Kingfish (NZX:KFL) outperformed S&P NZX50G by 13% in CY20

Summary

  • The latest Kingfish Newsletter revealed findings for the quarter from 1st of October to 31st of December 2020.
  • It was revealed that Kingfish grew by 28% for the calendar year 2020, besides, it rose 13% above NZSE50.
  • Kingfish also managed to pay dividend/distribution of 3.46 cents/share to its stakeholders on 18 December 2020, as per its quarterly distribution policy.

The newsletter released by Kingfish Limited (NZX:KFL) on 20 January 2021 for the December quarter shed light on how companies think a robust performance is the most important act in the time of crisis.

During the six-week closed March 2020, the Company asked some basic questions, to its portfolio entities, their clients, competitors, and suppliers, which helped the Company determine its plan of action. The questions asked were:

  • What is the liquidity position of their companies?
  • What safety measures the companies are taking?
  • What is the projected bear, bull, and base results of their revenues and profits among crisis period?
  • What were plans to emerge from the uncertainty sooner and stronger, in comparison to their competitors?

Four different types of units

According to observations made after asking these basic questions, Kingfish was able to determine 4 different types of units.

The first type contains organisations that were right under fire. The Vista Group Limited (NZX:VGL) and Auckland International Airport limited (NZX:AIA) were two such companies, facing cinema closures across the world and border restrictions, respectively.

The second type has companies with a more diligent earnings stream - Ryman Healthcare Limited (NZX: RYM), Summerset Group Holdings Limited (NZX: SUM), and Mainfreight Limited (NZX: MFT) are some of its examples, because they function on the basis of a superior customer service and are linked to the economic cycle in some way or other. This is what enabled them to get back on the track so fast after the COVID-19-related uncertainty, especially in the housing space.

The third type has companies with robust earnings stream -- Firms like Trustpower Limited (NZX:TPW) and Tilt Renewables Limited (NZX:TLT), Vodafone NZ, and Canberra Data Centers fall under this category.

The fourth type has companies that were bound to do well: Fisher and Paykel Healthcare Corporation (NZX:FPH) is known to be one such company. The a2 Milk Company Limited (NZX: ATM) and Delegat were also known to benefit from the COVID-19 situation. Pushpay Holdings Limited (NZX:PPH) also performed unexpectedly well in the situation.

Kingfish also stated companies that had planned ahead, as well as work every day to take a good care of their staff are the kind of companies were going to do well in amid tumultuous times. Also, the companies that are ready to give their customers something extra are the ones, who are going to benefit the most.

Performance during Quarter ending December 2020

Kingfish grew by 28% for the calendar year 2020, besides, it rose 13% above NZSE50.Kingfish portfolio’s Gross Performance Return was +16.4% for the 3 months ending 31 December 2020 while during the same period S&P/NZX50G Index gained +11.4%. The Company’s Total Shareholder Return was noted at +29.2% and Adjusted NAV Return was recorded at +15.7% in the same duration.

Dividend paid as per quarterly distribution policy

On 18 December 2020, Kingfish had paid dividend/distribution of 3.46 cents/share to its stakeholders, as per its quarterly distribution policy. Also, interest in the Company’s dividend reinvestment plan is high, as 43 percent of stakeholders have been taking part in the plan. The securities issues to participants are at a 3 percent lower to the regular market price.

Stock Performance

On 21 January 2021, at the time of writing, Kingfish was trading at NZ$2.080, up by 0.48%.

 


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