BRM – September 2024 monthly update

1
A WORD FROM THE MANAGER
Barramundi’s gross performance return for August was up +0.3% and the
Adjusted NAV return was up +0.1%. This compares to the S&P/ASX200
Index (70% hedged into NZ$) which rose +0.1% over the month.
Although our portfolio and the ASX200 both essentially finished flat for
the month, this masks a volatile month for a large number of individual
companies whose share prices moved significantly following the release
of their financial results in the month.
Portfolio News
WiseTech’s (+25% in A$) annual result which included strong revenue
(+28%) and profit (+24%) growth was in line with market expectations,
albeit profit (and margin) guidance for FY25 exceeded expectations. The
result and guidance reinforce the strength of the Cargowise software
offering, and the broadening of the economic moat around the business.
To this end, it has added to its list of top 25 freight forwarders, recently
signing Nippon Express to a global rollout of the product (Nippon is the
6th largest freight forwarder globally). It has also announced three new
product releases for FY25 which enhance the value its software provides
for its customer base.
Brambles (+17%) reported a 7% constant currency (“CC”) increase
in revenue for its FY24 year. EBIT and NPAT were both up by 17% CC.
These healthy outturns were achieved despite substantial destocking of
pallets over the year, which demonstrates the sustainability of the price
increases taken by Brambles over recent years to recover higher operating
and capital costs. The company is now producing strong free cash flow
and its confidence in maintaining this has been signalled by an increase
in its target dividend payout rate (now 50-70%) and a US$500m share
buyback.
Ansell (+10%) has been on a rollercoaster ride over the last four years.
Initially Covid-19 saw demand for its Healthcare business’ personal
protective equipment (“PPE”) products soar but over the last couple of
years volumes have been impacted by distributors and end users reducing
stockpiled PPE. For FY24 Ansell reported a 3% constant currency (“CC”)
fall in revenue. The 10% decline in Ansell’s FY24 underlying earnings was
better than the market had expected, with a fall of only 3% in the second
half after an 18% drop in the first half. For FY25 Ansell has guided to
underlying earnings per share being up by between 1% and 20%. This
is diluted by the recent equity raising for the acquisition of Kimberly-
Clark’s PPE business. The inferred increase in underlying NPAT is 19-41%,
which is boosted by the acquisition but also reflects what should be the
company’s first “normal” year since FY19.
SEEK (+5%) provided a solid result in what is a tough macro
environment. ANZ job listing volumes fell -20% as SEEK cycled peak
volumes in the prior period. This was somewhat offset by +13% yield
growth, led by variable ad pricing and a favourable shift in customer mix.
In Asia job listing volumes fell -21%, more than offset by yield growth of
+24%. The Asian business benefitted from the transition to the recently
completed unified technology platform which allowed it to introduce ANZ
developed products, like variable pricing, across its markets. SEEK guided
to FY25 revenue and EBITDA to be flat (at the midpoint of guidance) as
macro conditions remained tough across its markets. SEEK is in a strong
position to sustainably grow revenues and profits over 10% per year once
the macro environment improves.
oOh!media (-12%) reported a slightly disappointing result for the first
six months of its 2024 year with underlying after tax profit 11% behind
the comparable period. The company had always signalled a lacklustre
first half due to the loss of a contract for outdoor advertising within
Vicinity Centres’ shopping malls. Coupled with some execution issues
which weighed on its key roadside billboard segment in Q2, revenue
for the half year was down by 3% versus an 8% increase in revenue
for the Australian out-of-home (“OOH”) advertising sector in total. The
OOH sector continues to perform strongly in a soft Australian advertising
market as it takes share from other traditional advertising media formats.
It is this structural shift in advertising spend that we are backing via
oOh!media, which is the largest player in the Australian OOH sector. The
company’s prospects for the second half of this year and for 2025 are
looking healthier following two recently announced contract wins which
should bolster earnings over the next 18 months.
PWR Engineering (-23%) reported strong revenue growth (+17%),
offset by increased employee expenses (+21.5%). Investing to support
future growth is not something new for PWR, however the quantum
of the growth likely surprised the market. It had a one-off step change
in its wage rate for lower wage earners to keep it competitive in the
marketplace, while also investing in 21 highly skilled employees in
anticipation of a ramp up in its production of cooling products for its
aerospace customers. Its guidance also disappointed, again at the cost
line as it forecast a further investment in its fast-growing aerospace
division and equipment for its new facility that it is migrating to in 2025.
These additional costs are not earning revenues today but once the
Aerospace projects progress from prototype phase to full production
phase we expect to see strong revenue growth and operating leverage
coming through.
Johns Lyng (-36%) reported a FY24 result that missed the market’s
expectations slightly, but it was the soft FY25 guidance that led to a
sharp fall in its share price. FY24 revenues were negatively impacted
by generally benign weather conditions in Australia, leading to less
weather-related repair jobs. This was compounded by specific operational
underperformance by three of its business units in NSW which saw an
insurer pause allocating work to those units. Johns Lyng moved to quickly
replace the business partners leading those units in February this year,
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
September 2024
$
0.72
Share Price
as at 31 August 2024
DISCOUNT
1
6.9
%

