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About Kingfish |
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Kingfish
Kingfish gives investors an opportunity to invest in a diversified portfolio of investments, allowing investors access to between 10 and 25 growing companies through a single, professionally managed investment.
If you wish to buy shares in Kingfish you should contact your sharebroker.
Investment Objectives
The key investment objectives of Kingfish are to:
The investment philosophy of the Manager, Fisher Funds, is summarised by the following broad principles:
Authorised Investments
The Manager is authorised to undertake investments on behalf of the Company in accordance with the Management Agreement. The Manager is authorised to invest in the following on behalf of the Company:
Derivatives
It is not envisaged that the Company will invest in either interest rate or foreign exchange derivatives (other than in respect of management of interest rate exposures arising from permitted borrowings undertaken by the Manager on behalf of the Company) or foreign currency shares. Nor is it intended that the Manager will engage in short selling. Borrowings The Manager may procure a debt facility from a registered bank on behalf of the company. The amount drawn down under such a facility may not exceed an amount equal to 20% of the Gross Asset value of the Company, at the time of draw down. The Manager shall have the authority to draw this facility with the prior written approval of the Board. The Manager may use such borrowings where it believes they will enhance the management and/or the return of the Portfolio. Acquisition of Own Shares The Company may acquire its own Shares or provide financial assistance in connection with the purchase of its own Shares with shareholder approval by ordinary resolution and without shareholder approval if effected pro-rata to existing holders, or in certain other limited circumstances. The Company may also elect to acquire its own Shares in relation to the Dividend Reinvestment Plan. Capital Management The Board will from time to time consider buying Shares in Kingfish if in the opinion of the Board the value of the Shares do not appropriately reflect the underlying asset value. Any decision by the Board to acquire Kingfish Shares will consider other investment alternatives and whether any acquisition is in the best interest of the remaining shareholders. Dividend Policy
As an investment company that owns growth companies, Kingfish Limited (‘Kingfish’ or the ‘Company’) can be expected to generate greater long-term value for shareholders through capital growth than through dividend income. However, the Board recognises the importance of dividends to many shareholders and announced a new dividend policy on 24 June 2009.
Under the long-term distribution policy Kingfish will pay out to shareholders 2% per quarter of its average Net Asset Value (NAV). The payments will be made in March, June, September and December.
To meet the payment, Kingfish will firstly utilise income from its investments and realised capital gains. If these are insufficient to cover the targeted payout Kingfish may pay from its capital base.
A dividend from capital should not be confused with “yield” or “income” and shareholders should not draw any conclusion about the Company’s investment performance from the amount of dividends or from the terms of this policy.
As a Portfolio Investment Entity (PIE), distributions will be tax-free to NZ Resident Kingfish shareholders. Investors in Kingfish should refer to ‘PIE regime’ under the FAQ’s section of the website or their financial adviser for further information.
The Directors intend that imputation credits will be attached to dividends to the fullest extent possible. To the extent that the dividend is not imputed, the dividend should be treated as excluded income for New Zealand resident investors.
The Board may change or terminate this dividend policy at any time without prior notice to shareholders. Any such change or termination may have an adverse effect on the market price for the Company’s shares.
Portfolio Holdings as at 31 December 2011:
For our top five holdings, please refer to our latest NAV on our home page.
