Marlin experiences difficult year

Marlin Global Limited results announcement

Results for announcement to the market
Name of issuer Marlin Global Limited
Reporting Period 12 months to 30 June 2022
Previous Reporting Period 12 months to 30 June 2021
Currency NZ$
Amount (000s) Percentage change
(Loss)/Revenue from
continuing operations
(58,473) (175%)
Total (Loss)/Revenue (58,473) (175%)
Net (loss)/profit from
continuing operations
(60,427) (187%)
Total net (loss)/profit (60,427) (187%)
Interim/Final Dividend
Amount per Quoted Equity
Security
$NZ 1.85 cents per share
Imputed amount per Quoted
Equity Security
$NZ 0.00000152
Record Date 8 September 2022
Dividend Payment Date 23 September 2022
Current period Prior comparable period
Net tangible assets per
Quoted Equity Security
$0.89 $1.28
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
W.A. Burns
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

22 August 2022
Audited financial statements accompany this announcement.

---

For immediate release:

22 August 2022

Marlin experiences difficult year

Highlights
• Net loss after tax for the year ended 30 June 2022 ($60.4m)
• Total Shareholder return
1
-27.6%
• Dividend return +7.0%
• Adjusted NAV return
2
-25.6%

Marlin Global Limited (NZX: MLN) today announced a net loss of $60.4m for the 12-month period
ended 30 June 2022, a significant turnaround from last year’s strong net profit of $69.2m.

Key elements of the FY21 result include net losses on investment of $59.2m, dividend, interest and
other income of $0.7m, offset by expenses, fees and tax of $1.9m.

Chair Andy Coupe noted “It has been a very tough year for international equity markets. Global
uncertainty about the ongoing implications of Covid, inflationary concerns, rising interest rates and
the political uncertainty in Europe, following Russia’s invasion of Ukraine, have dominated market
sentiment and impacted commodity prices. This, coupled with the fall in investor confidence, has
seen defensive stocks (utilities) and cyclical stocks (energy and banks) favoured over quality growth
companies, which has put downward pressure on the share prices of stocks in the Marlin portfolio.”
Despite the Manager’s best assessment of longer-term growth opportunities, the performance of
the Marlin portfolio has been disappointing. The Total Shareholder Return
1
was down 27.6%,
reflecting in part the lower share price, and the Adjusted NAV return
2
was down 25.6%. The Gross
Performance return
3
of -24.9% was well behind the company’s benchmark index
4
, which was down
12.8%. However, the board is encouraged that, despite the difficult international equity
environment, the majority of the companies within the Marlin portfolio are delivering solid earnings.
This underlying business performance allows the board to have confidence about the investment
strategy and the medium-term resilience of the portfolio, as evidenced by the portfolio
outperformance the company’s benchmark index over each of the last three and five years.
The lower return delivered by the portfolio activated the fulcrum fee
5
which reduced the
management fee for the year from 1.25% to 0.75%. The fulcrum fee mechanism is a particular
feature of the Fisher-managed listed equity funds which reduces the management fee when actual
returns fall below the S&P/NZX Bank Bill 90-day rate.
The Marlin directors have maintained the company’s 2% of NAV per quarter distribution policy as
the directors recognise that the regularity of the tax-effective quarterly dividends are important for
many shareholders.
In accordance with Marlin’s quarterly distribution policy, the company paid a total of 9.68 cents per
share to shareholders during the year ended 30 June 2022. On 22 August 2022, the board declared a
dividend of 1.85 cents per share, payable on 23 September 2022 with a record date of 8 September.

Senior Portfolio Manager and Chief Investment Officer Ashley Gardyne said: “Performance of the
Marlin portfolio has been poor over the last year. Equity markets regularly experience downturns,
and our portfolio will also underperform from time-to-time, the level of recent underperformance
however is disappointing.”

Mr Gardyne added, “Although some of our portfolio companies haven’t delivered on expectations,
by and large they are delivering solid earnings growth despite the challenging economic backdrop.
Having undertaken a detailed review of the portfolio, we believe Marlin holds a portfolio of high-
quality growth companies that will deliver good results for shareholders over the long-term.”


