Challenging year for Kingfish

Kingfish Limited results announcement


Results for announcement to the market
Name of issuer Kingfish Limited
Reporting Period 12 months to 31 March 2023
Previous Reporting Period 12 months to 31 March 2022
Currency NZ$
Amount (000s) Percentage change
Loss from continuing
operations
($14,671) -38%
Total revenue loss ($14,671) -38%
Net (loss) from continuing
operations
($19,469) -12%
Total net (loss) ($19,469) -12%
Interim/Final Dividend
Amount per Quoted Equity
Security
$NZ 2.82 cents per share
Imputed amount per Quoted
Equity Security
$NZ 0.00094588
Record Date 8 June 2023
Dividend Payment Date 23 June 2023
Current period Prior comparable period
Net tangible assets per
Quoted Equity Security
$1.40 $1.58
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@kingfish.co.nz
Date of release through MAP

22 May 2023
Audited financial statements accompany this announcement.

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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 net asset value return – the net return of the portfolio adjusted for dividends (and other capital management
initiatives), and after expenses, fees and tax.
3
Dividend return - is the dividends paid for the period over the average share price for the period.

4
Gross performance return – The Manager’s portfolio performance in terms of stock selection, before expenses, fees and
tax.
5
The fulcrum fee - The management fee reduces by 0.10% for each 1.0% per annum that the gross return (expressed as a
percentage of the gross asset value at the beginning of the financial year) achieved on the portfolio during the financial
year is less than the change in the S&P/NZX Bank Bills 90 Day Index over the same period, but subject to a minimum
management fee of 0.75% of the average gross asset value for that period.


For immediate release:

22 May 2023

Challenging year for Kingfish
• Net loss after tax for year ended 31 March 2022 ($19.5m)
• Total shareholder return
1
(-18.8%)
• Adjusted NAV return (after expenses, fees and tax)
2
(-3.6%)


• Dividend return
3
+7.7% (11.64cps)

NZX-listed investment company Kingfish Limited (NZX: KFL) today announced an after-tax net
operating loss of $19.5m for the year ended 31 March 2023.
Shareholders will be aware of the challenges experienced by listed equities and the Kingfish portfolio
has not been immune to those pressures, recording a loss for the year.
Concerns from post-Covid inflation, rising interest rates, supply chain disruption, coupled with
international uncertainty relating to the ongoing war between Russian and the Ukraine have
combined to negatively impact the value of the Kingfish portfolio stocks during the period.
The portfolio’s Adjusted NAV return of -3.6% (-2.7% gross performance
4
) was broadly in line with
the S&P/NZX50G benchmark which was down -1.9% for the 12 month period.
Total shareholder return
1
for the 12-month period was -18.8%, largely driven by the fall in the share
price, which moved from an 11% premium to net asset value, to a 6% discount to net asset value
over the course of the year.
The lower return delivered by the portfolio activated the management fee rebate (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 directors recognise that the regularity of the tax-effective quarterly dividends are important for
many shareholders. In accordance with Kingfish’s quarterly distribution policy (2.0% of average NAV
per quarter), the company paid a total of 11.64 cents per share to shareholders during the year

ended 31 March 2023. On 22 May 2023, the board declared a dividend of 2.82 cents per share,
payable on 23 June 2023 with a record date of 8 June.
Chair Andy Coupe said “Investors have experienced another tough year, with markets being driven
by a myriad of factors. However, the directors are encouraged that, despite the difficult
environment for listed equities, the majority of the companies within the Kingfish portfolio are
delivering solid earnings. This underlying business performance allows us to remain confident in the
investment strategy and the medium to longer-term resilience of the portfolio.”
Portfolio Manager Matt Peek noted that “After a tough first half of the financial year, the Kingfish
portfolio recovered most of the lost ground, with a gross performance return of +7.1% and Adjusted
NAV return of +6.5% in the second half. Over the 2023 financial year the market environment has
been challenging. Rising interest rates and concerns over economic activity have seen defensive
companies favoured overgrowth companies, which have been key to Kingfish's historical track
record of strong performance. Kingfish has performed creditably against this backdrop and its
portfolio is well placed moving forward.”



For further information please contact:

Corporate Manager
Kingfish Limited
Tel: (09) 484 0352







Non-GAAP Financial Information
The adjusted net asset value, gross performance return and total shareholder return methodologies are described in the
Kingfish Non-GAAP Financial Information policy. A copy of the policy is available at http://www.kingfish.co.nz/about-
kingfish/kingfish-policies/.


