New Zealand Professional Investment Services Firm, Forsyth Barr

Forsyth Barr

New Zealand Professional Investment Services Firm

We are proud to be a New Zealand owned firm, with 21 offices throughout the country and over 300 employees. We assist personal, institutional and corporate clients providing a full range of investment services.

Forsyth Barr is a foundation New Zealand Exchange firm (NZX) and accredited market participant. We have been confirmed by the Financial Markets Authority as a Qualifying Financial Entity (QFE).

Research is the cornerstone of our advice. We have one of New Zealand's leading teams of analysts. Our global affiliations ensure comprehensive research coverage of all major investment markets.

Equity Bottom-Up

Fonterra Shareholders Fund / Equity Bottom-Up

Fonterra Cooperative Group Ltd is a New Zealand multinational dairy co-operative and its farmer shareholders are the suppliers of milk to Fonterra in New Zealand. The Company operates Fonterra Shareholders' Fund, which provides additional financial flexibility for farmer shareholders who would have the opportunity to sell economic rights of shares to the fund.

<ul><li>Fonterra (FSF) reported a strong FY23 result, slightly ahead of expectations and a record for the co-op.</li><li>The strength in the result was, as expected, in its Ingredients division —​​​​​​​ driven by favourable stream returns as has been the case for the last two years. </li><li>While stream returns are volatile and unlikely to be sustained in future periods, we think it is important to step back and acknowledge this is record earnings for the co-op, and its total dividend of NZ50cps (final dividend of NZ40cps) is also a record. </li></ul>

Fonterra (FSF) reported a strong FY23 result, slightly ahead of expectations and a record for the co-op.The strength in the result was, as expected, in its Ingredients division —​​​​​​​ driven by favourable stream returns as has been the case for the last two years. While stream returns are volatile and unlikely to be sustained in future periods, we think it is important to step back and acknowledge this is record earnings for the co-op, and its total dividend of NZ50cps (final dividend of NZ40cps) is also a record. 

Fonterra - FY23 Result — Milking Record Profits

Kathmandu Holdings Ltd. provides clothing and equipment for the travel and adventure market. The Company operates retail locations throughout Australia and New Zealand.

<ul><li>KMD Brands (KMD) released a marginally weaker FY23 result versus our and consensus estimates, with underlying EBITDA (pre-IFRS 16) at the lower end of the guidance range.</li><li>While there were a few bright spots, the backdrop and outlook was negative on balance. KMD reported consumer demand challenges, cost pressures, and an underwhelming August 2023 trading which was broadly in line with retailer peers.</li><li>Positives in this result included (1) better than expected FY23 gross margins (though this was offset by higher opex), (2) improvement in working capital management, and (3) cost-out initiatives, which are expected to deliver savings in FY24. </li></ul>

KMD Brands (KMD) released a marginally weaker FY23 result versus our and consensus estimates, with underlying EBITDA (pre-IFRS 16) at the lower end of the guidance range.While there were a few bright spots, the backdrop and outlook was negative on balance. KMD reported consumer demand challenges, cost pressures, and an underwhelming August 2023 trading which was broadly in line with retailer peers.Positives in this result included (1) better than expected FY23 gross margins (though this was offset by higher opex), (2) improvement in working capital management, and (3) cost-out initiatives, which are expected to deliver savings in FY24. 

Fisher & Paykel Healthcare Corp / Equity Bottom-Up

Fisher & Paykel Healthcare Corporation Limited designs, manufactures and markets heated humidification products and systems for use in respiratory care and the treatment of sleep apnea.  The Company also offers patient warming and neonatal care products, including warming products and infant resuscitators.

<ul><li>We walk away with three key takeaways from F&amp;P Healthcare’s (FPH) 2023 investor day.</li><li>(1) The long-term growth runway remains strong and FPH continues to be well positioned, (2) the gross margin recovery back to FPH’s 65% target will take time, and (3) COVID-19 is no silver bullet, company commentary and industry insights highlight high flow adoption is taking place but there is unlikely to be a step change in clinical practice change and growth, with FPH needing to continue to invest to grow.</li><li>There was little information in the investor day to fundamentally change our view on the outlook, and, if anything, reinforces the significant opportunity ahead. </li></ul>

We walk away with three key takeaways from F&amp;P Healthcare’s (FPH) 2023 investor day.(1) The long-term growth runway remains strong and FPH continues to be well positioned, (2) the gross margin recovery back to FPH’s 65% target will take time, and (3) COVID-19 is no silver bullet, company commentary and industry insights highlight high flow adoption is taking place but there is unlikely to be a step change in clinical practice change and growth, with FPH needing to continue to invest to grow.There was little information in the investor day to fundamentally change our view on the outlook, and, if anything, reinforces the significant opportunity ahead. 

