Barramundi Limited (NZX:BRM) has reported the worst performance in its 20-year history, with a NZ$42.9 million net loss and a 17.0% fall in gross portfolio performance. The board is reviewing Fisher Funds’ management performance just weeks before its five-year agreement comes up for renewal.
- NZ$42.9 million net loss for FY26
- Adjusted NAV return of -18.2% versus benchmark return of +9.2%
- WiseTech, Xero, healthcare and classified advertising holdings weighed on returns
- Quarterly dividend policy maintained, with 1.07 cents per share payable
- Fisher Funds management agreement review remains unresolved
Worst performance in Barramundi’s history
Artificial intelligence fears, weak healthcare execution and a powerful rally in Australian resources stocks combined to produce Barramundi’s worst year since listing. The NZX-listed investment company recorded a NZ$42.9 million net loss for the year ended 30 June 2026, reversing a NZ$7.9 million profit a year earlier.
The portfolio’s gross performance fell 17.0%, while adjusted net asset value declined 18.2%. That compared with a 9.2% gain for Barramundi’s benchmark, the S&P/ASX 200 Index hedged 70% to New Zealand dollars. Total shareholder return was negative 16.2% as the share price fell from $0.69 to $0.53, including the effect of dividends and warrants.
Technology and healthcare drove the damage
The losses were concentrated in sectors that had previously been central to Barramundi’s quality-growth strategy. Information technology and communication services were hit as investors questioned whether AI could erode the future earnings power of software and online classified businesses.
WiseTech Global fell 69% in Australian dollar terms during the year and Xero dropped 60%. Classified advertising holdings also weakened sharply, with SEEK down 42%, CAR Group down 28% and REA Group down 41%. Barramundi’s manager, Fisher Funds, said the companies continued to deliver growth, but acknowledged that the market’s AI debate could take time to settle and that economic moats or long-term pricing power could be reduced.
Healthcare was an even more direct admission of investment disappointment. The sector fell 37%, with CSL down 51% and Cochlear down 59%. Fisher Funds said both companies delivered a series of poor financial results and that Barramundi should have reduced its healthcare weighting sooner. ResMed also fell 25% despite what the manager described as strong operational performance.
A portfolio caught on the wrong side of the resources rally
Materials was the strongest part of the Australian market, returning 47% as gold, copper, iron ore and other commodities rallied. Barramundi had limited resources exposure for much of the year, although it reintroduced BHP and Rio Tinto, which returned 40% and 33% respectively in Australian dollar terms from their purchase dates to year-end.
The five largest holdings at 30 June were Macquarie at 6.4%, Xero at 6.1%, BHP at 6.3%, WiseTech at 5.8% and AUB Group at 5.4%. The portfolio was 98.3% invested in equities, with cash and foreign exchange positions accounting for the balance. The manager also pointed to gains from Macquarie, Maas Group, PWR Holdings, Ansell and takeover activity involving Johns Lyng and oOh!media, but those contributions were insufficient to offset the major declines.
Manager review becomes the next major test
The weak result has sharpened a governance question already sitting over the company. Barramundi’s five-year management agreement with Fisher Funds expires in October 2026, and the board said it was conducting a comprehensive review of the manager’s performance and its obligations. The outcome was not known when the annual report was issued.
The financial statements show management fees fell to NZ$1.625 million from NZ$2.948 million after a performance-related adjustment reduced the effective fee to the 0.75% minimum. Fisher Funds issued a NZ$1.084 million credit note to be applied against future management fees. No performance fee was payable, because the portfolio did not exceed either the performance hurdle or the high-water mark.
Dividends maintained despite capital loss
Barramundi maintained its policy of distributing 2% of average NAV each quarter, paying 5.25 cents per share during FY26 compared with 6.00 cents the previous year. The next dividend is 1.07 cents per share, payable on 25 September 2026. At 30 June, the statutory NAV per share was $0.53, matching the share price.
The company ended the year with NZ$3.4 million in cash and no borrowings. Its 2025 warrant issue produced a strikingly small conversion: only 83,274 of 85.18 million warrants were exercised at $0.65, with the remainder lapsing. That result left little additional capital for the portfolio and highlights how far the share price had fallen below the exercise price.
FY27 depends on evidence, not reassurance
Fisher Funds argues that its software and classified businesses remain attractively valued and that their proprietary data, customer integration and switching costs can withstand AI disruption. It also expects BHP and Rio Tinto to provide greater balance, while healthcare holdings enter the new year at lower valuations.
Those claims now face a demanding test. Barramundi’s annual meeting is scheduled for 30 October, while the management agreement decision is due around the same period. The key question is whether the board’s review produces a meaningful change in portfolio discipline and accountability, or simply gives the existing strategy more time to recover.
Bottom Line?
Barramundi has preserved its dividend, but the October management agreement decision may matter more than the next quarterly distribution.
Questions in the middle?
- Will the board renew Fisher Funds’ mandate, and on what revised terms?
- Can the portfolio’s AI-exposed companies convert earnings growth into renewed share-price support?
- Will healthcare execution improve quickly enough to justify retaining meaningful exposure?