BRM – March 2024 monthly update

1
A WORD FROM THE MANAGER
Barramundi’s gross performance return for February was +5.2% and the
adjusted NAV return was up 4.6%. This compares to the S&P/ASX200
Index (70% hedged into NZ$) which rose 0.7% over the month.
Performance across our portfolio was driven largely by financial updates
and an investor day at Xero. A number of our larger portfolio holdings
delivered strong financial results which helped our outperformance.
Portfolio News
Wisetech (+29% in A$) delivered a strong 1H24 result, with revenue
up 32% on 1H23, and pre-tax operating profit up 17%, reflecting
the integration of some (lower margin) acquisitions. Importantly, the
underlying business continues to gain in strength, with signs that its
economic moat is widening. This bodes well for the future. Wisetech
added Sinotrans to its list of global software rollouts, meaning it now
counts 13 of the top 25 global freight forwarders as key customers. This
is good progress, with plenty of opportunity left to grow its customer
base. In addition, a couple of new smaller customers also signed on for
global rollouts of the cargowise software product. Wisetech’s customs
product has also seen further uptake across its customer base. The
integration of businesses acquired last year is progressing well, leading
to better profit margin guidance than the market feared. In all, there was
little to complain about with this result.
NextDC (+26%) provided a strong set of results, with revenue growth of
+31% supported by previously announced large contract wins and higher
price increases during the year. NextDC is benefitting from the structural
growth in data consumption and data storage. In the last twelve months
NextDC has signed additional deals with leading cloud computing
platforms and grown its contract book by +76%. The demand for data
storage capacity such as that which NextDC provides is set to benefit
from ongoing cloud computing as well as increasing AI requirements for
the foreseeable future.
Despite a soft advertising market, oOh!Media (+18%) delivered a
7% increase in revenue for 2023. This reflected both the out of home
(“OOH”) advertising segment’s ongoing structural market share gains
from more traditional media and the sector’s recovery from the impact
of Covid-19 on OOH audiences. For the year ahead the OOH segment is
expected to grow at mid to high single digits.
PWR Engineering’s (+18%) result showed evidence of strong demand
for its emerging technologies, particularly in its motorsport (revenues
increased +19% on the prior period) and aerospace (revenue increased
+124%) divisions. Both these markets are at the cutting end of
technology and provide room for further growth. To this end, PWR again
grew its pipeline of future work, by number and size of contracts.
Domino’s (+15%) delivered most of the bad news about its December
half year in a January trading update. Consequently, with the result
itself, the focus was mainly on whether there was any devil in the detail.
Happily, there wasn’t. Pre-tax profit for the half was $89.6m, -15% on
last year but at the top end of guidance given in the update. At a group
level, same store sales (“SSS”) performance for the first seven weeks
of the second half was somewhat better than for the first half, +3.0%
versus +1.3%. Regionally, ANZ continued to strengthen (+8.4% vs
+8.2%) and there was a marked turnaround in Asia (+0.3% vs -8.9%).
Here, a strong recent performance from Japan (+6.7%) offset ongoing
weakness in Taiwan and Malaysia. Japan is cycling a soft comparable
period, but its recent SSS result does provide tentative evidence that
Domino’s successful ANZ sales rejuvenation strategies are starting to gain
traction elsewhere. Within Europe, Germany SSS growth for the latest
seven weeks was +6.1%. This suggests SSS in France are running at
around -6%. Dominos has some work to do to turn France around.
Xero (+15%) held its (well received) inaugural investor day a year after
CEO Sukhinder Singh Cassidy began with the company. Participants were
treated to presentations from a range of Xero’s senior leadership, many
of whom, like the CEO, have started in the last year. A theme from the
day was the clarity of focus the team has for the next few years. Xero
is focussed on targeting three areas (core accounting, payments and
payroll solutions) in three key growth markets (US, UK and Australia) for
a primary customer base of businesses with 1-20 employees. There was
a consistency of message behind these focus areas from all presenters
on the day. In particular, Xero’s new head of product, Diya Jolly outlined
significant progress the developer team has made in the US in the past
year, with the velocity of new product enhancements rising sharply. This
includes Xero’s AI based tool nicknamed JAX (Just Ask Xero) which looks
set to significantly improve productivity for Xero customers when it is
released after its testing phase. Xero won’t lose sight of core, smaller
markets such as NZ, South Africa and Canada. But it will be disciplined
in how it allocates its resources. It will very clearly not attempt being all
things to all people.
CAR Group (+11%) backed up its strong share price performance in
the last year, with a credible financial result (constant currency revenue
and operating profit growth of +15% and +16% respectively). All key
geographies (Australia, South Korea, the US and Brazil) contributed to
this growth, with evidence that CAR’s management team is successfully
exporting new product initiatives that enhance growth in one geography,
into other geographies. This enhances the flywheel of growth for the
company while also giving the market more comfort that its earnings
base is more resilient than it was five or ten years ago.
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
March 2024
$
0.74
Share Price
as at 29 February 2024
DISCOUNT
1
4.8
%

BRM NAV
$
0.80
$
0.09
Warrant Price

SECTOR SPLIT
as at 29 February 2024
KEY DETAILS
as at 29 February 2024
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
$0.69
PERFORMANCE FEE CAP
1.25%
SHARES ON ISSUE
280m
MARKET CAPITALISATION
$207m
GEARING
None (maximum permitted 20%
of gross asset value)
6
%
17
%
20
%

CONSUMER
DISCRETIONARY
16
%
COMMUNICATION
SERVICES
23
%
2
%
3
%

FINANCIALS
CONSUMER
STAPLES
MATERIALS
6
%
Fineos’s (-19%) disappointing results showed revenue that was flat
for the six months ended December (below market expectations). This
led management to downgrade its revenue guidance for the following
twelve months. Revenue was impacted by further churn of customers
in its Limelight business and three customers delaying their upgrade
from Fineos’ on-premise solution to its Cloud solution. The performance
of the Limelight business since Fineos acquired it in 2020 has been
disappointing, and Fineos has had to comprehensively overhaul the
Limelight software. Encouragingly, the technology overhaul is largely
complete and Fineos is marketing the product again with positive early
feedback from the market.
Robbie Urquhart
Senior Portfolio Manager
Fisher Funds Management Limited
Portfolio Changes
During the month we increased our target weighting in Johns Lyng after
its share price fell. Conversely, we reduced our weighting in Seek and REA
Group (on valuation grounds).
2
7
%
INDUSTRIALS
CASH &
DERIVATIVES
INFORMATION
TECHNOLOGY

HEALTH CARE

FEBRUARY’S SIGNIFICANT RETURNS IMPACTING
THE PORTFOLIO
during the month in Australian dollar terms
AUDINATE
+40
%
WISETECH
+29
%
NEXTDC
+26
%
FINEOS CORP
-19
%
PWR HOLDINGS
+18
%
5 LARGEST PORTFOLIO POSITIONS as at 29 February 2024
WISETECH
8
%
CSL LIMITED
10
%
CAR GROUP
5
%
XERO
5
%
AUB GROUP
5
%
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+3.0%+18.0%+8.7%+0.2%+16.1%
Adjusted NAV Return+4.6%+15.5%+22.5%+10.9%+14.6%
Portfolio Performance
Gross Performance Return+5.2%+16.5%+26.4%+13.3%+17.5%
Benchmark Index^+0.7%+9.4%+10.9%+9.9%+9.2%
PERFORMANCE to 29 February 2024
3
TOTAL SHAREHOLDER RETURN to 29 February 2024
^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