BRM – September 2023 monthly update

1
A WORD FROM THE MANAGER
In August, Barramundi’s gross performance return was up 1.7% and
the adjusted NAV return was up 1.6%. This compares to the S&P/
ASX200 Index (70% hedged into NZ$) which was down 0.5%.
Share price moves in August were significantly influenced by
‘reporting season’ with a large number of companies releasing their
full year or half year financial results.
Portfolio News
Audinate (+48% in A$) produced a very strong FY23 financial
result. Underpinned by strong customer demand and easing supply
chain restrictions, revenue grew a healthy 51% compared to FY22.
The company referenced a large number of design wins, laying the
groundwork for strong revenue and earnings growth in the future.
Audinate has also reached an inflection point in profitability which
saw operating profitability increase 150% over the prior year.
New addition to the portfolio Johns Lyng Group (+22%) grew its
core repair and restoration revenues +14% over the year, driven
by new contract wins, expansion into adjacent markets and new
geographies. The FY23 result was boosted by record revenues from
weather catastrophe related cleanup and repair work. The company’s
guidance for FY24 pointed to continued growth, supported by
good momentum in its core repair and restoration business, and
catastrophe work related to recent floods in Australia, NZ and the US.
PWR Holdings (+18%) provided a solid FY23 result with all divisions
growing revenue in the teens in percentage terms, except Aerospace
which grew +48%. Aerospace continues to be a big opportunity and
PWH are working with the leading innovators of the electric take-off
and landing vehicle (eVTOL) – essentially an EV helicopter. The eVTOL
programme, along with other ongoing Aerospace and projects for
vehicle manufacturers should provide significant growth into FY24.
Domino’s (+11%) delivered a disappointing FY23 result. Pricing
actions taken by the company to offset cost inflation proved to be
too heavy handed. This resulted in lower customer numbers, reduced
earnings (underlying NPAT down 26%) and slowing store rollout. All
this was well documented in a trading update in June. Consequently,
investors chose to focus on the healthy 6.6% same store sales
growth reported for each of the ANZ and European businesses for
the initial seven weeks of FY24. These provide some early signs that
Domino’s remediation actions are delivering results. This positive
momentum is not yet evident in Asia, where same store sales remain
off by 7.8%. The lower order frequency in Asian markets means it
will take longer for turnaround initiatives there to become visible in
sales numbers.
Brambles (+6%) reported a 14% constant currency increase in
sales for FY23. This was driven by price increases to recover higher
operating and capital costs to serve customers. Improved pricing
flowed through into an 18% constant currency increase in NPAT. For
FY24 the company expects a further 6-8% constant currency increase
in revenue, with EBIT 9-12% higher.
Fineos (-12%) FY23 result was in-line with market expectations.
However, its FY24 revenue guidance (+4.8% to +8%) was below
market expectations. Offsetting the miss on near-term revenues,
Fineos have announced several new deals in 2023, including signing
a top 10 North American insurer to take on the full Fineos admin
product suite. These contract wins should support strong revenue
growth from FY25 onwards. During the month Fineos also raised an
additional A$40m of funding to add to its Balance Sheet strength.
While Nanosonics (-11%) reported strong revenue (+38%) and
profit growth (+$16.2m to $19.9m) for FY23, the market was instead
focused on the news of another delay in the development of its
CORIS product – targeted at cleaning endoscopes. Pleasingly, North
American sales grew +41%, benefitting from growth in trophon
installations, an uptick in Trophon upgrades, and strong consumable
and service revenue growth. Disappointingly, Nanosonics has again
pushed out the timeline for the regulatory submission, and ultimately
potential launch of CORIS.
WiseTech (-19%) delivered a strong FY23 financial result, in line
with market expectations. However, it guided to FY24 revenue
growth of 27%-34%, and operating profit growth of 18%-27%.
The revenue guidance was in line with expectation, but the implied
drop in WiseTech’s profit margin disappointed the market and hence
the share price fell. WiseTech is integrating some recent acquisitions
which will weigh on the margin near-term but doesn’t detract from
its earnings power longer term. In addition to this, it has released
two new products, a series of warehouse modules, and a product
that enables companies to plan, book, track and manage their
freight within the CargoWise platform. This functionality adds to
CargoWise’s attractiveness for customers and broadens WiseTech’s
economic moat.
Resmed (-24%) produced a slightly disappointing Q4 FY23 result
relative to market expectations. Revenue was up by a very satisfactory
23% but earnings rose by only 7%. This was the result of a further
small slip in gross margin, largely due to product mix, whereas the
market had been looking for some improvement. Resmed’s share
price was also affected by the perceived impact on its business of
1
Share Price Discount to NAV (using the net asset value per share, after expenses, fees and tax, to four decimal places).
MONTHLY UPDATE
September 2023
$
0.76
Share Price
DISCOUNT
1
0.1
%