The following is a brief introduction to each of your portfolio companies, with a description of why we believe they deserve a position in the Kingfish portfolio. Abano HealthcareWhat does it do?Abano is an active investor in and operator of healthcare and medical services businesses. It operates a long term co-invest and build business model in the areas of audiology, dental, diagnostics and rehabilitation. Its clinics, practices, laboratories and offices are located across New Zealand, Australia and Asia. Why do we own it? We are attracted to its strategy of focusing on the private revenue segment of the healthcare and medical services market, and in particular specific groups within the sector where it can work in partnership with clinical founders to create shareholder wealth. Delegat’s GroupWhat does it do?Delegat’s produces and distributes super-premium wine internationally under the Oyster Bay brand. Oyster Bay is the number one selling New Zealand wine brand in the UK, Australia and Canada, and is currently the fastest growing New Zealand wine brand in the USA. Why do we own it? Delegat’s continues to outperform in a difficult industry segment. The industry suffers from an oversupply of grapes, and a strong currency headwind. Delegat’s has been successful in expanding its sales reach through its own dedicated sales team, whilst holding operating margins through changing its country sales mix. Fisher & Paykel HealthcareWhat does it do?Fisher & Paykel Healthcare is a leading designer, manufacturer and distributor of innovative medical devices for patients who require acute respiratory and obstructive sleep apnea care. Over 95% of its products are sold outside of New Zealand from dedicated manufacturing facilities in Auckland and more recently, Mexico. Why do we own it? We are attracted to the latent demand for Fisher & Paykel’s innovative care products as the worldwide population ages and the incidence of obesity rises. Through its own R&D, Fisher & Paykel Healthcare has continued to develop products that significantly expand its potential patient base, whilst increasing shareholder value. FreightwaysWhat does it do?Freightways operates nationwide express package and business mail operations with brands including NZ Couriers, Post Haste and DX Mail. It has also developed an information management business on both sides of the Tasman encompassing document and data storage, and document destruction. Why do we own it? Freightways is one of two dominant players in the New Zealand courier market. The company has an impressive track record of value-adding acquisitions that leverage off its existing infrastructure. Despite a sluggish domestic economy, its earnings have been resilient and it will be a major beneficiary of more buoyant domestic economic activity. InfratilWhat does it do?Infratil invests in a diverse range of infrastructure businesses encompassing renewable energy, air and road transport and downstream oil, with a focus on co-investment within Australasia. It is externally managed by an experienced management team. Why do we own it? We are attracted to Infratil’s 50% holding in Trustpower and that it invests in a range of unlisted infrastructure assets that are not easily replicable. Infratil’s goal of a 20%pa after tax return to shareholders meets our expectations and its track record since listing has been strong. KathmanduWhat does it do?Kathmandu is a retailer of clothing and equipment for travel and adventure in Australia, New Zealand and the UK. It operates a vertically integrated business from in-house design through to a company operated chain of over 100 stores. Total sales are split approximately 60% clothing, 40% equipment. Why do we own it? Kathmandu’s integrated model results in high margins despite operating three major sales per year which make up approx 70% of total sales. Earnings growth is driven by its store rollout programme, store improvements and a widening its product range. Kathmandu currently has strong same store sales growth, well above other retailers. MainfreightWhat does it do?Mainfreight is a global supply chain logistics company. It is a specialist freight forwarder and distributor, with interests spanning managed warehousing, transportation of hazardous substances, international freight, full truckload, and less than container load freight. Its operations span New Zealand, Australia, USA, Asia and more recently, Europe. Why do we own it? Mainfreight is a well run company with a special team culture. It continues to open new trade lanes as it spreads its logistics footprint ever wider. Growth will come organically and through judicious acquisitions as it seeks its goal of becoming a global logistics provider. MetlifecareWhat does it do?Metlifecare develops and manages retirement villages around New Zealand. It operates retirement villages that provide a continuum of care from independent lifestyle through to aged care support. Why do we own it? We are attracted to the demographic trends that support the growth of retirement and aged care living including: the ageing demographic profile, increasing penetration of retirement village living and an increasing ‘user pays’ health support mentality. Michael Hill InternationalWhat does it do?Michael Hill International is a specialist jewellery retailer, manufacturing most of its own diamond jewellery. The company operates stores in New Zealand, Australia, Canada and in the USA. Why do we own it? Michael Hill International’s Australasian business has continued to prosper through its policy of controlled profitable growth no