Duxton Farms Accelerates Growth with Share Buyback and Crop Gains in Q2 FY2025

Quarterly Financial and Operational Highlights

Duxton Farms Limited (ASX:DBF) has delivered a strong second quarter for fiscal year 2025, reporting an operating cash flow surplus of $2.24 million. This positive cash flow was primarily driven by the commencement of winter crop sales following the completion of the harvest in December 2024. The company’s diversified agricultural portfolio, spanning over 157,000 hectares across New South Wales, Victoria, and the Northern Territory, continues to underpin its operational resilience.

During the quarter, Duxton Farms repurchased 372,435 shares as part of its ongoing buyback program, bringing the total shares bought back to 3.81 million. The company retains capacity to acquire an additional 3.2 million shares, signaling confidence in its valuation and future prospects.

Weather Impact and Crop Performance

The Forbes region experienced a notable increase in rainfall towards the end of the calendar year, with November and December recording 40% and 51% above historical averages respectively. This rainfall boost contributed to a total grain production of 23,744 tonnes for the winter crop, although quality was affected by rain during harvest and frost damage impacted canola yields. Summer crops, particularly cotton, showed promising growth supported by irrigation and crop protection measures despite some minor spray drift damage.

At Piambie, winter crop yields fell below budget due to frost and reduced irrigable area, but the property’s pistachio development is advancing with Stage Three scheduled to commence in early 2025. Meanwhile, Mountain Valley Station’s livestock program is progressing well, with over 3,300 breeding cattle and preparations underway for the wet season.

Strategic Diversification and Investments

Reflecting its strategic pivot, Duxton Farms has initiated the sale of its Kentucky dryland cropping property, aiming to redeploy capital into expanding operations in Victoria, the Northern Territory, and other agricultural ventures. In line with this, the company increased its investment in Duxton Bees by acquiring an additional 5.2 million shares for $4 million, raising its total stake to approximately $5.6 million. It also exercised options to acquire shares in Duxton Dried Fruit Pty Ltd for $2.2 million, with potential for further option uptake depending on market conditions.

These moves underscore Duxton Farms’ commitment to broadening its commodity mix and geographic footprint, enhancing its exposure to sectors with sustainable growth potential.

Market Conditions and Outlook

Market prices for key commodities presented a mixed picture. Wheat and barley prices edged slightly higher quarter-on-quarter but remain below last year’s levels, while cotton prices declined modestly internationally. Livestock prices, however, showed strong recovery with beef and lamb indicators rising significantly, supported by tight inventories and robust export demand.

Nationally, favourable weather has supported winter crop production increases in some states, although dry conditions in Victoria and South Australia have dampened outputs. The company’s irrigation infrastructure improvements and crop management strategies position it well to navigate these variable conditions.

Financial Position and Funding

Duxton Farms ended the quarter with $2.58 million in cash and $19.75 million in unused financing facilities, providing a solid liquidity buffer. The company’s debt facilities, secured by property and water entitlements, include a $40 million term debt facility and an $8 million overdraft with competitive interest rates. This financial flexibility supports ongoing operational needs and strategic investments.