Kingfish beat benchmark by 7.5pp but H2 NPAT swung to -$2.0m

Portfolio total return was 8.9% against the benchmark's 1.4%, a 7.5pp gross outperformance.

The shape of the year was unusual. HY25 NPAT was $42.8m, so the implied second-half result was approximately -$2.0m. Management commentary notes that "momentum waned in the final quarter" as expectations for an economic recovery were pushed out.

Net assets attributable rose 2.7% to $469.9m. NTA per share moved only marginally to $1.35 from $1.34. Against Annolyse's historical baseline, that $1.35 sits at the lower edge of the four-year range ($1.34-$1.77, mean $1.52). Full-year dividends paid were 11.08cps (+8.6%), with a final dividend of 2.75cps versus 2.65cps.

The 7.5pp portfolio-versus-benchmark gap is the cleanest read on manager skill in the period, and it explains why ROE rose to 8.7% from 4.3%. However, NTA per share of $1.35 against a four-year mean of $1.52 indicates the portfolio is still well below historical levels. For a long-only NZ equity vehicle, relative outperformance in a flat market does not, by itself, rebuild unit value.

The result was entirely first-half. Full-year NPAT of $40.8m is lower than the $42.8m reported at HY25, which means H2 generated roughly -$2.0m. That is not catastrophic in absolute terms, but it removes the trend support that the headline 105.0% NPAT growth implies. Investors reading only the full-year number would miss that the second half went backwards.

Distribution policy continues to lean on the portfolio, not income. Investment income (interest and dividends) was roughly $10m in FY24 and is not separately disclosed for FY25, while distributions paid in the prior year were $23.0m. The dividend remains funded primarily by realised and unrealised portfolio gains rather than underlying yield, so distribution sustainability is tied to forward portfolio performance.

Against the implicit benchmark (S&P/NZX50G dividend-inclusive), the 7.5pp gross outperformance is a clear positive read; against historical NTA shape, the result is below mean.

The half-on-half pattern matters most for the read. With HY25 already at $42.8m, any reader extrapolating first-half momentum would have been wrong; the FY25 outturn supports neither a continuation of H1 strength nor a clear stabilisation, because management itself flags fading momentum into year-end.

On that frame, the FY25 result is driven by fair-value movements rather than recurring income: revenue of $48.2m versus prior-year investment income near $10m points to the bulk of the uplift coming from portfolio appreciation rather than dividends and interest. That is normal for the vehicle but not durable in the way recurring yield would be.

The reversal in H2 NPAT to roughly -$2.0m reinforces that read. The same portfolio that delivered $42.8m in six months gave a portion back in the next six. Investors should treat the 105.0% NPAT growth as a point-in-time mark on portfolio carrying values, not as a run-rate.

Balance sheet flexibility improved on the margin: cash rose to $15.3m from $4.9m and total liabilities fell to $0.7m. Net assets of $469.9m sit $24.1m below the four-year mean of $494.0m, so capital preservation, not growth, remains the operative story.

This briefing cannot assess the underlying holdings, sector positioning, or realised-versus-unrealised split because the supplied disclosures do not break the portfolio return into those components.