$540,000 operating inflow leaves Duxton Farms with $13.98 million overdraft

Positive Quarterly Cash Flow Masks a Stretched Funding Position

Duxton Farms Limited (ASX:DBF) generated $540,000 of net operating cash inflow in the September quarter, a sharp swing from the $6.8 million operating outflow recorded in the June quarter. The improvement was driven in part by the seasonal receipt of $22.1 million from customers, rather than by a reported quarterly earnings measure, which the activities report does not provide.

The cash position remains the more consequential number. Duxton Farms ended 30 September with a $13.98 million net overdraft, while $103.25 million of its $108.91 million in total financing facilities was drawn. Only $5.66 million remained unused. The company’s senior bank facilities are secured against property and water entitlements, and scheduled equipment-finance repayments contributed to a $785,000 financing cash outflow during the quarter.

The funding pressure follows the company’s going concern warning, which had cited heavy cash outflows, higher borrowings and reliance on asset sales and new funding. Subsequent to quarter end, on 1 October, Duxton Farms issued $4.81 million of secured convertible notes under its entitlement offer. The notes carry a 7.5% annual cash interest rate, or 12% if capitalised at the holder’s election, and mature in October 2030. A further approximately $1.76 million of notes applied for by directors still requires shareholder approval.

Asset Sales Remain Important to the Cash Equation

The company said proceeds from the sale of its Duxton Apples business should further strengthen cash, but settlement has slipped to November 2026 from the previously expected July completion. The transaction was agreed at $9.2 million, making the Duxton Apples sale an important near-term source of liquidity, although the current report does not state the net proceeds after transaction costs or other adjustments.

Duxton Farms is also actively negotiating the sale of its Forbes properties. The company completed its cotton harvest there, with yields exceeding expectations, and plans to plant about 550 hectares of cotton for the next summer crop. It did not plant a winter crop for the 2027 season, leaving the remaining country long fallowed while negotiations continue over the properties first placed on the market in the company’s Forbes property sale process.

Pistachio Expansion Advances as Pollination Risk Builds

Operationally, the quarter offered a mixed picture. Piambie’s latest planting added 167 hectares of pistachios, taking the orchard to 648 hectares, with scope for a further 140 hectares. The Ord cotton harvest and ginning were completed, although yields were slightly below the previous year after late-season flooding and replanting. At Yarramundee, full water storages and strong soil moisture supported preparation for the summer maize crop.

Apiculture presents a more immediate operating risk. Treatment-resistant varroa mite constrained the 2026 almond pollination season, with Duxton Farms delivering about 7,200 of its own colonies and 32,600 in total, including brokered hives. Lower-than-forecast colony strength meant fewer frames of bees were delivered than contracted. For 2027, the company expects total colony availability to fall by about 25%, with higher prices per colony expected to follow, while it works with growers to mitigate supply risk.

Honey sales provided one brighter commercial datapoint: the Fuzzy Bum product sold 35,000 units through Woolworths after launching in July 2026 and is ranged in 870 Australian stores. Bulk honey prices were holding at $6.50 a kilogram, in line with expectations, as dry conditions left several suppliers short.

November Settlement and Shareholder Approval Become Key Tests

The next financial markers are unusually clear. Duxton Farms needs the Duxton Apples transaction to settle, while shareholders must decide whether to approve the approximately $1.76 million director-applied shortfall note allocation. The company’s subsequent overdraft, debt and unused-facility position will show how much of the funding strain has actually eased, rather than merely been deferred.