BRM – May 2023 monthly update

1
A WORD FROM THE MANAGER
In April, Barramundi’s gross performance return was up 4.8% and
the adjusted NAV return was up 4.5%. This compares to the S&P/
ASX200 Index (70% hedged into NZ$) which was up 1.9%.
Assisted by ‘better than expected’ earnings results from US
companies and stability in interest rates, April was a positive month
for many share markets around the world. In Australia, the market
was also supported by the Reserve Bank of Australia’s (“RBA”)
decision in April to keep the cash rate at 3.6% rather than to lift it by
0.25%. This was deemed helpful for consumers with mortgages and
was also seen as a signal that the interest rate hiking cycle is close to
peaking.
Portfolio News
Fineos (+29.1% in A$) provided a positive trading update which
included strong revenue growth and supportive results from its cost
cutting initiatives. During the month it signed a new customer to its
Absence product. The customer is a large North American business
with 40,000+ employees and will use Fineos’s Absence product
to self-administer its absence / leave pay function. The Absence
self-administration market is adjacent to Fineos’ existing Absence
business, where it previously only counted large insurance carriers as
customers. Fineos sees further opportunities in this market.
Encouragingly it also announced that another large US based
customer was transitioning from Fineos’ on-premise product to the
cloud. It was a busy month for Fineos. In collaboration with American
Public Life, Fineos released a case study documenting the successful
implementation of Fineos’ software at American Public Life. Case
studies like this one, and the one released last year with New York
Life, are important for validating Fineos’ growing reputation as a
reliable software partner within the insurance market.
During April, data centre provider Next DC (+9.8%) announced its
largest level of incremental customer contract wins. It added +35.9
megawatts (MW) in new contracts, a 43% increase in the total level
of contracted utilisation which now stands at 120MW. The majority
of this contracted capacity was sold at its Sydney (S3) data centre
site. Over the last year, Next DC’s share price had been negatively
impacted by the slow uptake of the data centre capacity that Next
DC had built. The timing and large scale of this increase in contracted
utilisation corroborated Next DC’s contention that it adds to its data
centre capacity only when it has some visibility of potential client
uptake of that capacity.
Brambles’ (+6.1%) third quarter 2023 trading update maintained
the strong revenue and earnings momentum of the first six months
of the year. For the nine months to March, group revenue rose 15%
on a constant currency basis versus the previous comparable period.
This infers third quarter revenue growth accelerated to around
17%. Revenue growth is being driven by price increases to recover
the higher costs of serving customers. Brambles’ key input costs
(lumber, labour, transport) are all higher and it has also implemented
customer-specific increases based on the nature of their pallet
movements as their contracts fall due. Volume growth is broadly flat
on the prior year reflecting pallet supply constraints, a softer macro
environment and deliberate shedding of some unprofitable contracts.
The company raised its guidance for 2023 constant currency revenue
growth to 14-15% (was 12-14%). This has lifted expected constant
currency earnings growth to 17-19% (was 15-18%).
On the last trading day of the month Resmed (+4.1%) disclosed a
very strong result for its March 2023 quarter. With semiconductor
chip supply continuing to improve, Resmed was finally able to take
maximum advantage of Philips’ ongoing enforced absence from the
market due to a major product recall. This was directly reflected in
the 48% jump in Americas devices sales for the quarter. There was a
notable return to strong devices growth in the rest of the world, up
36% in constant currency, as Resmed is now able to supply greater
volumes of cloud-connected devices rather than the stop-gap card-
to-cloud product that had not been that well received in Europe.
Global mask sales were up by a very healthy 15% in constant
currency. The only negative in the result was a further contraction
in gross margin. However, a good part of this is due to the shift
in mix towards devices which have a lower margin than masks.
Underlying earnings for the quarter were up by a very satisfactory
28%. The timing of Philips’ return to the market is unclear and in the
regulator’s hands. In the meantime, Resmed is focused on maximising
its share gains and aims to not cede share when Philips does return.
Seek (+2.1%) had its investor day in early April. It downgraded near
term revenue guidance as job advertisements continue to decline
from last year’s record high levels. Despite this, it maintained its full
year earnings guidance. Management also provided what it sees
as the long-term revenue growth opportunities for the business. It
expects revenue growth of around 10% pa over the next few years.
This will be supported by price increases and yield growth across
both Asia and Australia, supplemented by volume growth in Asia.
Yield benefits will be a function of new products, which will be
easier to roll out across both geographies once they share a common
technology platform. The platform unification project is likely to be
completed in FY24.
1
Share Price Discount 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
May 2023
Warrant Price
$
0.00
$
0.72
Share Price
DISCOUNT
1
0.2
%

