Kingfish lands a big December quarter

Listed investment company Kingfish says its returns have been substantially ahead of its benchmark in the first nine months of trading, but it is warning investors to expect more modest returns going forward.

Thursday, January 6th 2005, 11:52PM

The company's net asset value has increased 26.8% from the $0.9684 raised in the IPO (after issue expenses) to $1.2275 as at 31 December 2004.

"The increase in the value of the company was substantially ahead of the benchmark, which is essentially cash plus 7% per annum," chairman Rob Challinor says.

He warns that the significant broader New Zealand equity market gains enjoyed over the past two years are unlikely to continue at similar rates and investors should anticipate more modest returns in coming periods.

Kingfish's NAV has increased 10.1% in the December quarter.

The combined market value of Kingfish shares and warrants at December 31 for investors who bought in the IPO was $1.29 compared with the issue price of $1.00, representing a 29% gain in nine months.

Currently Kingfish has 16 stocks in its main portfolio, which make up just over 90% of total assets. Core stock holdings are: Freightways, Metlifecare, Waste Management, Pumpkin Patch (which together account for approximately 50% of the investment portfolio) as well as Mainfreight, Michael Hill, Ryman Healthcare, Turners Auctions and Briscoe Group.

The Kingfish Nursery portfolio includes: Comvita, Kidicorp, Just Water, Steel & Tube, NZ Exchange, Pod and Cadmus Technology.
The nursery are companies that have not yet met all the manager's investment criteria in order to become a core holding.

Fisher Funds managing director Carmel Fisher says that about 70% of the overall increase in the NAV in the December quarter came from sizeable gains in the share prices of three stocks in particular: Freightways +18%, Metlifecare +32% and Pumpkin Patch +33%.

Forecast earnings upgrades in the cases of Pumpkin Patch and Freightways drove their respective share price gains while rumoured corporate actions appear to be driving the Metlifecare share price.

"Transaction activity was low during the period although we did add a small holding in Cadmus Technology and completed purchasing small holdings in the NZ Exchange and Pod (formerly Designer Textiles)."

Fisher Funds is continuing to look for suitable new investment opportunities.

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