The following is a selection of New Zealand companies that we have hand picked
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September 2018
The following is a selection of New Zealand companies that we have hand picked
The a2 Milk Company
a2 sells 'a2'-branded fresh milk and infant milk formula internationally. The company has
developed and patented a range of IP which tests whether cows produce A1-free milk. More
importantly the science behind a2 the company has developed a leading, highly trusted brand
in Australia and China in particular. Annual sales are now approaching $1 billion. We believe
this company for their ability to recognise opportunity and having the strategic vision and
operational smarts to take advantage of it.
Abano Healthcare
Abano operates a partnership and co-invest model, investing alongside a range of private
specialist healthcare businesses in New Zealand, Australia and Asia with services spanning
audiology, dental, diagnostics and rehabilitation through over 200 facilities.
Auckland International Airport
Auckland International Airport (AIA) owns and operates New Zealand’s major gateway as well
as 1500 hectares of land surrounding the airport and has minority investments in
Queenstown Airport and North Queensland Airports (Cairns & Mackay). AIA operates under a
‘dual till’ regulatory regime, meaning that the company’s aeronautical operations are subject
to rate of return regulation, whereas the other non-aeronautical operations are
unregulated. Over 50% of AIA’s revenue is derived from non-aeronautical operations, such as
retail, parking, hotel accommodation and property rental.
Delegat’s
Delegat’s Group is a leading producer of super premium branded New Zealand wines for
domestic and international markets. Established in 1947, it produces and markets the
internationally-acclaimed Oyster Bay range of wines. It exports close to 2m cases of wine
per annum mainly to the UK, Australia, USA and Canada.
Ebos Group
Ebos supplies a range of medical, surgical and retail products to the human and animal
healthcare sectors across New Zealand and Australia. The business has expertise across
wholesaling and supply chain logistics, sales and marketing and manufacturing and retail.
Fisher Funds Management Limited | Freephone 0508 FISHER (0508 347 437) | Email enquiries@fisherfunds.co.nz | Website www.fisherfunds.co.nz
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Fisher & Paykel Healthcare
Fisher & Paykel Healthcare is a leading designer, manufacturer and marketer of a
range of specialized products used in respiratory humidification and obstructive sleep
apnea. It has manufacturing facilities in both New Zealand and Mexico and sells its
products in more than 120 countries worldwide.
Freightways
Freightways is a leading provider of express package services throughout New Zealand, with
complementary business servicing the information management and business mail sectors.
Since commencing operations in Auckland, Freightways has grown organically and by
acquisition to become a leading New Zealand service provider, with representation in every
major town and city throughout the country.
Infratil
Infratil is an owner and operator (through manager Morrison & Co.) of businesses in the
infrastructure areas of energy (mainly renewable), airport and public transport sectors.
Infratil is an active owner of infrastructure assets and often looks to partner with other
players to leverage positions for its shareholders’ benefit.
Mainfreight
Mainfreight is a global supply chain logistics provider, specialising in the handling of freight
that is less than container load, with businesses operating in 186 branches throughout New
Zealand, Australia, Europe, Asia, and the United States. It provides customers with a full
range of logistics services that include managed warehousing, domestic distribution, metro
and wharf cartage and international air and sea freight operations all linked by technology
with full supply chain transparency.
Meridian Energy
Meridian Energy (MEL) is New Zealand’s largest gentailer, producing approximately 30% of
the country’s electricity in an average year. MEL’s generation is sourced 100% from
renewable hydro and wind resources. MEL’s retail business operates under the Meridian and
Powershop brands.
Michael Hill International
Michael Hill International operates Michael Hill Jeweller – a full range retail jewellery chain
catering principally for the middle section of the jewellery market. The Michael Hill chain has a
substantial retail presence in both New Zealand and Australia, along with smaller operations
in Canada and the USA.
Port of Tauranga
Port of Tauranga is the dominant New Zealand port for bulk exports such as forestry and
farming-related products, and its gaining share in imports especially in container freight. Its
proximity to major customers and sound infrastructure are complemented by a highly-
efficient labour force, making it the preferred port of call for an increasing range of shipping
companies.
