BRM – December 2022 monthly update

1
A WORD FROM THE MANAGER
In November, Barramundi’s gross performance return was up
3.7% and the adjusted NAV return was up 3.1%. This compares
to the S&P/ASX200 Index (70% hedged into NZ$) which was up
5.8%.
The ASX200 was buoyed in November by early signs that
China may begin relaxing its zero-COVID policy. This supported
commodity prices which underpinned a 16.2% rise in the
materials index in the month, including a 22% increase in index
heavyweight, BHP’s share price. The utilities sector returned
20.9% in the month driven by a takeover offer for Origin Energy
whose share price rose 41% in the month. All other sectors also
finished in positive territory, with Financials, the worst performing
sector still up 1.1% for the month.
Seasonally, November is a busy month for listed company Annual
General Meetings (AGMs) in Australia. Trading updates provided
at a range of AGMs, pointed to reasonably robust trading
conditions for companies. The expected slowdown in consumer
spending and domestic economic activity is yet to manifest for a
number of Australian corporates.
Portfolio News
At its AGM, NextDC (+18.6% in A$) indicated it has had a
strong start towards meeting its FY23 earnings guidance which
includes revenue that is expected to be 17-22% higher compared
with FY22. The company is offsetting the most acute inflationary
pressures facing the industry. In particular it has revenue increases
built into its contracts. It also has electricity pass through
mechanisms in its contracts, protecting its profits from rising
power prices. Management also noted that its major construction
projects have been contracted at fixed price rates, set before
construction costs started rising materially, helping to contain
overall construction costs.
We attended PWR’s (+16.5%) AGM in Brisbane and had the
good fortune of spending time with management and the Board.
The chair and CEO both reflected on a strong year of growth for
the company over FY22 where revenue grew +28% and after-tax
earnings, +24%. Underpinning this growth is a strong culture
of excellence and drive across the organisation. Touring PWR’s
factory, the pride across all levels of the organisation is strongly
evident. The company is moving to bigger premises to cater to its
expanding order book. So FY23 looks as if it will be another year
of good earnings growth for the company.
Domino’s share price continued rising in November with a
4.1% increase. Its AGM trading update early in the month
indicated that same store sales growth and organic store rollout
for FY23 are both expected to meet their medium-term targets
(+3-6% and +8-10% pa respectively). This, despite a slow start
to the year on both counts. Underlying FY23 after tax profit is
forecast to exceed FY22 after excluding a circa $7m drag from
FX. This infers that a range of headwinds (FX, German royalty
waiver ending, higher share-based payments, any cost inflation
not recovered by price and menu adjustments) will offset the
contribution from the recently completed acquisition of Domino’s
operations in Singapore and Malaysia. November also saw the
exercise of the put/call option over the residual 33% stake in
Domino’s very successful German business that was retained by
Domino’s UK. The exercise price was estimated at A$127m in
June 2022. In early December, Dominos raised A$165m of equity
primarily to fund this purchase.
In late November Brambles announced that it would combine its
CHEP China pallet and automotive container operation with the
larger Chinese business of its competitor, Loscam. In exchange,
Brambles will own 20% of the combined Chinese business.
In FY22 CHEP China accounted for less than 1% of Brambles’
revenue and we understand it was not profitable. The pooled
pallet market in China is at a fledgling stage of development,
accounting for less than 1% of the total pallets in the region.
This represents a large growth opportunity that, in our view,
can be better realised by the combined business than by CHEP
China as a stand-alone operation. The combined business will be
the largest in Greater China and, in our view, is also potentially
advantaged by having a high proportion of Chinese ownership
(via Sinotrans and Trustar Capital). Brambles shares ended
November 3.7% higher.
James Hardie (-14.1%) disappointed the market with its
quarterly trading update released in the month. It has reduced
earnings guidance for FY23, primarily on the back of a rapidly
slowing housing construction market in the US. Analysts remain
cautious on JHX’s outlook and are looking for clarity on the areas
that will be prioritised by new CEO Aaron Erter. This is likely to be
forthcoming in the next few months. This is unlikely to alter the
structural growth tailwinds underpinning JHX’s growth. We think
its longer-term earnings growth prospects are undiminished.
1
Share Price Premium to NAV (including warrant price on a pro-rated basis and using the net asset value per share, after expenses, fees and tax, to four decimal places).
MONTHLY UPDATE
December 2022
Warrant Price
$
0.01
$
0.71
Share Price
PREMIUM
1
0.4
%

as at 30 November 2022
BRM NAV
$
0.71

SECTOR SPLIT
as at 30 November 2022
KEY DETAILS
as at 30 November 2022
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
$0.74
PERFORMANCE FEE CAP
1.25%
SHARES ON ISSUE
270m
MARKET CAPITALISATION
$192m
GEARING
None (maximum permitted 20%
of gross asset value)
2
%
18
%
20
%

