Kingfish Announces Annual Result
Kingfish Announces Annual Result
Kingfish Limited (“Kingfish”) today announced its annual result for the year to 31 March 2008. The company announced a decrease in the Net Asset Value per share (NAV) to $1.3124 compared with a NAV of $2.1520 at 31 March 2007. The operating loss of $36.6 million for the year to 31 March 2008 offset the previous year’s operating profit of $36.5 million.
Company chairman Rob Challinor emphasised the effects of a troubled six months for all investors and particularly for those investing in smaller growth companies which comprise the Kingfish investment portfolio.
“Kingfish reported a relatively robust NAV performance for the six months to September 2007 but the following six months presented a challenging market environment with particularly volatile financial markets impacted by the worldwide credit crunch, finance company woes and a strong NZ dollar affecting many companies in many sectors,” said Mr Challinor. “This has been the most challenging period in our four year history, with the last six months reinforcing just how quickly market sentiment can change.”
Kingfish portfolio stocks to suffer the most were those exposed to the strong New Zealand dollar, such as Pumpkin Patch, Rakon and Comvita while other portfolio companies suffered share price falls despite their underlying businesses remaining sound. Since March 31, a number of the portfolio company share prices have rebounded as the tone of the New Zealand share market, and indeed world markets, has improved.
Importantly, the Manager, Fisher Funds, remains confident as to the quality and investment prospects of the portfolio companies. Fisher Funds Managing Director Carmel Fisher said “While markets remain volatile, we believe that the worst is behind us and the Kingfish portfolio is in excellent shape despite, or perhaps because of, the performance over the last year.”
The difficult share market environment saw the Kingfish share price perform badly during the twelve months, resulting in what Fisher described as an attractive buying opportunity. The Kingfish share price at 31 March 2008 traded at $1.02, representing a 25% discount to the net asset value. Fisher said “We believe the current discount is excessive and effectively represents a double discount in that the underlying portfolio companies have been oversold and now represent good value, and then the Kingfish share price has been oversold on top of that.”
The Kingfish Board underscored its cautiously optimistic outlook by announcing a 28% lift in the final dividend to 4.5 cents per share.
This tax exempt dividend will be paid to all eligible shareholders on 20 June 2008. The record date for the dividend is 5pm Friday 06 June 2008.
Mr Challinor said Kingfish has a long-term investment objective and that despite an unsatisfactory short-term performance, the NAV had grown 39% over four years and accumulated dividends of 15 cents per share have been paid.
“The nature of Kingfish as a listed investment company is that its portfolio returns, and therefore its share price over time, will more likely reflect the performance of the individual portfolio companies than the market overall.
“Our manager has a ten year history of selecting quality growth companies and, as the investment environment recovers, we believe the net asset value will again experience the growth that investors have come to expect of Kingfish.”
The Annual Report to shareholders will be sent by early June. Investors are encouraged to register for regular email updates on the Kingfish Limited web site, www.kingfishlimited.co.nz.
Overview of Kingfish Limited
Kingfish Limited is a listed investment company that invests in New Zealand companies. The Kingfish investment portfolio is managed by Fisher Funds Management Limited, a specialist New Zealand investment manager with a track record of successfully investing in smaller company shares. The Company was listed on the New Zealand Exchange in March 2004 following a successful $58.4 million IPO. For each $1 Kingfish share issued, subscribers received one option (warrant) to subscribe for an additional share at $1, exercisable at the end of either March 2006, 2007 or 2008. All Kingfish warrants have now lapsed or been exercised. Kingfish provides investors with an opportunity to invest in a diversified portfolio of investments through a single company. Kingfish may invest in small companies that are listed on the NZSX, NZAX and unlisted small companies.
Robert L Challinor
21 May 2008