KFL – September 2024 monthly update

1
A WORD FROM THE MANAGER
The Kingfish portfolio gross performance return and Adjusted
NAV return in August were +3.2% and +3.1% respectively, versus
the S&P/NZX 50 gross index return of +0.3%. It was a busy month
for the Kingfish portfolio with a number of companies reporting
results or providing trading updates.
Auckland Airport (+1%) reported earnings for its 2024 financial
year, in line with expectations. Management expects 4%
passenger growth in the coming year, in part due to aircraft
availability constraints and demand growth slowing after the
post-Covid rebound. Retail spend per passenger is showing
improvement, which is welcome as Auckland Airport begins the
tender process for its next retail contract.
a2 Milk (-23%) delivered revenue and profit in line with
expectations, however guidance for mid-single digit revenue
growth and flat profit margins for the coming financial year fell
short of expectations. The company called out supply chain
issues which means it needs to air-freight stock into the US
market at a significant additional cost ($10 million) with an
impact on sales too. The company also pushed out profitability
targets for both its US business and Mataura Valley Milk
processing facility. These unexpected negatives detracted from
what has been ongoing strong in-market execution from the
company in the China infant formula market.
Delegat (+9%) delivered 2024 financial year net operating profit
of $60 million and provided guidance for the year ahead of $55-
60 million. This was much better than expected, following its
announcement in May that its 2024 harvest was down 25% on
the prior year. The company has been re-examining its costs after
a period of elevated inflation and plans to raise prices further to
help restore lost profit margin.
EBOS (-1%) delivered a solid 2024 financial year result and
uncharacteristically provided guidance for the new year, given
the discontinuation of its A$2.2 billion contract with Chemist
Warehouse. The Community Pharmacy and Institutional
Healthcare divisions continue to perform strongly, benefiting from
attractive market growth tailwinds and market share gains. EBOS
is benefiting from the changing competitor landscape, gaining
roughly A$100 million of new wholesale pharmacy customer
business over the last year, plus is targeting an additional A$300
million from new customer wins in the coming year. It has also
maintained its A$25-50 million target for cost reduction initiatives,
which will help offset the lost earnings from the Chemist
Warehouse contract.
Fisher & Paykel Healthcare (+10%) provided strong revenue and
net profit guidance for the first half of its 2025 financial year and
increased its full year profit outlook. The year has started strongly
across all products and regions. In the Hospital division, the key
contributors included ongoing change in clinical practice in favour
of the company’s therapies, a good response to new product
innovations, and relatively high respiratory hospitalisations. In its
Homecare division, its new OSA (obstructive sleep apnea) masks
continue to sell well. The company is also seeing gross margin
improvements as it returns to its programme of working on
efficiency and continuous improvement activities.
Meridian (-2%) delivered its 2024 financial year result under
increased scrutiny, given the concern around current New
Zealand electricity market dynamics, a byproduct of a historically
significant lack of rain and unexpected gas shortages. This has
seen wholesale electricity prices spike to high levels for spot
market customers, although the way the electricity system
works in New Zealand means residential customers and most
commercial and industrial customers are insulated as they
purchase at fixed prices, with only certain customers electing to
take spot-market price risk. The Meridian team highlighted that
the industry has adapted rapidly in the current situation, with
Meridian's recently negotiated 'demand response' arrangement
with the Tiwai Point aluminium smelter seeing 185 megawatts
of electricity returned to the system, plus another 20 megawatts
it has negotiated on a one-off basis. Meridian noted it has also
acquired 800 gigawatt hours of hedges at an $258 per megawatt
hour price (from the likes of Genesis's coal-fired Huntly power
station). At face value this means it would be spending over $200
million to plug the hole in its 1,000-gigawatt hour hydro deficit, the
cost to the business of mother nature not filling its hydro lakes
so far this winter. Although it is likely the new 2025 fiscal year
will therefore fall short of prior expectations, Meridian remains
well placed as the system returns to normal when it rains again.
It is also well positioned to spend over $3 billion by 2030 to build
out its pipeline of wind, solar, and battery projects to meet New
Zealand's increasing demand for electricity over the coming
years.
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 2024
KFL NAV
$
1.42
$
1.31
Share Price
DISCOUNT
1
8.1
%
as at 31 August 2024

