Chairman’s Review Rob Challinor July 2007 Chairman’s Review To 31 March 2007: • Total surplus of $36.8 million after tax • Net Asset Value up 35% to $2.15 • Total assets of $138 million • NAV increase of 35% vs. 15% benchmark increase • Combined market value of shares and warrants 98% above the issue price • Fully imputed dividends paid: – June 2006 2.5cps August 2006 2.5cps Chairman’s Review Update since balance date
30 June 2007 Net Asset Value (NAV) -7% Diluted NAV -1% NAV change versus -7% Benchmark +4% Share Price +4% Warrant Price +8% Dividends Paid 3.5cps Dividends Reinvested (value) 40% Chairman’s Review
Net Asset Value Mar 04 – Jun 07
2.30
2.10
1.90
1.70
1.50
1.30
1.10
0.90
0.70
De Ma J 0.50 M M M Ju S un Ju Se De J Se De n e r- a a u a - p c- - r n p c- r n p c r 0 -0 0 0 07 -0 -0 -04 0 -05 -0 -0 -0 -06 6 6 6 7 4 4 4 5 5 5 Share Price, Combined Share and Warrant Price performance
Share & Warrant Price Share Price
$2.20
$2.00
$1.80
$1.60
$1.40
$1.20
$1.00
$0.80 Mar-04 Sep-04 Mar-05 Sep-05 Mar-06 Sep-06 Mar-07 Warrant Price Performance
$0.70
$0.60
$0.50
$0.40
$0.30
$0.20
$0.10 Mar-04 Sep-04 Mar-05 Sep-05 Mar-06 Sep-06 Mar-07 Diluted Net Asset Value
NAV $ NAV per share Net Asset Value 30 June 2007 130.5m $2.00
Warrants exercisable 31 March 2008 47.1m -
Diluted Net Asset Value 177.6m $1.58 Share Price 30 June 2007 - $1.56 Discount to Net Asset Value - 1.3% Share Price Premium/(Discount) to Diluted NAV
30%
20%
10%
0%
-10%
-20%
-30% Mar-04 Sep-04 Mar-05 Sep-05 Mar-06 Sep-06 Mar-07 Share & Warrant Buybacks
Number Cost ($) Share Buybacks Nov 2005 to 30 June 2007 2,982,000 3.2m
Reissued – for Manager’s Performance Fees and 2,950,000 4.6m Dividend Reinvestments Balance held as Treasury Stock at 30 June 2007 32,000 $(1.3m)
Warrants acquired and cancelled 6,086,000 1.8m
Diluted Net Asset Value per Share - without warrant buyback $1.5670 - with warrant buyback $1.5812 Portfolio Investment Entity
• What is it? – Legislation, commencing 1 October 2007, changes the way managed funds (including Listed Investment Companies) are taxed – Removes tax disadvantages to those investing in managed funds and leaves the investor in the same (or better) position whether they invest in equities directly or via a managed fund Portfolio Investment Entity
• Key Benefits to Kingfish: – Kingfish no longer be taxed on capital gains on sale of investments in Kingfish Nursery. – As a PIE, will be able to distribute capital gains tax free to shareholders. – Distributions to shareholders will be exempt income for income tax purposes. – The ability to simplify the legal and reporting structure of the Group which will result in lower costs. Manager’s Report Carmel Fisher Fisher Funds July 2007 Agenda
• Review of March 2007 year • Review since balance date • What’s new with our Kingfish companies • Outlook The Year to March 2007
Highlights Lowlights • Identifying and investing in IPO • Increasingly challenging stars Rakon and Delegat’s environment for most of our • Delivery against expectations companies by core holdings RYM, MET, MFT • Closed discount between share price and NAV • Continued strong performance for third year • Impending tax changes • Future benefits of KiwiSaver Contributors to NAV Growth
Comvita, 0.7% Pumpkin Patch, 1.0% Kidicorp, 0.4% Delegats, 1.1% Michael Hill, 2.4%
Freightways, 2.4% Ryman, 14.7% NZ Exchange, 5.5%
Metlifecare, 6.7% Mainfreight, 10.8% Since balance date
Total Returns April 07 - 30 June 2007
50.0% 42.3%
40.0% 35.7%
30.0%
19.8% 20.0% 16.2% e g an h c
10.4% e c 10.0% i r 4.1% e P ar 1.4% -0.8% -9.7% -11.9% -22.6% h
S 0.0%
S S N M M R M R F D P o e Z a y r e u f a et ic k ai m e l m tw le E li h o n ig e -10.0% a g x fe a n fr a h g p r s c c e e n tw a kin e h a l H ig ts a re h a P n ill t ys a ge t ch -20.0%
-30.0% Stock Since balance date
Contribution per Stock 1 April 07 - 30 June 2007
2.5%
2.0% 1.9%
1.5%
0.9% 1.0% 0.9% 0.4% 0.4% ) 0.5%
% 0.2%
( 0.2%
on -0.2% -0.9% -2.2%
i -0.4% t 0.0% bu i r nt M N M S R M S R D F P o e Z i o a a e y e re u C c f a m m -0.5% tli E h tw ko in le le ig fe x a a n fr g a g h p c c e r e s n a tw ki a h l H e ig ts n re a h a P n ill t ys a -1.0% ge t ch
-1.5%
-2.0%
-2.5% Stock Kingfish Company Update
• Good profit results from Ryman, Mainfreight, Rakon, NZX, but … • Negative news flow – Profit downgrade from Pumpkin Patch; – Lower than expected 2007 harvest for Delegat’s – Rakon and Delegat’s share prices reflecting currency concerns – Profit downgrade from Comvita • Takeover offers for Kidicorp and Software of Excellence • Entering the information “black hole” for three months (except Mainfreight & Ryman AGMs) • No new portfolio additions on immediate horizon • No exits expected either Our thoughts
• We firmly believe we own New Zealand’s best listed growth stocks • We are confident that the executives of our companies will make the right “macro” decisions • We believe it important to focus on our companies’ achievements rather than on the mood of the market • Our best “value-add” is our extensive company visit schedule, and relationships with corporate New Zealand Our thoughts
• The two main components of our investments success are the stock selection and portfolio composition • The PIE regime will be beneficial as we can more actively manage portfolio composition • Our stock selection processes have not and will not change • The regulatory and tax environment is positive for the market – we just need more companies! Outlook
• Currency will remain an issue • Execution of international expansions and growth strategies remains critical • Market dominance/competitive advantage/strong brands become more important in difficult environment • As always, our performance will be dictated by the performance of our underlying companies Thank you Questions Kingfish Proxy Summary
Resolution For Against Discretionary Abstain Total
1. Re-elect Annabel 2,841,602 511 4,378,796 - 7,220,909 Cotton
2. Re-appointment 2,824,257 62,366 4,396,652 - 7,220,909 of PWC and fix auditors remuneration