Fisher Funds Management Limited | Freephone 0508 FISHER (0508 347 437) | Email enquiries@fisherfunds.co.nz | Website www.fisherfunds.co.nz
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Restaurant Brands
Restaurant Brand’s has exclusive franchise agreements for international fast-food brands in New
Zealand including KFC, Pizza Hut, Starbucks and, more recently, Carl’s Jnr. To a limited extent
Restaurant Brands runs a franchisor/franchisee model with Pizza Hut and KFC, but generally
most stores are owned and operated by the company. KFC is the predominant earner for the
group, representing over 80% of operating earnings.
Ryman Healthcare
Ryman Healthcare is New Zealand’s pre-eminent and largest developer and operator of
retirement villages. It operates a continuum of care model at each of its 24 villages, where
residents can change accommodation requirements based on their level of care needs. Ryman
has recently started its first development in Australia, where it intends to operate the
same successful model it has deployed in New Zealand.
Summerset
Summerset is an integrated retirement village builder, owner and operator with a 14 year
track record of developing and operating retirement villages and aged care facilities in New
Zealand. It is now the second largest developer behind Ryman and has the third largest
retirement village owner behind Ryman Healthcare and Metlifecare.
Vista Group International
Vista Group International is an innovative and profitable company providing sophisticated
software to cinema exhibitors. It has a 40% worldwide market share with clients in over 60
countries. Its integrated software systems allows cinema exhibitors to run wide ranging
functions such as ticketing, food and beverage sales and re-ordering, staff and film scheduling,
loyalty schemes, digital signage as well as external customer interfaces like websites, mobile
apps and call centres.
Z Energy
Z Energy recently acquired Chevron New Zealand (Caltex) and now has around a 50% share of
New Zealand’s transport fuel market. The combined group will have over 300 petrol stations,
160 truck stops and 14 storage terminals. Z Energy will keep the Caltex brand and operations
separate to its own but is expected to achieve significant synergies from the acquisition over
time.
Xero
Xero is a market leading provider of cloudbased accounting software to small and medium
businesses and their accountants in New Zealand, Australia and the U.K. They have growing
presences in the U.S and other markets such as South East Asia. They are an innovative
company and have achieved impressive subscriber growth to date and are on the cusp of
breaking even. Although initially expensive to acquire, their customer base of 1.2 million
small to medium businesses globally represents a significant competitive advantage.
Fisher Funds Management Limited | Freephone 0508 FISHER (0508 347 437) | Email enquiries@fisherfunds.co.nz | Website www.fisherfunds.co.nz
FISHER FUNDS KIWISAVER SCHEME GROWTH FUND | 4
The following is a selection of Australian companies that we have hand picked
Ansell
Ansell designs, develops, manufacturers and markets a wide range of hand and arm
protection solutions (a.k.a. gloves), clothing and condoms. It is essentially an industrial
materials business that transforms natural rubber latex and synthetic latex into these value
added products. The business has an interesting combination of cyclical and defensive
exposures. Ansell is a leading player (#1 or #2) in all its key market segments and generates a
very healthy return on invested capital.
ARB Corporation
ARB is Australia’s largest manufacturer and distributor of 4×4 accessories. The company’s key
strength is its product leadership, with ARB-branded products enjoying a material price
premium to competitors. This has been established through a prolonged R&D focus which has
resulted in ARB having the best products. ARB products are distributed through a network of
its own stores in Australia, and a network of distributors around the world that sees it export
to more than 100 countries.
AUB Group (Austbrokers)
Austbrokers operates a general insurance broking network focused on the SME market.
The business is based on a “owner-driver” model and has multiple avenues for future
growth: via acquisition (industry is consolidating), achieving synergies from the network
structure and cross sell/up sell of existing client base.