2
KEY DETAILS
as at 31 August 2024
FUND TYPE
Listed Investment Company
INVESTS IN
Growing New Zealand
companies
LISTING DATE
31 March 2004
FINANCIAL YEAR END
31 March
TYPICAL PORTFOLIO SIZE
15-25 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
$1.33
PERFORMANCE FEE CAP
1.25%
SHARES ON ISSUE
342m
MARKET CAPITALISATION
$448m
GEARING
None (maximum permitted 20%
of gross asset value)
SECTOR SPLIT
as at 31 August 2024
Matt Peek
Portfolio Manager
Fisher Funds Management Limited
Summerset (+2%) delivered its first half 2024 result in line
with expectations, having provided a sales update and interim
underlying profit guidance in July. Despite trading conditions
remaining tough Summerset continues to hit new records for
its total sales. New financial disclosures highlighted stronger
earnings from its village operations but even weaker care
earnings than we anticipated, with care running at a loss.
Unfortunately for the sector and wider New Zealand health
system, funding support has lagged cost growth, meaning
Summerset and others are scaling back their care offering to
cater primarily to existing residents and those willing to pay
for premium care suites. Summerset’s solid development
performance means it continues to deliver positive cash flow
from developments and announced it has purchased another site
in the Hawkes Bay.
Vista (+24%) reported the first half result for its 2024 financial
year, with revenue impacted by the 19% weaker US box office as a
result of the 2023 writers' and actors' strikes. This has delayed the
release of certain movies in the 'film slate', with Vista's box-office
exposed divisions feeling the impact. Positively, the company has
been able to manage its cost base well following its late 2023
'transformation' which included reducing headcount by 8% and
its focus on operating more cost-efficiently. This has led to the
company clarifying it expects its core operating profit margin
to be 13-14% for the year (versus expectations of around 12%).
The company has become increasingly confident of achieving its
targets in terms of Cloud and Digital customers live by the end
of 2024 and is sticking by its aspiration of at least $175 million
annualised recurring revenue by the end of 2025.
1
%
25
%
8
%
CASH
INDUSTRIALS
6
%

UTILITIES
MATERIALS
3
%
CONSUMER
STAPLES
4
%
37
%
HEALTHCARE
INFORMATION
TECHNOLOGY
16
%

FINANCIALS

33
TOTAL SHAREHOLDER RETURN to 31 August 2024
AUGUST'S SIGNIFICANT RETURNS IMPACTING
THE PORTFOLIO
during the month
The remaining portfolio is made up of another 10 stocks and cash.
5 LARGEST PORTFOLIO POSITIONS as at 31 August 2024
VISTA GROUP
+24
%
FISHER & PAYKEL
HEALTHCARE
+10
%
DELEGAT GROUP
+9
%
RYMAN HEALTHCARE
+7
%
a2 MILK COMPANY
-23
%
FISHER & PAYKEL
HEALTHCARE
19
%
MAINFREIGHT
16
%
AUCKLAND
INTERNATIONAL
AIRPORT
11
%
INFRATIL
8
%
SUMMERSET
8
%
Share Price/Total Shareholder Return
$9.00
$8.00
$7.00
$6.00
$5.00
$4.00
$3.00
$2.00
$1.00
$0.00
Mar
2004
Share Price Total Shareholder Return
Mar
2005
Mar
2006
Mar
2007
Mar
2008
Mar
2009
Mar
2010
Mar
2011
Mar
2012
Mar
2013
Mar
2014
Mar
2015
Mar
2016
Mar
2017
Mar
2018
Mar
2020
Mar
2019
Mar
2021
Mar
2023
Mar
2022
Mar
2024
1 Month3 Months1 Year3 Years
(annualised)
5 Years
(annualised)
Company Performance
Total Shareholder Return+0.8%+10.6%+9.0%(6.3%)+7.6%
Adjusted NAV Return+3.1%+9.3%+14.8%(0.9%)+7.4%
Portfolio Performance
Gross Performance Return+3.2%+9.7%+16.9%+0.4%+9.3%
S&P/NZX50G Index+0.3%+4.9%+7.7%(2.0%)+3.0%
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 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, 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 Kingfish Non-GAAP Financial Information Policy. A copy of the policy is available at kingfish.co.nz/about-kingfish/kingfish-policies.
PERFORMANCE as at 31 August 2024

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 Kingfish 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 Kingfish Limited or its portfolio companies, please note that fund
performance can and will vary and that future results June have no correlation with results historically achieved.
Kingfish Limited
Private Bag 93502, Takapuna, Auckland 0740
Phone: +64 9 489 7094
Email: enquire@kingfish.co.nz | www.kingfish.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 KINGFISH
Kingfish 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
15 and 25 quality growing New
Zealand companies through a
single, professionally managed
investment. The aim of Kingfish
is to offer investors competitive
returns through capital growth
and dividends.
CAPITAL MANAGEMENT STRATEGIES
Regular Dividends
»Quarterly distribution policy introduced in June 2009
»Under this policy, 2% of average NAV is targeted to be
paid to shareholders quarterly
»Dividends paid by Kingfish 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
»Kingfish 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
»Kingfish 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. Kingfish’s
portfolio is managed by Fisher
Funds Management Limited. Matt
Peek (Portfolio Manager) and
Michael Bacon and Zoie Regan
(Senior Investment Analysts) have
prime responsibility for managing
the Kingfish portfolio. Together
they have significant combined
experience and are very capable
of researching and investing in the
quality New Zealand companies
that Kingfish targets. Fisher Funds
is based in Takapuna, Auckland.
BOARD
The Board of Kingfish
comprises independent
directors Andy Coupe (Chair),
Carol Campbell, David
McClatchy and Fiona Oliver.
Warrants
»Warrants put Kingfish 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 Kingfish at a fixed price on a fixed date
»There are currently no Kingfish warrants on issue