BRM – December 2023 monthly update

1
A WORD FROM THE MANAGER
In a pleasing reversal of the previous month November saw
Barramundi’s gross performance return rebound 7.9% and the
adjusted NAV return was up 7.5%. This compares to the S&P/
ASX200 Index (70% hedged into NZ$) which rose 4.6% over the
month.
Similarly, the market saw a reversal of performance at a sector level,
with Healthcare (+11.7%) and Information Technology (+7.3%)
two of the laggards in October, being some of the best performing
sectors in November. Energy (-7.4%) and Utilities (-6%) in contrast,
lagged the market.
Portfolio News
James Hardie (+24.6%) reported Q2 FY24 financial results that
were in line with market expectations. However, the share price rose
strongly on the company’s guidance for Q3 which was materially
above market expectations (driven by strength in its key North
American division). Although sales volumes are softer than in the
prior year, James Hardie is strongly outperforming the broader
building products market in the US. It has increased its selling
prices, and seen input costs fall. This has translated into record
profit margins and strong cash generation for the company, which
in turn has bolstered its balance sheet strength. The company is
well positioned to benefit from any improvement in the housing
construction (and renovation) markets in the US and its Asia Pacific
markets.
WiseTech’s (+14.9%) share price rebounded after a soft couple of
months. The company reiterated its FY24 earnings guidance at its
AGM during the month. We met with management, and although
global trade is softening, this is in line with its expectations when
it set its earnings guidance at its full year results in August. The
team remains focussed on expanding the functionality of its core
CargoWise software to encompass key segments of the global
freight supply chain. This includes expanding the reach of CargoWise
to encompass global customs, warehouse and landside logistics
modules. If successful in this endeavour, WiseTech will noticeably
broaden its economic moat and its addressable market, thereby
expanding its runway for earnings growth in the future.
PEXA (+10.2%) hosted a strategy day which was taken well by the
market. In Australia property sale volumes recovered during the
Spring sales season, having troughed in the March’23 quarter. In the
UK PEXA will launch its much-anticipated PEXA re-mortgage platform
in April / May 2024. The new platform will significantly reduce the
time to re-mortgage from weeks to 24-48 hours. It has confirmed
two top ten UK lenders have verbally agreed to use the new PEXA
platform for re-mortgages. PEXA also provided an update on its
Productivity Enhancement Program. PEXA will make approximately
12% of the global workforce redundant, generating $8-10m of
annualised cash savings.
Like PEXA, REA Group (+8%) also benefited from the recovery in
the Australian housing market. In October national new property
listings grew +17% compared to September (and were +16% higher
than October 2022). This has been led by Sydney and Melbourne
where listings were +32% higher than October 2022. During the
month REA hosted a strategy day in India where it talked through its
strategy to remain the number #1 real estate platform in the large
and growing Indian property market. It’s still early in the digitalization
of the Indian property market. Nevertheless, we are encouraged
by the progress made by REA India, having grown revenues 4.5x
between FY21 and FY23.
Domino’s (+5.9%) AGM at the beginning of November included a
constructive trading update for the first 16 weeks of FY24. Group
same store sales (“SSS”) for the period were positive, rising +2.7%,
with total network sales +12.7% (boosted by last year’s Asian
acquisitions). Australia and New Zealand (ANZ) is the region most
advanced in benefiting from Domino’s revised pricing and marketing
strategies. Pleasingly, ANZ SSS were +7.0%. Europe is also making
progress, with SSS +3.8%. Customer purchase frequency is lower in
Asia, so it is taking longer for positive momentum to develop and SSS
remain negative -6.8%. Domino’s business improvement programme
is on track, and it continues to expect earnings to be materially
higher than last year due to its strategic initiatives.
PWR (+1.6%) announced that it had withdrawn from commercial
negotiations with a European customer. PWR had been working with
the customer for two years to develop battery cold plates for a high-
volume electric vehicle program. However, in the end PWR could not
agree commercial terms with the customer that were acceptable to
PWR. While we are disappointed the contract fell through, PWR has
shown good discipline in withdrawing from a contract that would
have been done on unfavourable terms. PWR has numerous other
potential programs that are at different stages of negotiation with
various customers. We expect these contracts to underpin earnings
growth in years to come.
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
December 2023
$
0.65
Share Price
as at 30 November 2023
DISCOUNT
1
4.7
%

BRM NAV
$
0.69
$
0.04
Warrant Price

SECTOR SPLIT
as at 30 November 2023
KEY DETAILS
as at 30 November 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
278m
MARKET CAPITALISATION
$181m
GEARING
None (maximum permitted 20%
of gross asset value)
3
%
19
%
19
%

CONSUMER
DISCRETIONARY
18
%
COMMUNICATION
SERVICES

HEALTH CARE
23
%
3
%
2
%

FINANCIALS
CASH &
DERIVATIVES
CONSUMER
STAPLES
6
%
Xero’s share price fell -3.4% after a compositionally softer 1H
FY24 earnings result. The headline subscriber growth rate of 13%
in the first half of the year reflected robust growth in Australia and
New Zealand, offset by slower growth in the UK and the US. Part
of this reflects the fact that Xero is more focussed than it has been
historically on the quality of new subscriber additions, not only on
the overall quantity of subscribers. Management also pointed out
that the postponement of the next ‘making tax digital’ regulations
in the UK also removed a catalyst for businesses to adopt software
products like Xero. Overall, Xero continues to grow its revenue
robustly. The company also reiterated its guidance that operating
costs will total 75% of revenue in FY24. This is substantially lower
than what costs have been as a proportion of revenue historically.
This indicates that Xero is still very focussed on controlling its
cost base which should bode well for continued growth in cash
generation in future periods.
Robbie Urquhart
Senior Portfolio Manager
Fisher Funds Management Limited
Portfolio Changes
During the month we trimmed both our REA and James Hardie
positions on valuation grounds following recent share price strength.
2
6
%
INDUSTRIALS
MATERIALS
INFORMATION
TECHNOLOGY
1
%
REAL ESTATE

NOVEMBER’S SIGNIFICANT RETURNS IMPACTING
THE PORTFOLIO
during the month in Australian dollar terms
JAMES HARDIE
INDUSTRIES
+25
%
AUDINATE
+20
%
NANOSONICS
+16
%
WISETECH GLOBAL
+15
%
SEEK
+16
%
5 LARGEST PORTFOLIO POSITIONS as at 30 November 2023
WISETECH
7
%
CSL LIMITED
11
%
SEEK
6
%
CARSALES.COM
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(5.2%)(11.4%)+0.6%(4.7%)+12.1%
Adjusted NAV Return+7.5%(5.2%)+8.2%+6.4%+12.5%
Portfolio Performance
Gross Performance Return+7.9%(4.4%)+11.0%+8.4%+15.3%
Benchmark Index^+4.6%(2.0%)+2.3%+7.9%+9.2%
PERFORMANCE to 30 November 2023
3
TOTAL SHAREHOLDER RETURN to 30 November 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
Oct
2023

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 an issue of warrants (BRMWH)
on 9 October 2023
»Information pertaining to the warrants was mailed/
emailed to all shareholders on Tuesday 17 October 2023
»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 25
October 2023
»The warrants were allotted to shareholders on 26
October 2023 and listed on the NZX Main Board from
27 October 2023
»The Exercise Price of each warrant is $0.69, 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 25 October 2024