Challenging year for Barramundi

Results for announcement to the market
Name of issuer Barramundi Limited
Reporting Period 12 months to 30 June 2022
Previous Reporting Period 12 months to 30 June 2021
Currency NZ$

Amount (000s) Percentage change
(Loss)/Revenue from continuing operations (32,631) (157%)
Total (Loss)/Revenue (32,631) (157%)
Net (loss)/profit from continuing operations (34,645) (166%)
Total net (loss)/profit (34,645) (166%)

Interim/Final Dividend
Amount per Quoted Equity Security $NZ 1.36 cents per share
Imputed amount per Quoted Equity Security $NZ 0.00012630
Record Date 8 September 2022
Dividend Payment Date 23 September 2022
Current period Prior comparable period
Net tangible assets per Quoted Equity Security $0.64 $0.87

A brief explanation of any of the figures above necessary to enable the figures to be understood The financial statements attached to this report have been audited by PricewaterhouseCoopers and are not subject to a qualification. A copy of the auditor’s report applicable to the financial statements is attached to this announcement.

Authority for this announcement
Name of person authorised to make this announcement W.A. Burns
Contact person for this announcement W.A. Burns
Contact phone number (09) 4840352
Contact email address [email protected]
Date of release through MAP 22 August 2022
Audited financial statements accompany this announcement.


For immediate release:

22 August 2022

Challenging year for Barramundi

Highlights
• Net loss after tax for the year ended 30 June 2022 ($34.6m)
• Total Shareholder return* - 23.5%
• Dividend return +7.1%
• Adjusted NAV return** -16.2%

Barramundi Limited (NZX: BRM) today announced a net loss for the 12 months to 30 June 2022 of $34.6m, following last year’s record net profit of $52.3m. The second six months of the 2022 financial year more than reversed a first half profit of $14.9m.

Key elements of the FY22 result include losses on investment of $36.4m, dividend, interest and other income of $3.8m, less operating expenses, fees and tax of $2.0m.

The challenges endured by listed equity markets since the beginning of the 2022 calendar year will come as no surprise to shareholders and the Barramundi portfolio has not been immune to those pressures, recording a significant loss for the second six months of FY22, $49.5m.

Pressures from post-Covid inflation, supply chain disruption, coupled with international uncertainty following Russian’s invasion of Ukraine have combined to materially and negatively impact the value of the Barramundi portfolio. In addition, Australian energy, commodity and defensive stocks have outperformed growth stocks. These stocks are not Barramundi’s natural portfolio companies, as they often lack a durable competitive advantage and/or have weaker long-term growth prospects.

The portfolio’s net after fees and expenses Adjusted NAV of -16.2% (-15.3% gross performance*** before fees and expenses) was well below the S&P/ASX 200 Index (hedged 70% to NZ$) benchmark**** which was down -5.3% for the 12-month period.

Total shareholder return (TSR) for the 12-month period was in negative territory at -23.5%. TSR includes share price movement, dividends paid, and the impact of warrants.

The lower return delivered by the portfolio activated the management fee rebate (the fulcrum fee*****) which reduced the management fee for the year from 1.25% to 0.75%. The fulcrum fee mechanism is a particular feature of the Fisher-managed listed equity funds which reduces the management fee when actual returns fall below the S&P/NZX Bank Bill 90-day rate.

In accordance with Barramundi’s quarterly distribution policy (2.0% of average NAV per quarter), the company paid a total of 6.68 cents per share to shareholders during the year ended 30 June 2022. On 22 August 2022, the board declared a dividend of 1.36 cents per share, payable on 23 September 2022 with a record date of 8 September.

Chair Andy Coupe said “Barramundi has experienced a challenging year with difficult and uncertain market conditions dominating the second half, influenced by global uncertainty about the ongoing impact of the pandemic and government response, inflationary concerns (both Australian and international), rising interest rates, and extreme political tension on the international front following the Russian invasion of Ukraine. FY22 was a year of two halves, with a first half profit (+$14.9m) followed by a tough second half (-$49.5m), producing a net loss of $34.6m for the full year.

The company is encouraged that, despite the difficult environment for listed equities, the majority of the companies within the Barramundi portfolio are delivering solid earnings. This underlying business performance allows us to have confidence about the investment strategy and the medium-term resilience of the portfolio.”

Senior Portfolio Manager Robbie Urquhart added “The difficult global backdrop has made for a tough year for Barramundi. Our portfolio companies are navigating this period well operationally. Encouragingly, we’ve seen lots of evidence that they are continuing to reinvest profits in long-term growth initiatives in their businesses. Complementing this we’ve seen CSL, Carsales and AUB Group – longstanding holdings of Barramundi – complete acquisitions through this difficult period. They have not been swayed by this challenging backdrop. Tough periods such as these tend to present patient investors with great long-term investment opportunities.”

For further information, please contact:
Wayne Burns
Corporate Manager
Barramundi Limited
Tel: (09) 484 0352

* 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.
** Adjusted NAV (net asset value) return- the underlying performance of the investment portfolio, adjusted for capital management initiatives (dividends, buybacks & warrants), and after expenses, fees & tax.
*** Gross performance return – The Manager’s portfolio performance in terms of stock selection & currency hedging before expenses, fees and tax.
**** S&P / ASX 200 index (hedged 70% to NZ$).
***** In accordance with the Management Agreement, the management fee rate has reduced from 1.25%pa to 0.75%pa for the year, (i.e. a 50 basis point reduction), because the gross performance of Barramundi (as calculated for the fulcrum fee rebate) was 19.7 percentage points below the S&P/NZX Bank Bill 90 day index rate for the year of 0.8%.

The total shareholder return, adjusted NAV return and gross performance return methodologies are described in the Barramundi Non-GAAP Financial Information Policy. A copy of the policy is available at http://www.barramundi.co.nz/about-barramundi/barramundi-policies/

About Barramundi
Barramundi is a listed investment company that invests in quality, growing Australian companies. The Barramundi portfolio is managed by Fisher Funds, a specialist fund manager with a track record of successfully investing in growth company shares. The aim of Barramundi is to offer investors competitive returns through capital growth and dividends, and access to a diversified portfolio of investments through a single, tax-efficient investment vehicle. Barramundi listed on NZX Main Board on 26 October 2006 and may invest in companies listed on the Australian Securities Exchange (with a primary focus on those outside the top 20 at the time of investment) or unlisted companies.

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