Duxton Broadacre Farms Ltd

The group provides exposure to the Australian grain industry while capitalising on increasing demand for grain and other broadacre farm products catering to staple food products, the alcohol industry and the livestock industry. Farm investment portfolio is valued at $58.335 million and includes three properties located near Forbes in New South Wales, including Merriment, Wyalong and Yarranlea.

Duxton is expanding its existing interests into a diversified portfolio of high-quality, efficient farms through acquisition and aggregation of land rich properties capable of demonstrating operational efficiencies and producing a diverse range of commodities to reduce risk. The cost of production has been flagged to be better than many other companies in the domain.

Commitments of at least $19 million for the IPO were already indicated while the IPO was punched in to raise about $22 million. The expected listing date for the group is February 08, 2018 while initial public offering closed in January 2018. Through the IPO, the group has offered a listed investment vehicle for exposure to a diverse commodity production portfolio with capital growth and dividend commitments. Then proceeds have been earmarked for acquiring farms, paying for general working capital, and paying the costs of the offer and listing on ASX. However, a portion of the proceeds might be used for reducing debt as well so not completely for growth prospects. While the board is an experienced one and the group seems to an interesting player, the risks to investment relate to change in global grain demand that can impact operating margins. It will be better to wait and watch for the trading upon listing along with any further update or development, to evaluate an appropriate investment opportunity.

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