Kingfish Ltd. · NZX:KFL
Kingfish — Shareholder Meeting (August 2022)
45 slides from Kingfish's shareholder meeting presentation, Aug 5, 2022
Slide 1: Annual Meeting of Shareholders
Kingfish Limited ANNUAL MEETING OF SHAREHOLDERS 5 August 2022
Slide 2: Board of Directors and Kingfish Team
Board of Directors Andy Carol David Fiona Coupe Campbell McClatchy Oliver Kingfish Team Sam Dickie Matt Peek Michael Wayne Burns Senior Portfolio Senior Investment Bacon Corporate Manager Analyst Senior Investment Manager Analyst
Slide 3: Agenda
Agenda • Preliminary matters • Chair’s Overview • Manager’s Review • Q&A • Annual Meeting Resolutions
Slide 4: Online Attendees – Question Process
ONLINE ATTENDEES – QUESTION PROCESS Written Questions: If you have a question to submit please select the Q&A tab on the right half of your screen. Type your question into the field and press submit. Your question will be immediately submitted. Help: The Q&A tab can also be used for immediate help.
Slide 5: Chair's Overview
Chair’s Overview
Slide 6: Kingfish's Investment Objectives
Kingfish’s Investment Objectives Absolute Returns Achieve a high real rate of return, comprising both income and capital growth within acceptable risk parameters Diversified Portfolio Access to a diversified portfolio of New Zealand quality, growth stocks through a single tax-efficient vehicle
Slide 7: Corporate Governance
Corporate Governance • Board meetings • Investment Committee meetings • Audit & Risk Committee meetings
Slide 8: 2022 Overview
2022 Overview Net (loss) /profit Dividend NAV per share Share price ($17.3m) 14.34cps $1.58 $1.75 (2021: $142.7m) (2021: 13.48cps) (2021: $1.77) (2021: $1.90) Share price Total shareholder Adjusted NAV Dividend return premium to NAV ^ return* return* +0.02% +7.4% -3.5% 11.6% (2021: +65.1%) (2021: +7
Slide 9: 2022 Overview – Continued: Portfolio Performance
2022 Overview – Continued Portfolio Performance For the year ended 3 years 5 years 12 months 31 March (annualised) (annualised) Adjusted NAV return* -3.5% +11.0% +13.0% (2021: +41.1%) Gross performance * -2.5% +13.5% +15.6% (2021: +46.0%) Benchmark Index ^ -3.6% +7.1% +11.0% (2021: +28.2%) *These me
Slide 10: Earnings per share
Earnings per share Earnings per 2022 2021 2020 2019 2018 Share Basic Earnings per Share -5.49 56.28 0.75 24.24 19.62 (cents) Diluted Earnings per -5.49 54.65 0.75 23.81 19.51 Share (cents)
Slide 11: Use of Shareholder's Funds
Use of Shareholder’s Funds 12 months to 31 March 2022 ($m) 600 550 16 500 450 400 350 300 250 200 Opening Net Dividends Dividends Closing NAV Profit Paid Reinvested NAV
Slide 12: First Four Months, FY 2023
First Four Months, FY 2023 1 April – 31 July 2022 Total shareholder return* Adjusted NAV return* -7.2% -5.5% NAV per share 31 July 2022 Share price 31 July 2022 $1.46 $1.60 Net loss ($28.3m) *These metrics are Non-GAAP measures calculated in accordance with the methodology described in the Kingfish
Slide 13: Warrants and Capital Management Programme
Warrants • Capital Management Programme • 79.1m KFLWG warrants issued in November 2021 with an initial exercise price of $2.03 • Exercise date is 18 November 2022 • The final exercise price will be announced in early October
Slide 14: Manager's Review
Manager’s Review Sam Dickie Senior Portfolio Manager
Slide 15: Who am I?
Who am I?.... • I have grown profits by 75% over the past 4 years • That is 3x as fast as my closest competitor • Demographics are a tailwind • Despite this, I am the cheapest I have ever been
Slide 16: Agenda
Agenda 1. FY2022 review 2. Market update 3. Kingfish process in action 4. Portfolio insights 5. Outlook
Slide 17: 1. FY2022 review
1. FY2022 review
Slide 18: Manager performance in Financial Year end 2022
Manager performance in Financial Year end 2022 - -1% -2% -2.5% -3% -3.6% -4% Kingfish gross performance return S&P/NZX50G index
Slide 19: Financial Year 2023 performance to 3 August 2022
Financial Year 2023 performance to 03 August 2022 - -0.5% -1.0% -1.5% -2.0% -2.5% -2.2% -3.0% -3.5% -3.3% Kingfish gross performance return S&P/NZX50G index
Slide 20: Portfolio company performance in FY2022
-50% 25% 50% -25% 0% Pushpay Holdings Ryman Healthcare a2 Milk F&P Healthcare Port Of Tauranga Vista * Re-entered EBOS in December 2021 – Chart displays holding period return Delegat Meridian Energy Summerset Auckland Airport Freightways Infratil Portfolio company performance in FY2022 Contact EBOS*
Slide 21: 2. Market Update
2. Market Update
Slide 22: Global markets have sold off in two phases
Global markets have sold off in two phases 14,000 Phase I: Inflation + interest rate explosion = valuation correction 13,000 12,000 11,000 Phase II: Recession/corporate earnings fears 10,000 Mar 21 Jun 21 Sep 21 Dec 21 Mar 22 Jun 22 FY2022 financial year Note: S&P/NZX50G index; Source: Bloomberg