as at 31 August 2023
BRM NAV
$
0.76

SECTOR SPLIT
as at 31 August 2023
KEY DETAILS
as at 31 August 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
$0.72
PERFORMANCE FEE CAP
1.25%
SHARES ON ISSUE
276m
MARKET CAPITALISATION
$210m
GEARING
None (maximum permitted 20%
of gross asset value)
4
%
18
%
19
%

CONSUMER
DISCRETIONARY
17
%
COMMUNICATION
SERVICES

HEALTH CARE
24
%
2
%
2
%

FINANCIALS
CASH &
DERIVATIVES
CONSUMER
STAPLES
7
%
semaglutide obesity drugs, notably Ozempic and Wegovy. Obesity
and heart disease are comorbidities of obstructive sleep apnoea
(OSA). To the extent that obesity drugs can have a positive impact
on these comorbidities, they might reduce the size of Resmed’s
potential OSA market. It is early days, but our initial view is that any
impact on Resmed will be modest. There are numerous hurdles to
the widespread use of these drugs including their cost and health
insurance reimbursement. Moreover, OSA is not necessarily caused
by a weight problem. Even in the US, the world’s most developed
OSA market, less than 20% of sufferers are diagnosed and treated.
Consequently, we remain of the view that Resmed has a long growth
runway ahead of it despite any impact from obesity drugs.
Portfolio Changes
Early in the month we added Johns Lyng Group to the portfolio.
Through its network of approximately 14,000 subcontractors, Johns
Lyng provides repair and restoration work for properties damaged
by insurable events (e.g., floods and fire). It is the leading service
provider in this niche industry in Australia. In recent years it has
expanded into the US market.
Robbie Urquhart
Senior Portfolio Manager
Fisher Funds Management Limited
John’s Lyng’s national scale is a competitive advantage as it affords
it the ability to respond quickly to events, reducing the overall cost
of insurance claims which is appealing to national insurers. Allied to
this, Johns Lyng has a strong performance-based culture, with the
local management teams directly owning shares in the majority of its
130+ subsidiary businesses. The executive team also have meaningful
shareholdings in Johns Lyng, ensuring alignment with shareholders.
In recent years it has expanded into the US market, and this adds to
the long growth runway for this company.
We also increased our weighting in WiseTech, Resmed and Fineos
after their results.
2
7
%
INDUSTRIALS
MATERIALS
INFORMATION
TECHNOLOGY

AUGUST’S SIGNIFICANT RETURNS IMPACTING
THE PORTFOLIO
during the month in Australian dollar terms
AUDINATE GROUP
+48
%
JOHNS LYNG GROUP
+22
%
PWR HOLDINGS
+18
%
RESMED
-24
%
WISETECH GLOBAL
-19
%
5 LARGEST PORTFOLIO POSITIONS as at 31 August 2023
CARSALES.COM
6
%
CSL LIMITED
10
%
WISETECH
6
%
AUB GROUP
5
%
RESMED
5
%
The remaining portfolio is made up of another 21 stocks and cash.
1 Month3 Months1 Year3 Years
(annualised)
5 Years
(annualised)
Company Performance
Total Shareholder Return+4.1%+7.7%(3.2%)+10.5%+14.4%
Adjusted NAV Return+1.6%+8.1%+14.0%+11.2%+10.7%
Portfolio Performance
Gross Performance Return+1.7%+8.8%+17.4%+13.8%+13.4%
Benchmark Index^(0.5%)+4.4%+9.2%+11.0%+7.4%
PERFORMANCE to 31 August 2023
3
TOTAL SHAREHOLDER RETURN to 31 August 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 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
Oct
2021

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
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.
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
Warrants
»Warrants put Barramundi in a better position to grow
further, operate efficiently, and pursue other capital
structure initiatives as appropriate
»A warrant is the right, not the obligation, to purchase an
ordinary share in Barramundi at a fixed price on a fixed
date
»There are currently no Barramundi warrants on issue