INDUSTRIALS
18
%
COMMUNICATION
SERVICES

HEALTH CARE
26
%
3
%
2
%

FINANCIALS
CASH &
DERIVATIVES
CONSUMER
STAPLES
4
%
Xero’s (-9.5%) interim financial results underwhelmed
expectations. The company continues to deliver to expectation
in its core Australian and NZ markets. However, UK subscriber
growth was softer than expected. The UK slowness reflects
the tough domestic environment, changes that were made to
the way Xero’s sales team manages its UK partners (which has
been resolved) and a slow uptake of digitalization of tax filings
amongst small businesses. The company expects these headwinds
to fade and momentum to pick up in the second half of FY23.
Xero also announced that CEO Steve Vamos is retiring in February
2023 and will be replaced by US based Sukhinder Singh Cassidy.
Resmed shares slipped by 1.6% in November which probably
reflects the lingering impact of its September 2022 quarterly
result which was not well received when it was released in late
October. Revenue and EBIT rose by 5% and 4% respectively
for the quarter but earnings were flat. The main area of
disappointment was a 10% constant currency fall in devices sales
outside of the Americas, where devices sales were up by 23%.
This was due to less acceptance of the stop-gap Card-to-Cloud
Robbie Urquhart
Senior Portfolio Manager
Fisher Funds Management Limited
device solution in European markets where health insurance
reimbursement can depend on telemonitoring of devices, which
card-to-cloud cannot provide. The only notable news over
November was completion of the US$1 billion acquisition of
Medifox Dan that was announced in June. This is a healthcare
SaaS business that provides clinical, financial and operational
solutions to German out-of-hospital care providers.
Portfolio Changes
We increased our weighting in Macquarie Group following its
resilient earnings result in late October (refer to last month’s
update for more detail).
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INFORMATION
TECHNOLOGY
7
%
CONSUMER
DISCRETIONARY
MATERIALS

NOVEMBER’S SIGNIFICANT RETURNS IMPACTING
THE PORTFOLIO
during the month in Australian dollar terms
NEXTDC
+19
%
PWR HOLDINGS
+17
%
NANOSONICS
+15
%
JAMES HARDIE
INDUSTRIES
- 14
%
CARSALES.COM
+ 12
%
5 LARGEST PORTFOLIO POSITIONS as at 30 November 2022
WISETECH
6
%
CSL LIMITED
9
%
CARSALES.COM
6
%
AUB GROUP
5
%
CBA
5
%
The remaining portfolio is made up of another 22 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
Oct
2021
Oct
2022
1 Month3 Months1 Year3 Years
(annualised)
5 Years
(annualised)
Company Performance
Total Shareholder Return(0.2%)(14.7%)(21.7%)+10.8%+14.5%
Adjusted NAV Return+3.1%(0.0%)(8.7%)+8.8%+10.7%
Portfolio Performance
Gross Performance Return+3.7%+1.1%(7.7%)+11.1%+13.5%
Benchmark Index^+5.8%+4.6%+6.3%+6.5%+8.3%
PERFORMANCE to 30 November 2022
3
TOTAL SHAREHOLDER RETURN to 30 November 2022
^Benchmark Index: S&P/ASX 200 Index (hedged 70% to NZD)
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 dividends (and other capital management initiatives) and after expenses, fees and tax,
»adjusted NAV return – the percentage change in the adjusted NAV,
»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 https://barramundi.co.nz/about-barramundi/barramundi-policies

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 a 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
Email: enquire@barramundi.co.nz | www.barramundi.co.nz
4
Computershare Investor Services Limited
Private Bag 92119, Auckland 1142
Phone: +64 9 488 8777
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
The Manager has authority delegated
to it from the Board to invest according
to the Management Agreement and
other written policies. Barramundi’s
portfolio is managed by Fisher Funds
Management Limited. Robbie Urquhart
(Senior Portfolio Manager), Terry Tolich
and Delano Gallagher (Senior Investment
Analysts) 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 Board of Barramundi
comprises independent
directors Andy Coupe (Chair),
Carol Campbell, David
McClatchy and Fiona Oliver.
Warrants
»Barramundi announced a new issue of warrants on
27 April 2022
»Information pertaining to the warrants was mailed/
emailed to shareholders on 4 May 2022
»The warrants were issued at no cost to eligible
shareholders in the ratio of one warrant for every four
Barramundi shares held based on the record date of
13 May 2022
»The warrants were allotted to shareholders on
16 May 2022 and listed on the NZX Main Board from
17 May 2022
»The Exercise Price of each warrant is $0.89, adjusted
down for the aggregate amount per Share of any cash
dividends declared on the shares with a record date
during the period commencing on the date of allotment
of the warrants and ending on the last Business Day
before the final Exercise Price is announced by Barramundi
»The Exercise Date for the new warrants is 26 May 2023