June 2012 QUARTER UPDATE

FISHER FUNDS’ QUARTERLY PORTFOLIO REVIEW The ongoing European debt crisis, slowing Chinese economic growth rates and a stuttering AT A GLANCE US economy taken together generally do not make a favourable back-drop for equities. Notwithstanding this, a hand-picked portfolio of quality companies can still perform well and NAV $1.09 this is what we have seen with the Kingfish portfolio in recent times. DILUTED NAV $1.05 SHARE PRICE $0.96 The Kingfish unaudited NAV was up slightly for the June 2012 quarter (0.3%), a much better result than the broader market (NZ50G -3.1%), and well ahead of most major equity markets around the world which fell heavily (i.e. some by double digits). Generally speaking, the equity market has been a resilient market, and the Kingfish portfolio in turn has 1 outperformed the broader New Zealand equity market.

Portfolio Holdings 2012 30 JUNE UPDATE limited kingfish Although the New Zealand economy has still to fire, the underlying trend is one of slow and Summary as at gradual improvement. This has flowed through to portfolio companies that reported for the 30 JUnE 2012 year ended March, which generally came through the results round well (, , , and Wakefield Health). Fisher & Paykel Healthcare was the exception, Listed Companies % Holding with guidance that disappointed the market. The NZ$/US$ currency headwind is affecting Abano Healthcare 2.0% F&P Healthcare’s New Zealand domiciled earnings, although on a constant currency basis, the Delegat’s 2.3% company is trading strongly (profit up 23%). Fisher & Paykel Healthcare 4.0% Companies that have exposure to the slowing Australian economy have had mixed results Freightways 8.4% recently. Our retailers have been adversely affected, but companies like Mainfreight, Infratil 6.1% Freightways and Delegats’ have continued to do well in that marketplace. Kathmandu 2.6% Mainfreight 13.2% 5.6% PERFORMANCE Michael Hill 3.6% Three Since NZX 7.8% Months Inception Opus International 3.7% * Kingfish Gross NAV +0.3% +62.1% 1.2% Relative Performance Pumpkin Patch 2.1% NZ50 Gross Index (NZ50G) -3.1% +31.1% Ryman Healthcare 15.2% TV 2.9% NZX Mid Cap Gross Index (NZSEMCG) +1.2% +55.4% Summerset Group 2.1% * Total Shareholder Return +5.7% +51.2% TOWER 3.1% TradeMe 2.9% Wakefield Health 1.8% NOTABLE SHARE PRICE MOVEMENTS IN THE QUARTER (from Bloomberg) Non-listed Companies Waterman Holdings 1.0% Equity Total 91.6% New Zealand dollar cash 8.4% TOTAL 100.0% 14% 13% 12% -19% -14%

Total Shareholder Return* New website Distributions Total Shareholder Return* Share Price The new Kingfish website went live $1.90 $0.050 in June. It has a refreshed look and $0.045 $1.70 improved layout making it even $0.040 $1.50 $0.035 easier to navigate. The website $1.30 $0.030 share is updated regularly, with the

$0.025 per $1.10 latest news and views, portfolio ret u rn $0.020 $0.90 $0.015 developments, performance data

$0.010 D i v idends and presentations, as well as $0.70 $0.005 $0.50 0 regular reporting, factsheets and information about Kingfish. Jul 10 Jul 09 Jul 08 Jul 07 Jul 06 Jul 05 Jul 04 Jan 11 Jan 10 Jan 09 Jan 08 Jan 07 Jan 06 Jan 05 Jun 12 Jun 11 Oct 10 Oct 09 Oct 08 Oct 07 Oct 06 Oct 05 Oct 04 Apr 11 Apr 10 Apr 09 Apr 08 Apr 07 Apr 06 Apr 05 Sep 11 Dec 11 Mar 12 Mar 04