About Kingfish
Kingfish is a listed investment company that invests in growing New Zealand companies. The Kingfish portfolio is managed
by Fisher Funds, a specialist investment manager with a track record of successfully investing in growth company shares.
The aim of Kingfish 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. Kingfish listed on the NZX Main Board
on 31 March 2004 and may invest in companies that are listed on the NZX Main Board, NZX Alternative Market or unlisted
companies. /Ends

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Independentauditor’sreport
TotheshareholdersofKingfishLimited
Ouropinion
Inouropinion,theaccompanyingfinancialstatementsofKingfishLimited(theCompany)present
fairly,inallmaterialrespects,thefinancialpositionoftheCompanyasat31March2023,itsfinancial
performanceanditscashflowsfortheyearthenendedinaccordancewithNewZealandEquivalents
toInternationalFinancialReportingStandards(NZIFRS)andInternationalFinancialReporting
Standards(IFRS).
Whatwehaveaudited
Thefinancialstatementscomprise:
●thestatementoffinancialpositionasat31March2023;
●thestatementofcomprehensiveincomefortheyearthenended;
●thestatementofchangesinequityfortheyearthenended;
●thestatementofcashflowsfortheyearthenended;and
●thenotestothefinancialstatements,whichincludesignificantaccountingpoliciesandother
explanatoryinformation.

Basisforopinion
WeconductedourauditinaccordancewithInternationalStandardsonAuditing(NewZealand)(ISAs
(NZ))andInternationalStandardsonAuditing(ISAs).Ourresponsibilitiesunderthosestandardsare
furtherdescribedintheAuditor’sresponsibilitiesfortheauditofthefinancialstatementssectionofour
report.
Webelievethattheauditevidencewehaveobtainedissufficientandappropriatetoprovideabasis
forouropinion.
Independence
WeareindependentoftheCompanyinaccordancewithProfessionalandEthicalStandard1
InternationalCodeofEthicsforAssurancePractitioners(includingInternationalIndependence
Standards)(NewZealand)(PES1)issuedbytheNewZealandAuditingandAssuranceStandards
BoardandtheInternationalCodeofEthicsforProfessionalAccountants(includingInternational
IndependenceStandards)issuedbytheInternationalEthicsStandardsBoardforAccountants(IESBA
Code),andwehavefulfilledourotherethicalresponsibilitiesinaccordancewiththeserequirements.
Otherthaninourcapacityasauditorwehavenorelationshipwith,orinterestsin,theCompany.
Keyauditmatter
Keyauditmattersarethosemattersthat,inourprofessionaljudgement,wereofmostsignificancein
ourauditofthefinancialstatementsofthecurrentyear.GiventhenatureoftheCompany,wehave
onekeyauditmatter:Valuationandexistenceofinvestmentsatfairvaluethroughprofitorloss.The
matterwasaddressedinthecontextofourauditofthefinancialstatementsasawhole,andinforming
ouropinionthereon,andwedonotprovideaseparateopiniononthematter.
PricewaterhouseCoopers,PwCTower,15CustomsStreetWest,PrivateBag92162,Auckland1142NewZealand
T:+6493558000,www.pwc.co.nz

Description of the key audit matterHow our audit addressed the key audit matter
Valuation and existence of investments
at fair value through profit or loss
Investments at fair value through profit or
loss (investments) are valued at $453
million and represent 98% of total assets.
Further disclosures on the investments are
included in note 2 to the financial
statements.
Due to the size of investments this was an
area of focus for our audit and an area
where a significant proportion of audit effort
was directed.
As at 31 March 2023, all investments were
in companies that were listed on the NZX
Main Board and were actively traded with
readily available, quoted market prices.
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 legal owner of all
investments recorded as at 31 March 2023.
We obtained copies of the Trustees Executors
Limited’s Internal Controls Reports for Custody,
Superannuation Member Administration, Investment
Administration and Registry for the period from 1
April 2022 to 31 March 2023 and assessed the
impact of any exceptions on the Company’s financial
statements.
We agreed the price for all investments held at 31
March 2023 to independent third-party pricing
sources without exception.
Our audit approach
Overview
MaterialityOverall materiality: $2,307,000, which represents 0.5% of net assets.
We used this 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 matterAs reported above, we have one key audit matter, being:
● Valuation and existence of investments at fair value through
profit or loss.
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.
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.
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16

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
17

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 AccountantsAuckland
22 May 2023
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