Brambles
Brambles is a supply-chain logistics company operating in more than 50 countries. The
Group specialises in the pooling of unit-load equipment and associated services, focusing
on the outsourced management of pallets, crates and containers.
Carsales
Carsales owns a network of classified advertising websites in Australia. Carsales’ main
website, www.carsales.com.au, is the leading automotive classifieds website in Australia.
Carsales is a strong business with attractive growth prospects and interesting global options.
Commonwealth Bank of Australia
Commonwealth Bank of Australia operates a leading banking franchise in both Australia and
New Zealand and has a strong presence in all spheres of retail and business banking. CBA has
built a very profitable portfolio of assets and positioned itself to benefit from key growth
areas in the Australian economy. The bank also enjoys an enviable scale advantage in
gathering deposits, allowing it an important source of stable and low-cost funding.
Credit Corp
Credit Corp purchases and then collects, on its own account, portfolios of defaulted
debt. These are primarily bought from banks. In more recent time the company has
diversified, leveraging its understanding of the sub-prime market to provide consumer
credit. It also has a fledgling US purchased debt ledger (PDL) operation.
Fisher Funds Management Limited | Freephone 0508 FISHER (0508 347 437) | Email enquiries@fisherfunds.co.nz | Website www.fisherfunds.co.nz
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CSL
CSL is a leader in the growing global plasma therapies market, and has a superb record of
maintaining healthy returns while delivering strong earnings growth. CSL’s therapies
address severe autoimmune and nerve degeneration conditions, drug trials for which are
typically difficult to conduct given the significant challenges in patient recruitment. This
gives existing companies with approved therapies a tremendous intellectual property
advantage, which is evident in the very long product life-cycles over which CSL enjoys
positive financial returns.
Domino’s Pizza
Domino’s Pizza is a true Australian growth stock with significant opportunities to increase its
store numbers, improve sales growth in existing stores, and to expand profit margins. By
customising both its pizza and service offering, Domino’s has grown from 178 stores in 2001
to over 1400 stores at December 2014. The business has also grown profits by more than 17
times over this period. Today Domino’s has large businesses in Europe and Japan and we
expect Domino’s has every probability of building on its remarkable success.
Ingenia Communities
Ingenia Communities is a retirement living operator focussed on the value end of the
market. The business has had a tumultuous past (like many Australian property
companies). Under the leadership of CEO Simon Owen (appointed Nov-09) it has
refocused on its core proposition, sold non-core assets, cut debt and during FY12
internalised its management. We know Simon well as he was CEO of Aevum, a
previous successful portfolio investment.
NAB
NAB is one of the four major Australian banks. Having exited less profitable UK and
Insurance businesses, NAB enjoys attractive options in terms of expanding its valuable
Australasian franchise.
Nanosonics
Nanosonics owns intellectual property and has developed applications for point of use
disinfection and sterilisation technologies. These technologies have a number of core
benefits compared to existing approaches and can be applied to a variety of markets.
Nanosonics' advantage is based on its unique patented technologies, and the company's
ability to apply these technologies to well identified market opportunities.
Ooh! Media
Ooh! Media is a leading Out Of Home advertising company with a dominant share in the
Retailing sector. The company sells advertising opportunities on its wide network of signs and
digital screens, allowing advertisers to reach consumers in new and exciting ways.
Fisher Funds Management Limited | Freephone 0508 FISHER (0508 347 437) | Email enquiries@fisherfunds.co.nz | Website www.fisherfunds.co.nz
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Ramsay Healthcare
Ramsay Healthcare is Australia’s leading hospital operator operating 151 hospitals and day
surgery facilities across Australia, the United Kingdom, France, Indonesia and Malaysia.
Ramsay has an exceptional record, growing revenue and earnings at an annual rate of more
than 20% over the last ten years, while maintaining returns well above its cost of capital.
Going forward Ramsay has an attractive pipeline of development opportunities in Australia,
France and Indonesia.
