Duxton Farms Reports AUD 5.7M Cash Flow Deficit Amid Merger and Crop Challenges

Strategic Merger to Expand Agricultural Footprint

Duxton Farms Limited (ASX – DBF) has taken a significant step towards transforming its business by proposing a merger with four private agricultural companies – Duxton Dried Fruits Ltd, Duxton Orchards Pty Ltd, Duxton Bees Pty Ltd, and Duxton Dairies (Cobram) Pty Ltd, collectively referred to as Duxton Walnuts. This move, recently endorsed by shareholders at an Extraordinary General Meeting, is designed to create a larger, more diversified agricultural platform with enhanced exposure to permanent horticulture, viticulture, and apiary sectors.

The merger is expected to reduce operational risks by spreading exposure across multiple commodities and geographies, while unlocking synergies that could improve earnings predictability and capital growth potential. By consolidating these assets, Duxton Farms aims to build a more investable entity with a broader shareholder base and improved liquidity on the ASX.

Operational Update – Crop Conditions and Development Progress

During the first quarter of FY2026, Duxton Farms faced challenging weather conditions, with dry spring weather placing pressure on its winter wheat crop in New South Wales’ Forbes aggregation. Barley crops showed more resilience, though overall yield estimates were revised downward. Despite these setbacks, preparations for the upcoming cotton season are well underway, with land ready and sufficient water resources secured to support irrigation. The hot and dry conditions are expected to benefit early cotton growth, with planting scheduled to commence early in the second quarter.

In Northern Australia, the company marked a milestone by harvesting its first cotton crop in the Ord region, achieving yields slightly above expectations and comparable to traditional cropping areas in southeastern Australia. Livestock operations at Mountain Valley Station continue positively, with cattle in good condition and ongoing efforts to optimize feeding programs.

Piambie Pistachio Development and Infrastructure Enhancements

Duxton Farms completed Stage 3 of its pistachio development project at Piambie, now boasting 482 hectares planted, positioning it among the largest pistachio plantations nationally. Early growth indicators are promising, with trees from earlier stages emerging from dormancy and infield budding progressing. The company is also refining irrigation infrastructure to support this permanent horticulture asset, aligning with its strategic focus on higher-yield, more predictable agricultural commodities.

Financial Position and Cash Flow

The quarter saw an operating cash flow deficit of AUD 5.744 million, primarily due to seasonal expenditures on crop inputs, land preparation, and ongoing development activities. Despite this, Duxton Farms maintains a solid liquidity position with cash and available financing facilities totaling approximately AUD 19 million, providing an estimated 3.3 quarters of funding runway. The company also paid an 85% franked dividend of 24 cents per share during the period, underscoring its commitment to shareholder returns amid growth investments.

Financing facilities remain robust, with secured loans from the Commonwealth Bank of Australia supporting operational and development needs. No share buybacks were conducted in the quarter.

Looking Ahead

As Duxton Farms integrates the merger companies and advances its diversified agricultural strategy, the coming quarters will be critical to monitor the realization of operational synergies and financial performance. The company’s ability to manage climatic variability and capitalize on its expanded portfolio will be key to delivering on its promise of sustainable long-term growth for investors.