BRM – September 2021 Quarterly Newsletter

Strong financial results reported by our portfolio companies during reporting
season underpinned Barramundi’s +8.1% (gross performance) return over
the quarter. This is well ahead of the benchmark ASX200 Index (70% hedged
into NZ$) which returned +0.9%.
Below we discuss three key themes that helped drive our portfolio returns in
the quarter. A striking feature of these themes is that our portfolio companies
are focussed on doing well over the long-term. As long-term investors this
pleases us. Some companies like Domino’s and Wisetech are profiting now
from planning and decisions made years ago. Other companies, like CSL,
are having a tougher time because of COVID-19. But they’re still investing in
innovation. They will likely reap the rewards from this in the future.

Theme 1: Businesses are increasingly relying on
software and internet services in order to stay ahead
of the competition
Wisetech was the standout in our portfolio in this regard. Its share price rose
+68% (in A$) over the period on the back of its outstanding financial result.
Wisetech’s pre-tax profits rose over +60% compared to last year. Wisetech is
the global leader in providing software to logistics companies such as DHL or
Mainfreight.
Demand for this software has risen strongly because it enables these
companies to automate logistics processes for their clients. This substantially
increases the efficiency of these businesses. This has led to Wisetech’s core
revenue growth increasing +25% over the year. The big positive surprise
for investors has been how much faster Wisetech’s profits grew relative to
revenue. Wisetech has spent a lot developing its software over the years. It is
now at a point where customers can use its software more (and pay Wisetech
more) without Wisetech having to hire a lot of extra people to support this
additional use. This is what we refer to as a ‘scale benefit’. And this has led to
the large increase in profits in the year.
We also saw this theme of rising demand for software or internet services
through the results of other portfolio companies as well.
Fineos (+11%) is seeing rising demand from accident, life and health insurers
globally to automate and digitise their insurance claims procedures with
Fineos’ software.
Online car advertising company Carsales (+29%) announced that it was
expanding its offering for car dealerships. Carsales currently advertises vehicles
for sale on behalf of dealers. Potential buyers usually complete the purchase
and pick up the car at the dealership. Carsales is now enabling dealers to
literally sell cars on the Carsales website. Customers will soon be able to look
for a car, secure finance for it, pay for it and have it delivered directly to them.
The entire transaction will take place on the website. This innovation increases
Carsales’ runway for growth.
Theme 2: People crave take-aways during lockdown!
Customers have bought a lot of pizza from Domino’s (+34%) in the last year.
Domino’s is reinvesting its profits from these pizza sales in rolling out new
stores. It has increased its long-term store target and will double the number
of stores it has across the countries it serves. It is accelerating the speed with
which these stores are opened, boosting its overall growth rate.
Theme 3: Innovation is the foundation to profit
growth in the future
Our investment philosophy is centred on investing in high quality and growing
businesses. The amount that a business spends on research and development
(“R&D”) is one indicator of whether a company is putting itself in a position
to grow. This is particularly important in the information technology or
healthcare arenas. Better software helps companies adapt more efficiently
to the digital world. Clients are always looking for better vaccines to improve
their lives.
R&D is akin to planting and watering an orchard of fruit tree seedlings for
these companies. Not all of the trees will survive. But if it’s well looked after,
the orchard is likely to bear fruit in the future.
Wisetech for example routinely spends 30% of revenue each year in R&D.
This has undoubtedly contributed to its success over the years.
PWR Holdings (+25%) financial results also highlighted how it is benefiting
from investing in innovation. PWR makes cooling products for formula one
and super luxury cars. Its emerging technology division has been at the
forefront of developing cooling products for companies ranging from those
making electric vehicles to hydrogen powered trucks. It is also designing
solutions for companies developing the first electric helicopters. This has
resulted in the emerging technology division doubling its revenue in the last
year. And it is likely to double again in the next few years.
It was also pleasing to us how portfolio companies that have been negatively
impacted by the pandemic have kept investing in R&D. They have not
skimped despite the COVID-19 uncertainty.
Plasma products company CSL (+3%) for example still spent 10% of
revenues or $1bn this last year on R&D. It spent this money despite the
fact that the amount of blood people have been willing to donate has been
hampered by COVID lockdowns. Nanosonics (+8%) similarly, spent over
15% of its revenue on R&D despite pandemic related hospital restrictions
impacting demand for its ultrasound disinfectant products.
This investment and long-term focus improves these companies’ chances
of staying ahead of the competition. This increases our confidence in their
ability to grow profits and deliver ‘fruit’ to their shareholders in the future.

Portfolio changes over the September quarter
Given the themes discussed above, we have increased our portfolio
weighting in software companies such as Wisetech, Fineos, and Audinate
(+23%), as well as data centre operator Next DC (+1%).
We increased our weighting in ANZ (0%), NAB (+6%) and Westpac
(+1%). The economic environment is significantly better than what was
feared a year ago. The banks have consequently begun buying back their
shares and increasing dividends. This is supportive for their share prices.
We also increased our weighting in outdoor advertising company
oOH!Media (+1%). It sells a lot of advertising on billboards in NSW and
Victoria. Our confidence in its earnings outlook has increased as these states
are soon set to emerge from pandemic related lockdowns in October.
To partially fund these changes we reduced our weighting in Sonic
Healthcare (+7%) and Woolworths (+5%). We also reduced our
positioning in SEEK (-6%).
1
¹ Share price premium to NAV (including warrant price on a pro-rated basis and using NAV to four decimal places)
1 July 2021 – 30 September 2021
Warrant Price
$
0.3 0
$
1.0 1
Share Price
BRM NAV
$
0.9 1
as at 30 September 2021
QUARTERLY NEWSLETTER
PREMIUM
1
18.7
%
Robbie Urquhart
Senior Portfolio Manager
Fisher Funds Management Limited
15 October 2021