BRM NAV
$
0.79
$
0.05
Warrant Price

SECTOR SPLIT
as at 31 August 2024
KEY DETAILS
as at 31 August 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
$0.76
PERFORMANCE FEE CAP
1.25%
SHARES ON ISSUE
283m
MARKET CAPITALISATION
$204m
GEARING
None (maximum permitted 20%
of gross asset value)
4
%
17
%
21
%

CASH &
DERIVATIVES
17
%
COMMUNICATION
SERVICES
23
%
2
%
3
%

FINANCIALS
CONSUMER
STAPLES
MATERIALS
5
%
and the insurer has recommenced allocating work. Volumes will take
until 4Q25 to scale back to previous levels, weighing on the pace of the
earnings recovery. In the US Johns Lyng continues to execute well. It is
investing for future growth and during FY24 it was appointed to its first
national insurance panel, while also expanding its brands across all its key
states. We believe Johns Lyng is well placed to continue taking market
share and growing strongly in Australia, while also being well placed to
succeed in the large US market.
Audinate (-36%) fell after announcing FY24 results that met market
expectations, but where initial guidance for FY25 pointed to a decline in
revenue which was poorly received. Revenue is expected to rebound once
again in FY26. A key reason for the backwards step in FY25 growth stems
from customers over-ordering networked audio chips as the pandemic-
related supply chain constraints eased. One large customer in particular
needs to work through the excess inventory of chips in FY25 before
reverting to more normal chip purchasing patterns. While disappointing,
the medium-term growth outlook for Audinate remains sound as
Robbie Urquhart
Senior Portfolio Manager
Fisher Funds Management Limited
the company continues to make progress developing products and
benefitting from the structural shift to digital audio (and video) related
hardware and software products.
Portfolio Changes
We added to our Johns Lyng and PWR Engineering positions following
their share price falls. We reduced our weighting in Ansell and trimmed
our WiseTech position – both on valuation grounds following a strong
increase in their respective share prices in the month.
2
8
%
INDUSTRIALS
CONSUMER
DISCRETIONARY
INFORMATION
TECHNOLOGY

HEALTH CARE

AUGUST’S SIGNIFICANT RETURNS IMPACTING
THE PORTFOLIO
during the month in Australian dollar terms
WISETECH
+25
%
FINEOS CORP
-22
%
PWR HOLDINGS
-23
%
AUDINATE GROUP
-36
%
JOHNS LYNG GROUP
-36
%
5 LARGEST PORTFOLIO POSITIONS as at 31 August 2024
WISETECH
9
%
CSL LIMITED
11
%
SEEK
6
%
XERO
5
%
MACQUARIE GROUP
5
%
The remaining portfolio is made up of another 19 stocks and cash.
1 Month3 Months1 Year3 Years
(annualised)
5 Years
(annualised)
Company Performance
Total Shareholder Return(1.5%)+1.0%+4.9%(4.6%)+13.2%
Adjusted NAV Return+0.1%+5.8%+12.2%+4.1%+11.8%
Portfolio Performance
Gross Performance Return+0.3%+6.4%+15.0%+6.1%+14.5%
Benchmark Index^+0.1%+6.0%+15.7%+7.8%+8.8%
PERFORMANCE to 31 August 2024
3
TOTAL SHAREHOLDER RETURN to 31 August 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
$4.00
$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 Final Exercise Price of each warrant is $0.63
»The Exercise Date for the warrants is 25 October 2024