Resmed
ResMed is a global leader in the treatment of sleep-disordered breathing conditions like
obstructive sleep apnea (OSA). The company provides a range of treatment options for
patients with these conditions including CPAP flow generators and consumables. The firm is a
leader in a global oligopoly with competitors Respironics and New Zealand’s Fisher & Paykel
Healthcare.
Seek
SEEK is the largest global online employment marketplace. Operating across
Australia, New Zealand, South East Asia, China, Brazil, Mexico, Bangladesh and Africa,
SEEK's employment marketplaces are exposed to approximately 2.6 billion people
and more than 20% global GDP.
Sonic Healthcare
Sonic Healthcare is a leading global provider of medical diagnostic services. The
combination of an ageing population, an increasing focus on preventative medicine and
more effective diagnostic tests drives Sonic’s substantial long-term growth opportunity.
Regulated medical prices are typically set to allow small independent companies to make
a reasonable profit, which allows Sonic to achieve significant additional profitability from
its substantial scale. More people with more access to and a greater need for healthcare
services present Sonic with profitable growth prospects.
Technology One
Technology One (TNO) is one of Australia’s largest ERP companies, with a significant
presence in Government, Health and Education sectors. TNE offers a fully integrated
service, which encompasses software development, sales, implementation and
consulting. TNE argues the model of providing both product and consulting solutions
delivers superior client outcomes.
Virtus
Virtus Health Ltd. provides healthcare services. It operates through the Healthcare Services
Australia and Healthcare Services International segments. The company was founded on
February 11, 2008 and is headquartered in Greenwich, Australia.
Fisher Funds Management Limited | Freephone 0508 FISHER (0508 347 437) | Email enquiries@fisherfunds.co.nz | Website www.fisherfunds.co.nz
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Westpac
Westpac is Australia’s oldest bank and corporation. It operates a leading bank franchise in
both Australia and New Zealand and has a strong presence in all spheres of retail and
business banking. Westpac has a formidable stable of brands supporting its top tier position
in both deposit gathering and lending.
Wisetech
Wisetech Global Ltd. develops cloud-based software solutions for the international and
domestic logistics industries. Its activities include development, sale, and implementation of
software solutions that enable logistics service providers to facilitate the movement and
storage of goods and information domestically and internationally. The company was
founded by Maree McDonald Isaacs and Richard John White on August 2, 1994 and is
headquartered in Sydney, Australia.
The following is a selection of International companies that we have hand picked
Company Country of Origin and Business Overview
United States
Abbott Laboratories aims to keep hearts healthy and to nourish bodies at every stage of
life by giving their customers information and medicines to manage our health. They
create breakthrough products – in diagnostics, medical devices, nutrition and branded
generic pharmaceuticals.
United States
Adidas is the largest manufacturer of sportswear and sporting equipment in Europe and
the second largest globally with 12% market share. Adidas is a global brand and well-
managed company with good underlying growth.
China
Alibaba operates China’s largest online e-commerce marketplace, matching over 300 million
buyers to 8.5 million sellers with more than one billion product listings. Alibaba has market
share of over 80% in China and exceptional growth prospects given the rapid growth in
ecommerce in China. Alibaba also has a 37.5% interest in AliPay, China’s PayPal equivalent.
United States
Blackhawk is the leading prepaid gift card network offering gift cards from leading consumer
brands with dominance in the supermarket distribution channel. Blackhawk have a strong
competitive advantage through their extensive distribution network supported by good
economics for all participants in the value chain. They have a high growth outlook over the
medium term (management guides 20% growth) through increasing penetration in the US and
expansion into international markets. Blackhawk have a superb track record of delivering
revenue and earnings growth and earns very high returns on capital invested.
Fisher Funds Management Limited | Freephone 0508 FISHER (0508 347 437) | Email enquiries@fisherfunds.co.nz | Website www.fisherfunds.co.nz
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Italy
Brembo is a global leader in high performance braking systems. The majority of sales
come from high end cars (customers include Ferrari, Audi, Porsche and Mercedes-Benz)
and motorcycles (customers include Ducati and Harley Davidson). As the global leader in
their industry they have the ability to increase penetration with existing customers and
sign up new customers around the world. They have gained real traction in the US and are
poised to benefit from the emerging high end consumer in developing countries such as
China and Brazil.
