Duxton Farms Limited’s Q4 FY2026 update highlights robust summer cotton yields at Forbes, ongoing divestment of broadacre assets, and mixed results across horticulture and apiculture. Financially, the company recorded significant operating cash outflows, increased its overdraft facility, and expects to bolster liquidity through property and business sales.
- Cotton yields at Forbes exceed expectations despite dry conditions
- Sale of apple business and three properties underway to improve cash flow
- Honey production falls short due to drought but prices rise significantly
- Northern Australia cattle sales begin amid lease expiry and land use challenges
- Net operating cash outflow of $6.8 million for the quarter, overdraft facility increased
Strong Cotton Yields Contrast with Strategic Exit from Broadacre Farming
Duxton Farms Limited (ASX:DBF) delivered a solid performance in its summer cotton crop at Forbes, NSW, with yields averaging 13 bales per hectare and peaking at over 15 bales in Walla Wallah, well above regional expectations. This comes despite a challenging start to the year marked by hot, dry conditions. However, the company is actively marketing its Forbes broadacre assets for sale, reflecting a strategic pivot away from dryland winter cropping, which has been increasingly unprofitable due to surging diesel and fertiliser costs linked to geopolitical tensions in Iran.
Northern Australia Operations Adjust to Lease Expiry and Crop Challenges
In Northern Australia, Duxton Farms is preparing to exit its Mountain Valley Station lease, initiating the sale of most of its cattle as the company acknowledges that large-scale cropping ambitions there are not feasible within its required timeframes. Meanwhile, at the Wildman Agricultural Precinct, the company has completed post-wet season burning and established fire breaks, planning to plant fodder and potentially grain sorghum, the first full crop at the site. Flooding at the leased Ord blocks forced replanting of about 60% of the crop, but growth has since caught up, with no expected impact on yield or quality.
Horticulture and Viticulture Show Mixed Progress
Duxton’s pistachio orchard at Piambie Farm has entered dormancy, with soil management activities underway and preparations for a new planting stage scheduled for early FY2027. The walnut orchard at Yarramundee is also dormant, with pruning and soil amelioration progressing, though no new plantings are planned this year due to limited biological material. In viticulture, dried fruit harvests at Euston and Wemen returned 2,722 tonnes, below budget but respectable given recent weather-related mould issues. Vineyard operations are advancing with pruning and soil treatments aimed at a strong upcoming season.
Apiculture Faces Production Shortfall but Expands Market Reach
Honey production fell short of forecasts, yielding 320 tonnes against an expected 660 tonnes, primarily due to severe drought conditions in New South Wales. However, honey prices have risen from $4.60/kg to $6.00/kg over the year, driven by supply shortages. The company’s branded Fuzzy Bum honey has expanded distribution, now stocked in 870 Woolworths stores nationwide (excluding Western Australia) and 220 independent retailers, with plans to grow presence in South-East Asia and the United States through private label products. Pollination services secured 44,000 hives for the almond industry, though varroa mite management remains a significant operational challenge.
Financial Position Reflects Seasonal Outflows and Asset Sales
Duxton Farms reported net operating cash outflows of $6.8 million for the quarter and $31.2 million for FY2026, reflecting timing mismatches between costs and customer receipts. Investing outflows were modest at $0.5 million, offset by property disposals including the sale of Cowaribin and Merriment farms in the prior quarter. The company increased its Commonwealth Bank overdraft facility by $8 million to $15.4 million to support working capital. Scheduled debt repayments continued, with net financing outflows of $0.5 million. Crucially, the sale of the apple business for $9.2 million is expected to settle by end-July, alongside ongoing marketing of three properties valued at $65.6 million, which should strengthen liquidity. Duxton Farms acknowledges its current funding covers approximately 1.2 quarters at prevailing cash outflow levels but is confident in its strategies to manage cash flow and continue operations.
These financial dynamics underscore the company’s transition phase, balancing operational yields from diversified agricultural assets against a strategic reallocation of capital away from broadacre cropping towards horticulture, viticulture, and apiculture sectors.
Bottom Line?
Duxton Farms is navigating a critical pivot from broadacre cropping to diversified agriculture while managing tight cash flows and leveraging asset sales to shore up liquidity.
Questions in the middle?
- Will the sale of the apple business and properties deliver the expected cash boost on schedule?
- How will ongoing varroa mite challenges affect pollination service reliability and costs?
- Can Duxton Farms sustain operational cash flow amid seasonal volatility and strategic shifts?