KFL – March 2025 monthly update

1
A WORD FROM THE MANAGER
The Kingfish portfolio gross performance return and adjusted NAV
return in February were -1.9% and -1.8% respectively, versus the
New Zealand shares benchmark S&P/NZX 50 return of -3.0%. This
reflected solid results on balance in February ‘reporting season’
against a tough backdrop, which saw many other companies deliver
poor results.
a2 Milk (+37%) delivered a surprisingly strong half-year result. The
company's English Label infant formula product grew sales +13% on
last year and has been performing strongly as it is at an affordable
price point at a time when Chinese families are under economic
pressure and looking for quality affordable options. The company
is well placed to continue its sales momentum with the launch
of premium ('Genesis') and budget ('Gentle Gold') English Label
alternatives, plus senior health fortified milk products. The maiden
dividend was a cherry on the top of a strong result.
EBOS (+0.1%) delivered a result that was hard to fault, with all
divisions either performing in-line with expectations or surprising to
the upside. The Community Pharmacy division was the standout,
surpassing its targets for market share gains and cost saving
initiatives are tracking to plan. The division is also benefiting from
an uplift in industry funding as a new wholesaler funding model
has been introduced in Australia. A drawback of the result was the
surprise news that long-tenured CEO John Cullity had resigned and is
being replaced by an external hire.
Fisher & Paykel Healthcare (-9%) saw its share price slump early in
the month with the company warning that it could face higher costs
following President Trump's announced 25% tariffs on products
imported from Mexico. Approximately 43% of the company’s revenue
came from the US, with approximately 60% of US volumes supplied
from its Mexican manufacturing campus. We expect the company
should be able to largely mitigate the tariffs over time (should they
eventually be implemented).
Freightways (+4%) was among the rare domestically focused
companies that performed credibly (again) despite a tough economic
environment on the back of market share gains. Revenue was up +7%
and net profit after tax grew +10%. However, the main New Zealand
courier business is seeing like-for-like customer volumes down -4%
on a year ago and is yet to see any real green shoots, saying the first
half of 2025 is likely to be a ‘grind’.
We built a position in Mercury (-6%) during the month. Mercury is one
of the five key New Zealand electricity generator-retailers (‘gentailers’).
Fundamentally, Mercury’s core economic 'moat' is its irreplaceable
low-cost hydro assets, with 9 power plants on the Waikato River. This
North Island hydro system provides a differentiated generation mix
to Meridian and Contact. Mercury also has a significant proportion
of wind versus other gentailers and a modest amount of geothermal
which nicely balance its generation portfolio. Another attractive
attribute is its well-progressed future development pipeline, mostly
wind but also geothermal expansion, with a solid balance sheet to
support this. We think the recent share price represents an attractive
entry point, similar to our entry of Contact in August 2020, which has
significantly outperformed both the other gentailers and NZ market
since.
Ryman (-24%) unexpectedly announced it is raising $1 billion of new
equity to pay down debt. This was disappointing, given the balance
sheet has been a focus area for us and the management team had
assured us all was in order at its late November result. The company
concurrently provided a weak trading update with December
quarter sales applications down around 40% on the prior year, citing
challenging market conditions, heightened competitive activity and
impact from "changes to Ryman's ORA [Occupancy Right Agreement]
pricing model, organisational restructure and reduced incentives
in market". Again, this was not on management's radar previously.
The company flagged yet more potential impairments to its assets
despite recent write-downs. Ryman also announced it will halt more
future developments and has roughly halved its combined build rate
for the 2026 and 2027 financial years, which will curtail future growth.
Despite being long-term investors in Ryman (Kingfish invested in the
company back at inception ahead of a long period of significant value
creation) our thesis has shifted negatively over recent years. While
we reduced the position size significantly over the last five or so years
reflecting various issues, we ultimately thought the company still
had a strong brand and business model and would regain success
with a capable management team and board in place. The surprise
1
Share Price Discount to NAV (using the net asset value per share, after expenses, fees and tax, to four decimal places).
MONTHLY UPDATE
March 2025
KFL NAV
$
1.43
$
1.36
SHARE PRICE
DISCOUNT
1
4.8
%
as at 28 February 2025