Slide 23: Interest rates have driven down valuations
Phase I Interest rates have driven down valuations 25 0% 1% 20 2% 3% 15 4% 10 5% 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 S&P 500 P/E Ratio (LHS) US 10 Year Treasury yield Inverted (RHS) Source: Bloomberg
Slide 24: Concerns about global growth
Phase II Concerns about global growth Average across 2021 Latest World 2022 Real GDP Growth 4.3% 3.0% US Business Outlook Survey 31 -12 (diffusion index) NZ Consumer Sentiment 108 82 (ANZ Roy Morgan) Source: Bloomberg
Slide 25: But…the good news is…fear is elevated
But…the good news is…fear is elevated Outside of major economic stress, risk indicators have not been this elevated 4 GFC 3 COVID-19/global lock-downs 2 Eu sovereign crisis Tech 1 wreck 0 -1 Jan 01 Jan 03 Jan 05 Jan 07 Jan 09 Jan 11 Jan 13 Jan 15 Jan 17 Jan 19 Jan 21 BofA Risk Indicator Source: Bloo
Slide 26: 3. Kingfish process in action: Divergence between fundamentals and sentiment
3. Kingfish process in action: Divergence between fundamentals and sentiment
Slide 27: Execution of growth strategy continues
Execution of growth strategy continues 2017A 2022A 219 166 Building & Focus on intensifying 73 86 culture, the branch people, network service New Zealand Offshore Top 500 customers in FY22 Transport profit before tax margin (percent of revenue) +78 newly won customers Increasing 10% Growing market +
Slide 28: Onus shifts to 'bears' to prove slowdown
Onus shifts to ‘bears’ to prove slowdown Share price has pulled back sharply … … despite continued growth trajectory in the core business (weekly profit before tax) 100 $6m $5m 80 $4m 60 $3m 40 $2m $1m 20 - 0 FY17 FY18 FY19 FY20 FY21 FY22 FY23E Mar 16 Mar 17 Mar 18 Mar 19 Mar 20 Mar 21 Mar 22 Transp
Slide 29: 4. Portfolio insights
4. Portfolio insights
Slide 30: Portfolio management: FY22 and FY23 to date
Portfolio management: FY22 and FY23 to date Target weight changes (net) Smaller Larger
Slide 31: What went especially well and why
What went especially well and why Continues to take market share in Strong asset realisations pharmaceutical distribution Date Event % Market cap April 2020 Tilt Renewables capital return 4.4% August 2021 Tilt Renewables full sale 34.1% July 2022 Vodafone towers sale 14.2% Total 52.7% Market capital
Slide 32: What didn't go well and what we learned
What didn’t go well and what we learned Revenue spike from COVID coming Differentiated capital management back to earth 2000 1750 50% Net debt / (net debt + equity) 45% 1500 40% 1250 35% 1000 30% 750 25% 20% 500 2016 2017 2018 2019 2020 2021 FY16 FY17 FY18 FY19 FY20 FY21 FY22 FY23E FY24E Ryman Summe
Slide 33: 5. Outlook
5. Outlook
Slide 34: Outlook
Outlook • NZ/global economic activity levels slowing • Inflation and interest rates possibly stabilising • Volatility creates opportunities • Consistent strategy: Wide moats, long growth runways, exceptional management
Slide 35: A tough few months for Kingfish but long term outperformance intact
A tough few months for Kingfish but long term outperformance intact $1,400,000 Adj. NAV S&P/NZX50G $1,200,000 $1,000,000 $800,000 $600,000 $400,000 $200,000 $- Mar 04 Mar 06 Mar 08 Mar 10 Mar 12 Mar 14 Mar 16 Mar 18 Mar 20 Mar 22 As at 31 July 2022
Slide 36: … I am Summerset
… I am Summerset 3.0x 2.5x 2.0x 1.5x 1.0x 0.5x Nov 11 Nov 13 Nov 15 Nov 17 Nov 19 Nov 21 Summerset rolling 12 month forward estimated Price/Book Source: Bloomberg
Slide 37: General Questions from Shareholders
General Questions from Shareholders (not relating to resolutions)
Slide 38: Online Attendees – Voting Process
ONLINE ATTENDEES – VOTING PROCESS Shareholder & Proxyholder Voting Once the voting has been opened, the resolutions and voting options will allow voting. To vote, simply click on the Vote tab, and select your voting direction from the options shown on the screen. You can vote for all resolutions at
Slide 39: Annual Meeting 2022 resolutions
Annual Meeting 2022 resolutions
Slide 40: 2022 Annual Meeting Resolutions
2022 Annual Meeting Resolutions • Introduce and propose • Discussion, questions • Lodge your vote per the digital portal
Slide 41: Matters of Business
Matters of Business • Annual Report • Resolutions: – Elect Fiona Oliver – Auditor remuneration
Slide 42: Election of Fiona Oliver
Resolution 1 Election of Fiona Oliver To elect Fiona Oliver as a Director of Kingfish Limited
Slide 43: Auditor Remuneration
Resolution 2 Auditor Remuneration That the Board of Directors be authorised to fix the remuneration of the auditor for the ensuing year
Slide 44: Conclusion
Conclusion • Complete and sign voting paper • Voting papers in the voting boxes • If you need a voting paper please see Computershare • Results to NZX
Slide 45: Thank you
Thank you