United States
Cerner is the world’s largest Healthcare software application provider with a range of products
that provide solutions for the needs of healthcare organisations. This includes electronic
medical records, practise management and billing systems, hospital IT admin as well as
applications in the area of population health management (data analytics which predicts
medical care requirements for patient populations). Cerner’s software is critical to their clients
operations, switching costs are high and they have both significant scale and superior
technology. This has allowed them to continuously win market share as the industry
consolidates. Cerner has a strong track record and attractive growth outlook as a result of
increasing IT requirements in the healthcare sector.
United States
Cognizant is a leading IT services company providing information technology, consulting and
business services to a range of mainly larger global companies. Cognizant is a wide moat
company that is deeply ingrained with its customers as a partner in IT and wider business
strategy. Cognizant has invested heavily to position itself to capture the significant move of IT
towards digital (social, media, analytics and cloud) which should underpin long term growth.
Furthermore, Cognizant have a strong management team and a great track record of growth
and innovation.
United States
Core Laboratories is the leading, stand-alone service provider of proprietary and patented
reservoir services to the oil and gas industry. The company has a strong value proposition,
generating high returns for its customers at a relatively low cost. Core Labs operates in over a
quarter of the world’s active oil fields, where its products and services are used to both
increase the total volume of oil recovered and reduce overall production costs. CLB has a
strong moat through its extensive, and hard to replicate, library of reservoir data and technical
know-how acquired over decades of operations.
United States
Descartes is a logistics software business. Descartes business moat is centred on its Global
Logistics Network (GLN). The GLN connects supply chain participants, in real time, giving
visibility and control of movement of goods across increasingly regulated and complex global
supply chains.
Fisher Funds Management Limited | Freephone 0508 FISHER (0508 347 437) | Email enquiries@fisherfunds.co.nz | Website www.fisherfunds.co.nz
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United States
Ebay is the world’s largest online marketplace with over 100 million active users. Ebay has an
enviable track record of value creation, generates strong cashflow and is expected to grow
earnings over the next 3-5 years.
United States
Ecolab is the global market leader that provides cleaning and sanitising solutions for the
foodservice, hospitality and healthcare industries. They also provide chemicals and
technologies to the water treatment and oil production industries. Ecolab offers a strong
value proposition for its vast client base with their product innovations resulting in
reduced energy and water usage, lower labour costs and reduced downtime. Ecolab is a
high quality company that invests significantly more than its competitors into developing
innovative products and this has resulted in continued market share gains. Ecolab has an
excellent record of predictable growth and strong growth prospects.
United States
Edwards Lifesciences is the global leader in patient-focused medical innovations
for structural heart disease, as well as critical care and surgical monitoring. Driven
by a passion to help patients, the company collaborates with the world’s leading
clinicians and researchers to address unmet healthcare needs, working to
improve patient outcomes and enhance lives.
United States
Expedia is the largest online travel agent (OTA) in the US and is ranked in the top 2 in most
markets globally. The company has very strong network and scale moats. The network moat
means that hotels only want to sign up with OTAs that have a large audience of travellers, and
travellers only want to search on an OTA with a lot of properties. Expedia offers exposure both
to solid growth in the global travel market as well as increased penetration of online bookings.
We expect Expedia to grow earnings at mid teen rates for the next 5 years. The company is
highly profitable, generates return on capital in excess of 20% with strong capital discipline.
France
Essilor International SA designs, manufactures and sells ophthalmic lenses and ophthalmic
optical instruments. The company operates through three business segments: Lenses & Optical
Instruments, Equipment, and Sunglasses & Readers. The Lenses & Optical Instruments business
segment engages in the production, finishing, distribution and Trading of lens and instruments.