as at 30 April 2023
BRM NAV
$
0.72

SECTOR SPLIT
as at 30 April 2023
KEY DETAILS
as at 30 April 2023
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
$0.71
PERFORMANCE FEE CAP
1.25%
SHARES ON ISSUE
274m
MARKET CAPITALISATION
$197m
GEARING
None (maximum permitted 20%
of gross asset value)
3
%
17
%
18
%

INDUSTRIALS
17
%
COMMUNICATION
SERVICES

HEALTH CARE
25
%
7
%
3
%

FINANCIALS
CASH &
DERIVATIVES
CONSUMER
STAPLES
4
%
Portfolio Changes
We sold our Cochlear (+6.1%) shareholding in the month on
valuation grounds. The share price had risen +37% since we first
added it to the portfolio in January 2022. Cochlear has performed
well operationally since we added it to the portfolio. Its sales and
earnings have rebounded from the pandemic, benefitting from the
reopening of hospitals across the world and also from the customer
uptake of its newest cochlear processor, the N8, and its new bone
Robbie Urquhart
Senior Portfolio Manager
Fisher Funds Management Limited
anchor unit, the Osia. We still really like the business. We believe it
has one of the strongest moats within the ASX200. However, we
think the overall risk/return opportunity is more evenly balanced now
than in January 2022.
2
6
%
CONSUMER
DISCRETIONARY
MATERIALS
INFORMATION
TECHNOLOGY

APRIL’S SIGNIFICANT RETURNS IMPACTING
THE PORTFOLIO
during the month in Australian dollar terms
FINEOS CORP
HOLDINGS
+29
%
NANOSONICS
+12
%
NEXTDC
+10
%
CARSALES.COM
+7
%
AUB GROUP
+8
%
5 LARGEST PORTFOLIO POSITIONS as at 30 April 2023
WISETECH
7
%
CSL LIMITED
9
%
CARSALES.COM
6
%
AUB GROUP
5
%
XERO
4
%
The remaining portfolio is made up of another 20 stocks and cash.
1 Month3 Months1 Year3 Years
(annualised)
5 Years
(annualised)
Company Performance
Total Shareholder Return+4.3%+4.9%(13.6%)+16.7%+15.1%
Adjusted NAV Return+4.5%+2.2%+4.9%+15.7%+11.7%
Portfolio Performance
Gross Performance Return+4.8%+3.3%+7.4%+18.3%+14.8%
Benchmark Index^+1.9%(1.2%)+2.5%+14.4%+8.6%
PERFORMANCE to 30 April 2023
3
TOTAL SHAREHOLDER RETURN to 30 April 2023
^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
Share Price/Total Shareholder Return
$3.50
$3.00
$2.50
$2.00
$1.50
$1.00
$0.50
$0.00
Oct
2006
Oct
2007
Oct
2011
Oct
2013
Oct
2014
Oct
2015
Oct
2008
Oct
2009
Oct
2010
Oct
2016
Oct
2020
Oct
2012
Oct
2022
Share Price Total Shareholder Return
Oct
2017
Oct
2018
Oct
2019

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 utilised
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 warrants is 26 May 2023