home
entertainment. Vista is the global leader in its field and its product is
essential to cinemas’ day-to-day operations, so we were convinced
Vista would survive and thrive when cinemas inevitably re-opened.
Vista raised capital early in the pandemic. This was critical. It solved
the company’s financial-position headache and allowed it to navigate
the pandemic with clear eyes. We were able to participate at
$1.05, which represented a large discount to our assessment of the
company’s intrinsic value. The share price finished September 158%
higher than this at $2.71.
The company doubled down on focusing on its customers. It launched
software upgrades that could deal with socially distanced seating
as cinemas re-opened, and promoted its mobile ticketing products
to late adopters. It forged ahead with Vista Cloud, its software-as-a-
service product that can reduce customers’ hardware and IT support
costs. Vista Cloud increases the size of Vista’s recurring revenue and
earnings pie. It could only do this because of its strong balance sheet.

Summerset’s more comfortable debt levels have helped it
outperform Ryman
Retirement village operators Ryman and Summerset have both
delivered attractive long-term returns. But since 2014 Summerset has
outperformed Ryman by around 200% with over half of this coming
in the last two years.
Why?
We think the over-riding reason has been Summerset’s ability to
balance growth with debt levels and project risk management. To
grow, Summerset has continually added to its landbank. This can
put strain on the balance sheet, with bare land taking 4–10 years to
generate income. To manage risk, Summerset has focused on low-
density sites that are easier to build, faster to generate income, and
tie up less capital. This has kept debt balances in check, allowing
Summerset to pursue growth on many sites at once. With a strong
landbank and low levels of debt, Summerset can maintain a smooth,
sustainable increase in its number of units built each year.
Ryman has a strong track record in development and the largest
operator in the industry. But to grow an ever-larger asset base,
Ryman has increasingly focused on big, complex sites in dense urban
areas. These sites are often multi-level, with added consenting and
construction complexity and greater risk of delays. Ryman has tied up
people and capital in these projects, leading to lower land-banking,
higher debt, and missed some of its growth targets. That said, we
don’t think Ryman has lost its mojo – its project management has
improved and Ryman leads the industry in complex developments.
Summerset may be closing the gap on Ryman, but we continue
to believe both operators have a long runway for growth ahead,
particularly in Australia.
1
Share price Premium to NAV (using NAV to four decimal places).
QUARTERLY NEWSLETTER
1 July 2021 – 30 September 2021
KFL NAV
$
1.88
$
2.03
Share Price
PREMIUM
1
8.0
%

as at 30 September 2021
Sam Dickie
Senior Portfolio Manager
15 October 2021
1

2
Disclaimer: The information in this newsletter 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 newsletter is not intended to constitute professional or investment advice and should not be relied upon in making any investment decisions. Professional financial advice from a financial
adviser should be taken before making an investment. To the extent that the newsletter 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.
3 Months
3 Years
(annualised)
5 Years
(annualised)
Company Performance
Total Shareholder Return+2.3%+25.7%+19.8%
Adjusted NAV Return+8.5%+18.3%+16.0%
Portfolio Performance
Gross Performance Return +9.4%+21.5%+18.8%
S&P/NZX50G Index+4.9%+12.4%+12.5%

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 expenses, fees and tax,
»adjusted NAV return – the net return to an investor after expenses, fees and tax,
»gross performance return – the Manager’s portfolio performance in terms of stock selection,
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 newsletter 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/
LISTED COMPANIES% Holding
Auckland Intl Airport9.2%
Contact Energy4.0%
Delegat Group2.9%
Fisher & Paykel Healthcare14.5%
Freightways3.4%
Infratil14.9%
Mainfreight20.3%
Meridian Energy1.3%
Port of Tauranga2.3%
Pushpay Holdings1.4%
Ryman Healthcare4.9%
Summerset9.1%
The a2 Milk Company3.8%
Vista Group International4.3%
Equity Total96.3%
New Zealand dollar cash3.7%
TOTAL100.0%
PORTFOLIO HOLDINGS SUMMARY
as at 30 September 2021
COMPANY NEWS
Dividend Paid 24 September 2021
A dividend of 3.52 cents per share was paid to Kingfish shareholders on 24 September 2021 under the quarterly distribution policy. Interest in
Kingfish’s dividend reinvestment plan (DRP) remains high with 41% of shareholders participating in the plan. Shares issued to DRP participants are at
a 3% discount to market price. If you would like to participate in the DRP, please contact our share registrar, Computershare on (09) 488 8777.
PERFORMANCE
as at 30 September 2021
Kingfish Limited
Private Bag 93502, Takapuna, Auckland 0740, New Zealand
Phone: +64 9 489 7094 | Fax: +64 9 489 7139
Email: enquire@kingfish.co.nz | www.kingfish.co.nz
If you would like to receive future
newsletters electronically please email
us at enquire@kingfish.co.nz
SIGNIFICANT RETURNS
IMPACTING THE PORTFOLIO
DURING THE QUARTER
MAINFREIGHT
+27
%
RYMAN
HEALTHCARE
+15
%
SUMMERSET
+14
%
VISTA GROUP
+13
%
AUCKLAND
INTERNATIONAL
AIRPORT
+8
%
FOREIGN TAX COMPLIANCE ACT (FATCA) AND COMMON REPORTING
STANDARD (CRS)

As a result of the New Zealand Government agreeing to participate in the exchange of information with other jurisdictions under the Foreign Tax
Compliance Act (FATCA) and Common Reporting Standard (CRS), Financial Institutions are required to undertake due diligence to determine the
account holders’ jurisdiction of tax residence. All shareholders will have received a Tax Residency Self-Certification form from Computershare
depending on when they first purchased their securities. Please ensure you complete and return this important document if you have not already
done so. For more information please visit the IRD website: https://www.ird.govt.nz/international-tax/exchange-of-information/crs/registration-and-
reporting or contact Computershare if you are unsure of whether you have completed your form.