The Equipment business segment engages in the production, distribution and sale of high
capacity equipment, such as digital surfacing machines and lens polishing machines, used in
manufacturing plants and prescription laboratories for finishing operations on semi-finished
lenses. The Sunglasses & Readers business segment engages in the production, distribution
and sale of both non-prescription sunglasses and non-prescription reading glasses. Essilor
International was founded on October 6, 1971 and is headquartered in Charenton-le-Pont,
France.
Fisher Funds Management Limited | Freephone 0508 FISHER (0508 347 437) | Email enquiries@fisherfunds.co.nz | Website www.fisherfunds.co.nzFISHER FUNDS KIWISAVER SCHEME GROWTH FUND | 10
Germany
Fresenius is the market leader in the global dialysis industry, and is the only vertically
integrated player –providing both products and services to the dialysis market. As kidney
disease becomes more prevalent in an aging population, dialysis and associated treatments are
becoming an increasing proportion of overall healthcare costs. Fresenius’ depth of knowledge
and data around dialysis should allow them to improve patient outcomes while reducing the
overall cost of treatment for this growing global dialysis population.
United States
Google owned by Alphabet is the world’s leading internet search provider, the world’s most
visited web property and the largest global advertising platform by advertising revenue. Google
has high moats arising from scale, high switching costs and a strong brand which contribute to
very strong returns on invested capital.
United States
Hexcel is a global leader in advanced composites technology – offering a range of
stronger, lighter and tougher. Operating in commercial aerospace, industrial, space and
defence industries, Hexcel offers hundreds of products in multiple markets around the
world.
Ireland
Icon is a healthcare company that provides specialized services in clinical trial
management for the world’s largest pharmaceutical and biotechnology companies.
United States
LKQ Corp is the largest distributor of replacement parts and components needed to repair cars
and trucks in the US and Europe. The value proposition is strong, as these alternative parts cost
20%-50% less than new parts and have been growing in popularity with auto repair shops and
insurers. LKQ is the largest and only nationwide distributor of these parts in the US and is
growing its footprint in Europe. We believe LKQ can grow strongly over the next few years with
minimal impact from the economic cycle.
United States
MasterCard is the second largest payment network in the world, operating in 210 countries
and supporting more than 2 billion cards across its network. MasterCard’s growth outlook is
underpinned by the secular shift to electronic payments and away from cash, particularly in
emerging markets where MasterCard has significant presence. These structural growth drivers
combined with increasing margins and high cash flow generation (allowing for substantial
share buybacks) supports a strong growth outlook over the medium to long term.
Fisher Funds Management Limited | Freephone 0508 FISHER (0508 347 437) | Email enquiries@fisherfunds.co.nz | Website www.fisherfunds.co.nzFISHER FUNDS KIWISAVER SCHEME GROWTH FUND | 11
United States
PayPal is a technology-enabled provider of payment solutions, enjoying relationships with
over 10 million merchants and 169 million consumers spanning the globe. The company is
most well-known for its online payments technology where consumers can purchase
online using their PayPal account in a way that is highly secure and doesn’t require
sending credit card details over the internet.
United States
United Parcel Service (UPS) is the world’s largest package delivery company and operates
in over 220 countries and territories with its fleet of 100,000 ground vehicles and 530
aircraft. The market dynamics of the global freight industry are compelling, with high
barriers to entry given the need for a large international network and delivery route
density to be competitive. In addition to the strength of their business model, UPS are set
to benefit from the growth in ecommerce activity and increasing cross-border trade
volumes in Asia and Europe.
United States
Zoetis a leader in the animal health space (both livestock and companion animal) – an industry
with some attractive attributes. Zoetis has strong moats built around IP, brand and a large
direct sales force giving them access to key decision makers (including veterinarians) and end-
users. The growth runway is underpinned by a couple of secular growth drivers – increased
global protein requirements and increased pet ownership and ‘humanisation’ of pets.
Fisher Funds Management Limited | Freephone 0508 FISHER (0508 347 437) | Email enquiries@fisherfunds.co.nz | Website www.fisherfunds.co.nzYou can also read