matter the economic backdrop. Its smaller Canadian and USA operations have great potential to add to shareholder value going forward. NZXWhat does it do?NZX operates in three complementary areas – Information, Markets and Infrastructure. Through a series of acquisitions and in-house build, it now has a diversified earnings stream incorporating the sale of related information/data, and trading and clearing revenues across an expanding range of securities, derivatives, index and commodities products. Why do we own it? We like NZX’s diversified revenue streams and dominant market positions. Now that it has largely completed its acquisition and capital expenditure phase, it is now generating significant free cash flow resulting in higher dividend flows to shareholders. Opus InternationalWhat does it do?Opus is an international multidisciplinary infrastructure consultancy providing asset development and asset management solutions to the infrastructure sector. It operates consultancy practices in New Zealand, Australia, Canada and the United Kingdom. Why do we own it? We are attracted to the relatively high growth but low risk consultancy revenue streams connected to the roads, rail, water supply, stormwater, and waste water treatment sectors (amongst others) that Opus consults to. It is well positioned to benefit from the strong backload of infrastructure work in New Zealand and other countries. Pumpkin PatchWhat does it do?Pumpkin Patch is a childrenswear retailer now operating two brands – “Pumpkin Patch” and more recently “Charlie & Me” which is aimed at the everyday children’s clothing segment. The company has stores in Australia, New Zealand, the USA and the UK. Its wholesale division spreads its reach to many other markets globally. Why do we own it? Pumpkin Patch has a strong Australasian base and its USA and UK operations will add materially to earnings when these economies start to rebound. “Charlie & Me” stores will leverage off Pumpkin Patch’s existing infrastructure and should add to shareholder value in the medium term. Ryman HealthcareWhat does it do?Ryman Healthcare was formed in 1984 to develop, construct and operate retirement villages in New Zealand. It now has 23 retirement villages around New Zealand and is looking to expand in a controlled way into Australia. Why do we own it? Ryman is a premium developer and operator of retirement villages in New Zealand, and has stuck to its winning formula. Industry dynamics are extremely attractive, and Ryman has recently lifted its build rate of units and beds to meet demand. Summerset GroupWhat does it do?Summerset is an integrated retirement village builder, owner and operator. It has a 14 year track record and is now the second largest developer and the third largest owner of retirement villages in New Zealand. Why do we own it? Summerset operates a continuum of care model with aged care integrated into its villages. This model tends to be difficult to replicate, and can be operationally complex. Summerset has been operating long enough for villages to be cycling its first set of occupiers and this, plus new developments, starts a ‘wave of earnings’ which is financially efficient and self-funding. TOWERWhat does it do?Since the de-merger of TOWER Australia in 2006, TOWER has operated with three separate divisions - Health and Life, General Insurance and Investment Management in New Zealand and the Pacific Islands. More recently the company is operating an integrated functional model Why do we own it? TOWER’s largest shareholder, Guinness Peat Group (35%), has indicated that it is likely to sell all its investments over time. The potential is now there that TOWER may be split up, or sold outright and crystallise shareholder value. Trade Me GroupWhat does it do?
Why do we own it?Trade Me is NZ’s leading on-line business with market leading positions across a broad range of categories. It has became NZ’s leading general retail trading and auction internet platform, and has leveraged its brand into market leading ‘vertical’ positions in motors, property and jobs. The company is asset-light, with minimal working capital and capex requirements. Consequently there is a high conversion of profits into free cash flow. Although it has many competitors, its ‘moat’ is a combination of its market position, brand, infrastructure platform, diverse revenue streams and service culture. Wakefield HealthWhat does it do?Wakefield Health operates three private hospitals in Wellington (2) and Hastings. Its 13 operating theatres are used largely for elective and non-urgent surgery, mainly funded through the private sector. It is looking to add to its portfolio of hospitals over time. Why do we own it? The private hospital sector offers attractive attributes such as high barriers to entry and supportive demographics. New Zealand’s population, which is often characterised as “Ageing, Active and Aware”, creates a latent demand for elective and non-urgent surgery. Waterman HoldingsWhat does it do?Unlisted Waterman Holdings acquires and operates established unlisted medium sized businesses in New Zealand. The portfolio currently consists of investments in Guthrie Bowron, and David Reid Homes. It seeks significant influence over key strategic and financial decisions of its businesses. Why do we own it? Waterman operates in a niche market that is typically not represented through listed market vehicles. It is run by experienced operators who have significant ‘skin in the game’. Waterman takes a long-run view of its investments.
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