For further information, please contact:

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

1
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.
2
Adjusted NAV (net asset value) return – the underlying performance of the investment portfolio, adjusted for capital management
initiatives (dividends, buybacks & warrants), and after expenses, fees 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).
5
In accordance with the Management Agreement, the management fee rate has reduced from 1.25%pa to 0.75%pa for the year, (i.e. a 50
basis point reduction), because the gross performance of Marlin (as calculated for the fulcrum fee rebate) was 20.3 percentage points
below the S&P/NZX Bank Bill 90 day index rate for the year of 0.8%.


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.

---

PricewaterhouseCoopers, 15 Customs Street West, Private Bag 92162, Auckland 1142, New Zealand
T: +64 9 355 8000, F: +64 9 355 8001, pwc.co.nz


Independent auditor’s report
To the shareholders of Marlin Global Limited
Our opinion
In our opinion, the accompanying financial statements of Marlin Global Limited (the Company) present
fairly, in all material respects, the financial position of the Company as at 30 June 2022, 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).
What we have audited
The financial statements comprise:
• the statement of financial position as at 30 June 2022;
• 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 and other
explanatory information.

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.
Independence
We are independent of the Company in accordance with Professional and Ethical Standard 1
International Code of Ethics for Assurance Practitioners (including International Independence
Standards) (New Zealand) (PES 1) issued by the New Zealand Auditing and Assurance Standards
Board and the International Code of Ethics for Professional Accountants (including International
Independence Standards) issued by the International Ethics Standards Board for 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.
Key audit matters
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 listed equity investments. This 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.

PwC 2


Description of the key audit matter How our audit addressed the key audit matter
Valuation and existence of listed equity
investments
Listed equity investments (the investments) are
valued at $176 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 an
area where a significant proportion of audit
effort was directed.
As at 30 June 2022, all investments were in
companies that were listed on recognised
stock exchanges and were actively traded with
readily available, quoted market prices. The
market prices were quoted in foreign
currencies, and were then translated to New
Zealand dollars using the exchange rate at 30
June 2022.
All investments are held by Trustees Executors
Limited (the Custodian) on behalf of the
Company. Trustees Executors Limited also
provides administration services for the
Company.
























Our audit procedures included updating our understanding of
the business processes employed by the Company for
accounting for, and valuing, its investment portfolio.
We obtained confirmation from the Custodian that the
Company was the recorded owner of all the recorded
investments.
We obtained copies of and assessed Trustees Executors
Limited’s Internal Controls Reports for Custody, Investment
Accounting and Registry services for the period from 1 April
2021 to 31 March 2022. Trustees Executors Limited has
confirmed that there has been no material change to the
control environment in the period from 1 April 2022 to 30
June 2022.
We agreed the price for all investments held at 30 June 2022
and the exchange rate at which they have been converted
from foreign currencies to New Zealand dollars to
independent third-party pricing sources.


Our audit approach

Overview
Materiality Overall materiality: $890,000, which represents approximately 0.5%
of net assets.
We chose net assets as the benchmark because, in our view, the
objective of the Company is to provide investors with a total return on
its assets, taking account of both capital and income returns.
Key audit matters
As reported above, we have one key audit matter, being: Valuation
and existence of listed equity investments.

As part of designing our audit, we determined materiality and assessed the risks of material
misstatement in the financial statements. In particular, we considered where management made
subjective judgements; for example, in respect of significant accounting estimates that involved
making assumptions and considering future events that are inherently uncertain. 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
accounting processes and controls, and the industry in which the Company operates.

PwC 3


Materiality
The scope of our audit was influenced by our application of materiality. An audit is designed to obtain
reasonable assurance about whether the financial statements are free from material misstatement.
Misstatements may arise due to fraud or error. They are considered material if, individually or in
aggregate, they could reasonably be expected to influence the economic decisions of users taken on
the basis of the financial statements.
Based on our professional judgement, we determined certain quantitative thresholds for materiality,
including the overall 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, the nature,
timing and extent of our audit procedures and to evaluate the effect of misstatements, both individually
and in aggregate, on the financial statements as a whole.
Other information
The Directors are responsible for the other information. The other information comprises the
information included in the Annual report, but does not include the financial statements and our
auditor's report thereon. 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 and we will not express
any form of audit opinion or assurance conclusion thereon.
In connection with our audit of the financial statements, our responsibility is to read the other
information 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 other information not yet received, if we conclude that there is a material
misstatement therein, we are required to communicate the matter to the Directors and use our
professional judgement to determine the appropriate action to take.
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.

PwC 4
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 Philip Taylor.
For and on behalf of:
Chartered Accountants
22 A
ugust 2022
Auckland