Kingfish Limited Annual Meeting of Shareholders 31 July 2015 - - PowerPoint PPT Presentation

Annual Meeting of Shareholders

31 July 2015

Kingfish Limited

Preliminary Matters

• 2014 Meeting Minutes
• 2015 Annual Report
• Voting by way of poll
• Voting papers

Agenda

• Chairman’s Overview
• Manager’s Review
• Questions relating to the management

and operations of the business

• Annual Meeting Resolutions

– Re-election of Carmel Fisher – Auditor’s Remuneration – Increase Director Fees by $5k

Please note

• The information given during this

presentation is class advice and is not to be taken as ‘personalised financial advice’

• A disclosure statement is available
• n request

Introduction

Board of Directors

– Alistair Ryan (Chairman) – Carmel Fisher – Carol Campbell – Andy Coupe

Senior Portfolio Manager

– Murray Brown

Senior Investment Analyst

– Zoie Regan

Corporate Manager

– Glenn Ashwell

Proxy Count

Resolution For Against Discretionary Total Abstain

Re-elect Carmel Fisher 8,550,820 36,500 498,043 9,085,363 10,000 Fix auditor’s remuneration 8,559,039

• 526,479

9,085,518 9,845 Increase directors’ fees by $5k 7,837,187 561,365 604,854 9,003,406 91,957 Proxy votes to date: 9.1 million

Presentation of Annual Result

Chairman’s Overview

Investment Objectives

• A high real rate of return

– income and capital growth – within acceptable risk parameters

• Access to a diversified portfolio

– New Zealand growth stocks – Single tax-efficient vehicle

Overview of the Year

• Net profit $11.9m (2014: $26.5m)

162 166 13 12 5 120 130 140 150 160 170 180 Opening NAV Net Profits Dividends Paid Dividends Reinvested Closing NAV

Use of Shareholders’ Funds

Year ended 31 March 2015 ($m)

Overview of the Year

*Assumes all dividends are reinvested, but excludes imputation credits.

• Net profit $11.9m (2014: $26.5m)
• Total Shareholder Return* +16.1%

(2014: +18.9%)

16.1% 18.7% 7.0% 8.4% 0.7% 2.6% 0% 5% 10% 15% 20% 25% 30% Share Price Change Dividends DRP TSR Warrants (1 for 4) TSR + Warrants

Total Shareholder Return

1 Year to 31 March 2015

*Assumes all dividends are reinvested, but excludes imputation credits.

Overview of the Year

*Assumes all dividends are reinvested, but excludes imputation credits.

• Net profit $11.9m (2014: $26.5m)
• Total Shareholder Return* +16.1%

(2014: +18.9%)

• Warrants +2.6%

Warrants

• New warrants issued November 2014
• 1 warrant for every 4 shares held
• Final exercise price announced in

October, expected to be ~$1.18

• Exercise form available October
• Exercise date 6 November
• Listed: KFLWC

Overview of the Year

• Net profit $11.9m (2014: $26.5m)
• Total Shareholder Return* +16.1%

(2014: +18.9%)

• Warrants +2.6%
• 10.74 cents per share paid in

dividends (2014: 10.30cps)

*Assumes all dividends are reinvested, but excludes imputation credits.

Overview of the Year

• Net profit $11.9m (2014: $26.5m)
• Total Shareholder Return* +16.1%

(2014: +18.9%)

• Warrants +2.6%
• 10.74 cents per share paid in

dividends (2014: 10.30cps)

• Adjusted NAV* +6.7% (2014: +18.1%)

*Assumes all dividends are reinvested, but excludes imputation credits.

Adjusted Net Asset Value (NAV)

For year to 31 March 2015 Five Years

(accumulated)

Adjusted NAV*

+6.7% +78.2%

S&P/NZX50G Index

+13.5% +78.5%

*Assumes all dividends are reinvested, but excludes imputation credits.

Index Reporting

• Wider Investment Mandate
• Five of the top 10 NZX companies
• S&P/NZX50G v S&P/NZX Midcap

Three Month Update 1 April – 30 June 2015

to 30 June 2015

Adjusted NAV*

(0.5%)

Total Shareholder Return*

+2.0%

S&P/NZX50G Index

(1.8%)

*Assumes all dividends are reinvested, but excludes imputation credits.

Manager’s Review

Part 1 Carmel Fisher

Is our approach still the right

• ne?
• 2015 was a year of underperformance
• The market and our investment style have evolved

Do we need to evolve further?