F&P Healthcare  - Investor Day — Repeat Flow Up to NEUTRAL

Warehouse Group Limited / Equity Bottom-Up

The Warehouse Group Limited operates general merchandise and stationery supply retail stores throughout New Zealand.

<ul><li>We expect The Warehouse Group (WHS) will report materially weaker performance in its FY23 result, due on 28 September 2023.</li><li>WHS has not provided revenue or earnings guidance for the full year, but we expect cost pressures and a challenging consumer demand environment have been significant headwinds.</li><li>Trading updates from key retailer peers continue to highlight difficult near-term conditions, with no signs of easing. We reduce our earnings expectations primarily for cost pressures. </li></ul>

We expect The Warehouse Group (WHS) will report materially weaker performance in its FY23 result, due on 28 September 2023.WHS has not provided revenue or earnings guidance for the full year, but we expect cost pressures and a challenging consumer demand environment have been significant headwinds.Trading updates from key retailer peers continue to highlight difficult near-term conditions, with no signs of easing. We reduce our earnings expectations primarily for cost pressures. 

The Warehouse Group - Checking Out the Competition

Infratil Limited is an infrastructure investment company. The Company invests in airports, energy such as renewable and waste-energy, and public transportation.

<ul><li>We walk away from Infratil's (IFT) Longroad investor day with three main takeaways. (1) Its target to deliver ~1.5GW annually over the next four to five years seems highly credible.</li><li>Pipeline for 2024 and 2025 is ahead of target and 1.5GW seems more of a choice not to overextend than the stretch target we initially viewed it as.</li><li>(2) On top of the base investment tax credit, Longroad is likely to access a meaningful level of additional credits, which could be worth up to high, single digits, additional IRRs on some projects. </li></ul>

We walk away from Infratil's (IFT) Longroad investor day with three main takeaways. (1) Its target to deliver ~1.5GW annually over the next four to five years seems highly credible.Pipeline for 2024 and 2025 is ahead of target and 1.5GW seems more of a choice not to overextend than the stretch target we initially viewed it as.(2) On top of the base investment tax credit, Longroad is likely to access a meaningful level of additional credits, which could be worth up to high, single digits, additional IRRs on some projects. 

Infratil - The Longroad to Value Realisation Is Heating Up

Forsyth Barr
New Zealand Professional Investment Services Firm

Fonterra - FY23 Result — Milking Record Profits

The strength in the result was, as expected, in its Ingredients division — driven by favourable stream returns as has been the case for the...

Forsyth Barr

KMD Brand - Hatches Battened

KMD Brands (KMD) released a marginally weaker FY23 result versus our and consensus estimates, with underlying EBITDA (pre-IFRS 16) at the lower end...

Forsyth Barr

F&P Healthcare - Investor Day — Repeat Flow Up to NEUTRAL

There was little information in the investor day to fundamentally change our view on the outlook, and, if anything, reinforces the significant...

Forsyth Barr

The Warehouse Group - Checking Out the Competition

We expect The Warehouse Group (WHS) will report materially weaker performance in its FY23 result, due on 28 September 2023.

Forsyth Barr

Infratil - The Longroad to Value Realisation Is Heating Up

We walk away from Infratil's (IFT) Longroad investor day with three main takeaways. (1) Its target to deliver ~1.5GW annually over the next four to...

Forsyth Barr

Fonterra - FY23 Result — Milking Record Profits

The strength in the result was, as expected, in its Ingredients division —​​​​​​​ driven by favourable stream returns as has been the case for the...

Forsyth Barr

KMD Brand - Hatches Battened

KMD Brands (KMD) released a marginally weaker FY23 result versus our and consensus estimates, with underlying EBITDA (pre-IFRS 16) at the lower end...

Forsyth Barr

F&P Healthcare - Investor Day — Repeat Flow Up to NEUTRAL

There was little information in the investor day to fundamentally change our view on the outlook, and, if anything, reinforces the significant...

Forsyth Barr

The Warehouse Group - Checking Out the Competition

We expect The Warehouse Group (WHS) will report materially weaker performance in its FY23 result, due on 28 September 2023.

Forsyth Barr

Infratil - The Longroad to Value Realisation Is Heating Up

We walk away from Infratil's (IFT) Longroad investor day with three main takeaways. (1) Its target to deliver ~1.5GW annually over the next four to...

Forsyth Barr

The strength in the result was, as expected, in its Ingredients division — driven by favourable stream returns as has been the case for the...