2
KEY DETAILS
as at 28 February 2025
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
$1.26
PERFORMANCE FEE CAP
1.25%
SHARES ON ISSUE
345m
MARKET CAPITALISATION
$470m
GEARING
None (maximum permitted 20%
of gross asset value)
SECTOR SPLIT
as at 28 February 2025
equity raise and change in narrative from the new management
team materially impaired our investment thesis: (1) we have lower
confidence in the management and board; (2) greatly reduced sales
after making necessary changes suggest weaker brand and poor
execution, in stark contrast to Summerset; (3) the growth profile
is now lower than we expected; and (4) valuation upside has been
eroded through significant dilution from the large equity raising,
further impairments, and the lower growth outlook. We did not
participate in the equity raising and have fully exited our existing
holding in Ryman. Ultimately Ryman has been a disappointing holding
in recent years and has weighed on the performance of the Kingfish
portfolio, although cutting the size of the position meaningfully
mitigated the extent of the drag. We will take lessons forward in our
efforts to continuously improve.
Summerset (-5%) reported strong 2024 full year results despite
encountering one of the most challenging business environments
seen in the company's history. These highlighted its ability to execute
strongly from both a sales and development perspective, with record
total settlements (+12% on 2023), record underlying profit (+8%),
record net operating cash flow (+11%) and yet another record net
tangible asset value per share (+13%). Importantly Summerset also
provided an upbeat albeit cautious trading update for the first 8
weeks of 2025, citing "market conditions are stable with some early
signs of improvement" with the rate of contracting up around 30%.
Vista (+18%) was a case of saving the best 'til last, with the company
releasing a strong result on the last day of reporting season. Revenue
came in marginally ahead of expectations, but the highlight was cost
controls seeing this drop through to a profitability and see it deliver
profit well ahead of expectations, with profit margin of 14.4% coming
in above the top end of the company's 13-14% guidance. The big long
term positive was the company having the confidence to increase its
long term profit margin aspiration to within the range of 33-37%, from
25-30%+ previously. The fact it has recently achieved its guidance
adds to the credibility of these aspirations.
1
%
25
%
10
%
CONSUMER
STAPLES
INDUSTRIALS
8
%

UTILITIES
MATERIALS
4
%
CASH
5
%
34
%
HEALTHCARE
INFORMATION
TECHNOLOGY
13
%

FINANCIALS
Matt Peek
Portfolio Manager
Fisher Funds Management Limited

33
TOTAL SHAREHOLDER RETURN to 28 February 2025
FEBRUARY'S SIGNIFICANT RETURNS IMPACTING
THE PORTFOLIO during the month
5 LARGEST PORTFOLIO POSITIONS as at 28 February 2025
a2 MILK COMPANY
+37
%
VISTA GROUP
+18
%
MERCURY
-6
%
FISHER & PAYKEL
HEALTHCARE
-9
%
RYMAN HEALTHCARE
-24
%
FISHER & PAYKEL
HEALTHCARE
17
%
MAINFREIGHT
13
%
SUMMERSET
10
%
INFRATIL
9
%
AUCKLAND
INTERNATIONAL
AIRPORT
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+0.7%+3.0%+17.3%(0.4%)+6.1%
Adjusted NAV Return(1.8%)(2.1%)+17.4%+4.6%+6.4%
Portfolio Performance
Gross Performance Return(1.9%)(2.0%)+19.8%+6.1%+8.2%
S&P/NZX50G Index(3.0%)(3.6%)+7.3%+1.7%+2.3%
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 28 February 2025
The remaining portfolio is made up of another 10 stocks and cash.

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
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.
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
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