Investment techniques change with time

1940s 1970s 1980s Value investing – mostly quantitative “Margin of Safety” Quality of business and its prospects as important as price “Boy, if I had listened

• nly to Ben, I would

have been a lot poorer”

Evolution of investment style

The Fisher Funds STEEPP Analysis model

Evolution of investment style

The Fisher Funds STEEPP Analysis model

Stock A Stock B 5 4 4 2 4 2 3 3 3 3 2 4 21/30 18/30

Evolution of investment style

Yes, but…

How strong is strong? And for how long? Does a track record of 10 years ago matter? Is revenue growth a good substitute? In a low-growth world, is this achievable? Just how important is management, really? Price relative to history? Peers? Market?

Fisher Funds 2015

• STEEPP remains valid
• Strength = Quality = Wide Moat
• Earnings history is mandatory
• Price/Valuation no more important

than other five factors

• Think in ‘what-if?’ terms not single

point forecasts

• Invest with a medium term horizon

Is our approach still the right

• ne?

“You are neither right nor wrong because the crowd disagrees with you. You are right because your data and reasoning are right.” Ben Graham

The Final Word

“Get a little better over time so you’re virtually certain to make investments that are virtually certain to be good over time. Discipline, hard work and patience are the key” Charlie Munger

Manager’s Review

Part 2 Murray Brown

2015 Highlights / Lowlights

Highlights Lowlights

Sixth straight year of positive returns Market favoured stocks that score low in our STEEPP process Strong contributions from key portfolio holdings Underperformed the broader market Refreshed the portfolio with further quality companies Kathmandu disappointed

Performance FY2015

Kingfish Adjusted NAV assumes all dividends are reinvested, but excludes imputation credits.

Rally in low growth, yield stocks hurt relative performance

For the 12 months ending 31 March 2015

6.7% 13.5%

• 6.8%
• 10%
• 5%

0% 5% 10% 15% 20% Kingfish Adjusted NAV S&P/NZX50G Index Value Gap Return

6.7% 13.5% 0% 5% 10% 15% 20%

Kingfish Adjusted NAV S&P/NZX50G Index

Return

S&P/NZX50G Index Contribution FY2015

Index driven by low scoring STEEPP companies in 2015 7.5% 6.0% 13.5% 0% 5% 10% 15% 20%

Gentailers & Property Other S&P/NZX50G Index

Return

• 20%

0% 20% 40% 60% 80% 100% 120% 140% 160% Kingfish Adjusted NAV S&P/NZX50G Index

Kingfish Adjusted NAV assumes all dividends are reinvested, but excludes imputation credits.

Since Inception NAV Performance

Performance – YTD

Kingfish Adjusted NAV assumes all dividends are reinvested, but excludes imputation credits.

Better relative performance YTD

Reflects year to date performance to the 29 July 2015

2.9% 0.6% 2.3% 0% 1% 2% 3% 4% 5% Kingfish Adjusted NAV S&P/NZX50G Index Value Added

Return

• 4
• 3
• 2
• 1

1 2 3 4 5 6

F&P Healthcare Infratil Freightways Mainfreight Opus Ryman Kathmandu Contribution %

Key Contributors FY2015

What Worked in FY2015

55% 30% 35% 59% TSR

What Didn’t Work in FY2015

• 9%
• 61%
• 25%
• 9%

TSR

Portfolio Changes FY2015

Metro Performance +2.0% Auckland Airport +1.8% Meridian Energy +1.4% Restaurant Brands +0.6% Additions

Portfolio Refresh in 4Q

Kathmandu

• 5.8%

Exits Key Rebalances F&P Healthcare +2.6% Port of Tauranga +2.2% Ryman Healthcare

• 3.5%

Outlook

• Short-term challenges
• Little room for earnings disappointment
• Economy slowing
• Longer-term view remains positive
• Low interest rate environment
• Quality, growth companies will continue to perform

General Questions from Shareholders

(not relating to resolutions)

2015 Annual Meeting Resolutions

• Introduce and propose
• Discussion, questions
• Enter your vote on voting paper and

lodge your voting paper at end of resolutions

Matters of Business

• Annual Report
• Resolutions:

–Re-elect Carmel Fisher –Auditor remuneration –Increase director fees by $5k

To re-elect Carmel Fisher as a Director of Kingfish Limited

Resolution 1

Re-election of Director Carmel Fisher

Resolution 2

Auditor’s Remuneration

That the directors be authorised to fix the remuneration of PricewaterhouseCoopers as auditors for the ensuing year (2015/2016)

Resolution 3

Increase in Directors’ Fees

To authorise an increase in directors’ fees by $5,000 per annum from $100,000 to $105,000.

Conclusion

• Complete and sign voting paper
• Voting papers in the voting boxes
• If you need a voting paper please

see Computershare

• Results to NZX

Thank you