PERFORMANCE
as at 30 September 2021
3 Months
3 Years
(annualised)
5 Years
(annualised)
Company Performance
Total Shareholder
Return
(7.3%)+29.8%+21.9%
Adjusted NAV Return +7.1%+18.7%+15.8%
Portfolio Performance
Gross Performance
Return
+8.1%+22.3%+19.2%
Benchmark Index¹+0.9%+9.4%+10.7%
1
Benchmark Index: S&P/ASX Small Ords Industrial Gross Index until 30 September 2015 & S&P/
ASX 200 Index (hedged 70% to NZD) from 1 October 2015
Non-GAAP Financial Information
Barramundi uses non-GAAP measures, including adjusted net asset value, adjusted NAV return, gross performance
return and total shareholder return. The rationale for using such non-GAAP measures is as follows:
»adjusted net asset value – the underlying value of the investment portfolio adjusted for capital allocation
decisions after expenses, fees and tax,
»adjusted NAV return – the return to an investor after expenses, fees and tax,
»gross performance return – the Manager’s portfolio performance in terms of stock selection and currency
hedging before expenses, fees and tax, and
»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.
All references to adjusted net asset value, adjusted NAV return, gross performance return and total shareholder
return in this newsletter are to such non-GAAP measures. The calculations applied to non-GAAP measures are
described in the Barramundi Non-GAAP Financial Information Policy. A copy of the policy is available at
http://barramundi.co.nz/about-barramundi/barramundi-policies/
Company% Holding
Ansell3.1%
ANZ Banking Group4.3%
AUB Group4.1%
Audinate Group2.0%
Brambles3.8%
Carsales7.0%
Commonwealth Bank5.5%
Credit Corp3.4%
CSL8.1%
Domino's Pizza3.2%
Fineos Corporation Holdings3.6%
Nanosonics2.3%
National Australia Bank4.6%
NEXTDC4.3%
Ooh! Media2.5%
PWR Holdings2.5%
REA Group3.6%
ResMed3.8%
SEEK5.2%
Sonic Healthcare1.9%
Westpac4.5%
Wise Tech Global7.5%
Woolworths Group3.1%
Xero Limited4.7%
Equity Total98.6%
Australian cash0.4%
New Zealand cash1.1%
Total cash1.5%
Centrebet Rights0.0%
Forward foreign exchange contracts(0.1%)
Total 100.0%
PORTFOLIO HOLDINGS
SUMMARY
as at 30 September 2021
COMPANY NEWS
Dividend Paid 24 September 2021
A dividend of 1.69 cents per share was paid to Barramundi
shareholders on 24 September 2021, under the quarterly
distribution policy. Interest in Barramundi’s dividend
reinvestment plan (DRP) remains high with 36% of
shareholders participating in the plan. Shares issued to DRP
participants are at a 3% discount to market price. If you
would like to participate in the DRP, please contact our share
registrar, Computershare on 09 488 8777.
Disclaimer: The information in this newsletter has been prepared as at the date noted on the front page. The information has been prepared as a general summary of the matters covered
only, and it is by necessity brief. The information and opinions are based upon sources which are believed to be reliable, but Barramundi Limited and its officers and directors make no
representation as to its accuracy or completeness. The newsletter is not intended to constitute professional or investment advice and should not be relied upon in making any investment
decisions. Professional financial advice from a financial adviser should be taken before making an investment. To the extent that the newsletter contains data relating to the historical
performance of Barramundi Limited or its portfolio companies, please note that fund performance can and will vary and that future results may have no correlation with results historically
achieved.
Barramundi Limited
Private Bag 93 502, Takapuna, Auckland 0740, New Zealand
Phone: +64 9 489 7074 | Fax: +64 9 489 7139
Email: enquire@barramundi.co.nz | www.barramundi.co.nz
If you would like to receive future
newsletters electronically please email
us at enquire@barramundi.co.nz
FOREIGN TAX COMPLIANCE ACT (FATCA) AND COMMON
REPORTING STANDARD (CRS)
As a result of the New Zealand Government agreeing to participate in the exchange of information with other jurisdictions under
the Foreign Tax Compliance Act (FATCA) and Common Reporting Standard (CRS), Financial Institutions are required to undertake
due diligence to determine the account holders’ jurisdiction of tax residence. All shareholders will have received a Tax Residency
Self-Certification form from Computershare depending on when they first purchased their securities. Please ensure you complete
and return this important document if you have not already done so. For more information please visit the IRD website: https://
www.ird.govt.nz/international-tax/exchange-of-information/crs/registration-and-reporting or contact Computershare if you are
unsure of whether you have completed your form.
SIGNIFICANT RETURNS IMPACTING
THE PORTFOLIO DURING THE
QUARTER IN AUSTRALIAN DOLLARS
WISETECH
+68
%
DOMINO’S PIZZA
+34
%
CARSALES.COM
+29
%
PWR
HOLDINGS
+25
%
AUDINATE
+23
%