BHD reports $420,931 loss after 9.93% portfolio return

Portfolio Gains Offset by Litigation Costs

Benjamin Hornigold Limited (ASX:BHD) produced a respectable portfolio return in FY2026, but shareholders still faced another year of losses as the company funded its long-running legal campaign against former directors and related parties. The listed investment company reported a $420,931 loss for the year ended 30 June 2026, an improvement on the $709,247 loss recorded in FY2025.

BHD said its portfolio returned 9.93%, outperforming both small-cap and large-cap indexes while maintaining a significant cash allocation. The result was not enough to overcome $565,697 in legal fees, alongside $308,000 in directors’ fees and other expenses. The company’s cash balance rose to $3.78 million, but net assets fell to $5.71 million from $6.13 million.

Investment Performance Improved Despite Unrealised Losses

Investment income strengthened during the year. Net gains on financial instruments rose to $534,741 from $98,468, supported by a $518,092 realised gain on sales and $616,819 in distributions and other investment income. Those gains were partly offset by a $624,838 unrealised loss on investments, leaving net profit from investment activities negative at $106,746.

IperionX was the standout contributor, delivering a 72% return during BHD’s holding period before the position was exited in October 2025. Navigator Global Investments gained more than 50% within the portfolio, while a small position in Kyron Capital Group produced a 300% gain in the weeks before the financial year ended. BHD said it continued to hold cash because it wanted funding available for the litigation.

Settlements Deliver $2.6 Million After Year-End

The legal campaign produced a more tangible outcome after balance date. BHD received $800,000 under a settlement connected with a former director, with the funds reaching its solicitors’ trust account on 20 July 2026. A second settlement worth $1.8 million was received in the company’s bank account on 4 August, taking post-year-end settlements to $2.6 million.

The settlements are separate from BHD’s outstanding claims over loans to JB Financial Group and John Bridgeman Ltd. At 30 June, those contractual claims, including interest, totalled $4.94 million for a secured convertible loan, $2.06 million for the John Bridgeman loan and $1.63 million for a further JB Financial Group loan. All were fully impaired because recovery remains uncertain.

JB Markets Judgment Carries No Recognised Value

BHD also obtained a default judgment against JB Markets worth $8.97 million on 6 August 2026. The company nevertheless said it attributed no value to the judgment because of JB Markets’ financial circumstances. The filing therefore presents the judgment as a legal outcome rather than an asset that can currently support the balance sheet.

The accounting picture remains heavily dependent on listed investments and cash. At year-end, BHD held $2.94 million in investments at fair value, compared with $3.37 million a year earlier, and reported net tangible assets of $0.24 per share against a stated share price of $0.18. No dividend was declared or paid.

Recovery and Capital Allocation Remain the Key Variables

The annual report leaves BHD with a mixed proposition: the investment portfolio generated a positive annual return and cash increased, but legal expenses continued to consume capital and the company remains loss-making. The board said it would continue operating as a listed investment company and focus on maximising returns from its investments.

What matters next is whether the $2.6 million in settlements materially changes the company’s capital position and whether any value can eventually be extracted from the impaired loan claims. For now, the largest legal number in the report is also the least useful one: the $8.97 million judgment that BHD says is unlikely to produce funds.