KFL – June 2023 Quarterly Newsletter

In the June quarter, Kingfish delivered a Gross Performance Return
of 2.3% and an Adjusted NAV return of 1.9%, versus the 0.3%
return of the S&P/NZX50 gross index.
Quarterly performance was led by a recovery in the retirement
village operators Ryman (+25% shareholder return in the quarter)
and Summerset (+9%). The New Zealand housing market decline is
now long in the tooth but with migration increasing and the Reserve
Bank of New Zealand largely through its interest rate hiking cycle,
there are increasing signs we may be nearing an inflection point.
Other strong performers included Infratil (+12%), recent addition
Vulcan Steel (+12% since addition), and cinema software provider
Vista (+24%). Vista’s new CEO started during the quarter and has
experience in leading a business through a transition to software-as-
a-service. He is also planning to remove unnecessary complexity in
the business and accelerate the delivery of cash flows.
Kingfish’s healthcare investments detracted from returns during the
quarter. As we discussed last month, Fisher & Paykel Healthcare
(−7%) is taking longer than expected to restore profit margins
towards long term targets due to cost pressures. During June, EBOS
(−21%) was dealt a surprising blow after competitor Sigma bid very
aggressively to win its contract to supply Chemist Warehouse. Other
detractors included Freightways (−12%) and a2 Milk (−14%). a2
continues to take market share and received regulatory approval for
its reformulated product range, but China’s infant formula market is
being impacted by a lower number of births.
We continue to see economically exposed companies struggle,
with both the earnings and share prices of those companies coming
under pressure. Example of those domestically focussed consumer-
facing companies that Kingfish does not own include the likes of My
Food Bag, Briscoes and Kathmandu. While the likes of Mainfreight
(+3% in the quarter) and Freightways (−12%) are less exposed to
the changes in consumer spending, they are nevertheless seeing
their performance muted by subdued freight volumes and cost
pressures.
For these reasons, we have selectively taken the opportunity to
increase defensive positions where the valuation is attractive, such
as participating in the Infratil equity raising in June as discussed
below. We are also on the lookout for opportunities to add quality
cyclical investments with attractive longer-term growth prospects that
have been sold off, such as Vulcan, although remain cautious given
the tricky economic landscape.
Infratil has increased its ownership of One NZ
Infratil thinks of its infrastructure portfolio as ‘ideas that matter’
and has focused on being early to identify structural growth
opportunities. One such area is connectivity and data.
During May, Infratil purchased the half of One NZ (formerly
Vodafone NZ) it didn’t already own from its partner Brookfield for
$1.8 billion. This gives it full control of the company, increasing
cash flows available for dividends and redeploying into growth
opportunities at its other portfolio companies.
One NZ is towards the lower risk end of the risk spectrum as a result
of its stable demand and strong cash flows. One NZ is now taking
market share in mobile, the most valuable part of the business. Its
management team have done well to increase profit margins since
Infratil’s initial investment. However, as with all Infratil investments
there are hidden opportunities for higher returns. Management have
aspirations to continue to further grow margins towards best-in-class
levels from optimising mobile pricing and further efficiency gains.
Infratil raised $935 million of new equity to help pay for the
acquisition. We participated and increased Kingfish’s position size
as a result of the logical acquisition and attractive discount on offer
(shares were issued at $9.20 versus the prior price of just over
$10).

EBOS maintains an attractive outlook, despite a setback
EBOS was dealt a surprising blow in June after competitor Sigma
announced it had won the Chemist Warehouse pharmaceutical and
FMCG supply contracts for Australia, commencing mid-2024. EBOS
currently holds the pharmaceutical contract, which generates A$1.9
billion in revenue annually, although at a low profit margin.
We thought that the most likely outcome of the retender was that
Chemist Warehouse would retain the status quo of EBOS and
Sigma as dual suppliers, although we expected EBOS would
likely need to slightly improve pricing. As it transpired, Sigma bid
very aggressively for the contract, issuing new shares to Chemist
Warehouse to hand it around an 11% shareholding and gifting
A$24.5 million in assets. These combined equate to roughly five
years of earnings generated from the revised Chemist Warehouse
contract.
While this is a disappointing outcome and will result in a dip
in earnings in the 2025 financial year, we still think EBOS is
positioned for growth over time. Its animal care business continues
to grow, and it has grown its healthcare business into medical
devices and contract logistics, so the company has several growth
avenues outside of its community pharmacy division. While
early days, we expect competitive pressure within the community
pharmacy wholesale market to improve as Sigma no longer has
capacity sitting idle. We expect EBOS’s TerryWhite Chemmart will
continue to take market share, as the leading trusted advice-based
pharmacy chain in Australia.
1
Share price discount to NAV (using the net asset value per share, after expense, fees and tax, to four decimal places).
QUARTERLY NEWSLETTER
1 April 2023 – 30 June 2023
KFL NAV
$
1. 4 0
$
1. 3 4
Share Price
DISCOUNT
1
4.0
%

as at 30 June 2023
Matt Peek
Portfolio Manager
Fisher Funds Management Limited
17 July 2023
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+3.8%+2.7%+9.3%
Adjusted NAV Return+1.9%+3.3%+8.0%
Portfolio Performance
Gross Performance Return +2.3%+4.7%+10.3%
S&P/NZX50G Index+0.3%+1.3%+5.9%

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 percentage change in the adjusted NAV value,
»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 Airport8.4%
Contact Energy4.2%
Delegat Group2.3%
EBOS Group4.0%
Fisher & Paykel Healthcare13.3%
Freightways3.0%
Infratil17.1%
Mainfreight17.3%
Meridian Energy2.0%
Port of Tauranga2.4%
Ryman Healthcare4.4%
Summerset8.8%
The a2 Milk Company4.0%
Vista Group International3.8%
Vulcan Steel1.2%
Equity Total96.2%
New Zealand dollar cash3.8%
TOTAL100.0%
PORTFOLIO HOLDINGS SUMMARY
as at 30 June 2023
COMPANY NEWS
Dividend Paid 23 June 2023
A dividend of 2.82 cents per share was paid to Kingfish shareholders on 23 June 2023 under the quarterly distribution policy. Interest in Kingfish’s
dividend reinvestment plan (DRP) remains high with 40% 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 June 2023
Kingfish Limited
Private Bag 93502, Takapuna, Auckland 0740, New Zealand
Phone: +64 9 489 7094
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
RYMAN
HEALTHCARE
+25
%
VISTA GROUP
+24
%
VULCAN STEEL
+12
%
THE A2 MILK
COMPANY
-14
%
EBOS
GROUP
- 21
%
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. If shareholders have not previously self-certified, they will receive 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.