*Assumes all dividends are reinvested. Excludes imputation credits. **Accumulated performance since inception. Portfolio REVIEW STRATEGY & OUTLOOK Opus International Consulting won a major contract in the UK Our strategy of hand-picking a portfolio of quality companies, and this contract should turn-around what has been a loss-making with strong ‘moats’ around their businesses, with good balance division of Opus. The company currently has around $50m of sheets and strong free cash-flows remains unchanged. The net cash and is looking to expand offshore through acquisitions. STEEPP process focuses on companies that have a history Progress has been slow but this initiative is a major opportunity of earnings which means that from time to time we miss for the company. 90% of its profits still come from its New Zealand companies that have exhibited strong growth but have yet to operations which continue to hold strong market positions. achieve profitability. The flip side of this is that we also miss many more companies that in fact never achieve profitability, We were active in getting a better deal for shareholders in erode precious capital along the way, and have a resulting poor Metlifecare than that which was originally proposed through the share price performance. merger with Vision Senior Living and Private Life Care. While the terms of the merger with Vision Senior Living in particular were Some shareholders will be wondering if Kingfish will be substantially improved, we still believe the final merger proposal participating in the upcoming sale of SOE’s, starting with was not in shareholders’ best interests and we voted accordingly. Mighty River Power later this year. Whilst we will wait until We have subsequently decreased our holding in the company. On examining each prospectus before making a final decision, a more positive note, Ryman Healthcare posted its 10th straight these assets have stable, utility-type earnings which are unlikely earnings increase during the quarter, a remarkable achievement to be strong enough to make it through our STEEPP selection which is emulated by very few companies anywhere. Ryman process. Shareholders may wish to examine these investment Healthcare is increasing its build rate to accommodate latent opportunities as part of their wider portfolio. 2

demand for its villages and is building its first village in Australia. 2012 30 JUNE UPDATE limited kingfish Summerset Group has also been trading well this year, with sales of new units and re-sales of existing units well ahead of the comparable period last year. NZX will be a major beneficiary of the partial sale of State Owned Enterprises (SOE) and the listing of non-voting units. The SOE listings have the potential to rejuvenate the local equity Carmel Fisher Murray Brown market, albeit it will be biased towards ‘gentailers’. MANAGING DIRECTOR SENIOR PORTFOLIO MANAGER 26 July 2012 26 July 2012 Deal activity within Abano Healthcare in the last few years has been one of divestments (and capital repayment), so it is good to see the company increase its holdings in its Australian dental operations to 100%. Abano has acquired the 30% balance of Company News shares in Dental Partners that it did not already own for A$14m. DIVIDEND PAID 29 JUNE 2012 consummated a couple of useful transactions during the quarter. Firstly, it has entered into an agreement with A dividend of 2.21 cents per share was paid to Kingfish ChannelAdvisor, a global e-commerce platform provider for shareholders on 29 June 2012, under the quarterly online retailers. The deal will enable online retailers outside of dividend policy. The next dividend payment is scheduled New Zealand to list new products on Trade Me. Secondly, it has for September 2012. purchased the balance of vehicle aggregator AutoBase of which it was already a 25% owner. KINGFISH WARRANTS Michael Hill International’s Professional Care Plans has improved 1,066,254 warrants were exercised by warrant holders its cash flow significantly since it began offering the service to on 24 July 2012. If you wish to exercise some or all of customers last year. Sales were also up on the previous year you warrants the final exercise date is 3 September despite a difficult retail environment, particularly in Australia. 2012. Any warrants not exercised by 5pm on 3 Pumpkin Patch and Kathmandu are likely to be similarly impacted September 2012 will lapse and all rights in regard to by the slowdown in Australia although recent very cold weather them will expire. will have boosted Kathmandu’s important winter sale. ANNUAL SHAREHOLDERS MEETING Freightways continues to make bolt-on acquisitions, with HELD 27 JULY 2012 the recent purchase of mailhouse Dataprint New Zealand Kingfish’s Annual Shareholders Meeting (ASM) was held complementing its express package, business mail and at the Ellerslie Event Centre on Friday 27 July 2012. It information management business. was encouraging to hear positive feedback from our PORTFOLIO CHANGES investors and we enjoyed the opportunity to meet with During the quarter we increased our holding in Trade Me to many of you. Three directors’ resolutions were passed around 3% of the portfolio through participating in the Fairfax at the ASM, Carmel Fisher was re-elected as a director Media sell down of its Trade Me stake from 66% to 51%. and Alistair Ryan and Carol Campbell were elected as Subsequent to the end of the quarter we reduced our Metlifecare directors. position to 3% of the portfolio.

Kingfish Limited. PO Box 33 549, Takapuna, Auckland 0740. Phone: +64 9 489 7094. Fax: +64 9 489 7139. Email: [email protected] www.kingfish.co.nz

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 Kingfish 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. To the extent that the newsletter contains data relating to the historical performance of Kingfish 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.