Live Duxton Broadacre Farms Ltd

Chairman, Ed Peter discusses Duxton Broadacre Farms Ltd and the IPO (7:14 mins)

Fixed Priced IPOType of Offer
29 Nov 17Offer Open
22 Dec 17Pay By
$1.50Price
$12-22 millionSize of Offer
$2,250Minimum Bid
Taylor CollisonLead Manager
39
2735

Overview

Duxton Broadacre Farms Ltd (ASX: DBF) will seek to capitalise on the increasing demand for grain as a vital input into a range of staple food products, the alcohol industry and the livestock industry. The Company will look to generate income and capital gains for Investors through the operation of broadacre farms in Australia, that are positioned to benefit from potential increase in grain prices (among other commodity prices) and appreciation in land values.

The Company’s existing farm investment portfolio is valued at $58.335 million and comprises three properties located near Forbes in New South Wales, including Merriment, Wyalong and Yarranlea, as detailed below: 

4 The lease will expire on or before 31 December 2017 and will not be renewed.

Once listed, the Company is expected to be the only ASX listed vehicle of its type in Australia providing its investors with direct exposure grain production.

The Company’s main investment objectives are to:

  • provide a listed investment vehicle that gives investors direct exposure to a diverse commodity production portfolio
  • generate an income stream for investors from the yield of the portfolio in the form of dividends
  • provide capital growth over the long term and to benefit over the long term from the forecast appreciation in grain prices from their current historical record lows

Offer Overview

Duxton Broadacre Farms Ltd is looking to raise up to $22 million via its IPO, and will have an estimated market capitalisation of $66.1 million at maximum subscription.   The Company intends to generate an income stream for investors in the form of franked dividends. The Company will aim to pay out 40% to 60% of its operating profit to Shareholders annually from March 2019 onwards.

The proceeds of the Offer will be used to acquire farms that fit the farm investment criteria, pay for general working capital, to reduce debt and to pay the costs of the Offer and listing on ASX.

Company Objectives

The Company’s objective is to create a diversified portfolio of high-quality, efficient broadacre farms to capitalise on the growing demand for grains, livestock and cotton. The investment thesis is driven by long-term growth in global grain demand translating to significant operating margins and improved farmland values over time, providing shareholders with both ongoing annual operational yield and longer-term capital growth.  The Company’s key commodity exposure is to both domestic and international grain prices.

The Company mitigates customer risk by ensuring it is not selling all of its products to a single customer, and focusing on high quality counterparties.  The Company further manages risk by actively managing key operating costs, a developed commodity hedging strategy to minimise price risk, and diversification of operations across types of crops, livestock production, geographical regions, and water resources.

Operations Management

The Company has contracted Farm Managers to provide day-to-day management of the broadacre farms (subject to the Company’s supervision). The Company management team will supervise and report on the performance of the Farm Managers and be responsible for overall farm operations and administration. The Company’s management team will be responsible for the day-to-day administration of the Company.

The Company has contracted the Investment Manager to assist with the administration aspects of the investment management services, and to identify, assess, propose and execute the broadacre investments.

Investment Manager

The Company has entered into an Investment Management Agreement with Duxton Capital (Australia). The Duxton Group is highly experienced in the alternative assets investment sphere has in excess of A$720 million in assets under management or advice, of which A$535 million comprises agricultural investments. Its agricultural assets are diversified across 21 operations spanning 540,000 hectares of farmland over 30 commodities and five continents.

Board and Management

The Board is highly experienced in the agricultural sphere, with a combined 109 years’ experience amongst them in investing and managing agricultural businesses. This experience extends across both Australian and international agriculture.  The board includes:

  • Ed Peter, CEO and Lead Portfolio Manager – with over 30 years’ experience, Ed was the former head of Deutsche Asset Management Asia Pacific, Middle East and North Africa.
  • Tony Hamilton, Director - has been farming since 1982 and has extensive experience in managing broadacre properties.
  • Stephen Duerden, Director - former COO and Director for both the Complex Assets Investments Team and the Singapore operation of Deutsche Bank Asset Management Asia.
  • Mark Harvey, Independent Director and Deputy Chairman - has more than 35 years of experience in agriculture and agribusiness.
  • Wade Dabinett, Independent Director - has over 13 years' of experience in the Australian grain industry, encompasses grain trading, storage, handling and production.

 

As set out in Section 7 of the Prospectus, Duxton Broadacre Farms Ltd is subject to a range of risks, including but not limited to adverse weather conditions, commodity prices, input costs and illiquidity.

 

Section 734(6) disclosure: The issuer of the securities is Duxton Broadacre Farms Ltd ACN 129 249 243. The securities to be issued are ordinary shares. The disclosure document for the offer can be obtained by clicking on the link above. The offers of the securities are made in, or accompanied by, a copy of the disclosure document. Investors should consider the disclosure document in deciding whether to acquire the securities. Anyone who wants to acquire the securities will need to complete the application form that will be in or will accompany the disclosure document (which can be done via the electronic application form which will become available by clicking the bid button above).‚Äč

OnMarket has a limited allocation. The offer may close early and the 'Pay By' dates may change. Bids over $10,000 may be scaled back more heavily. Duplicate bids under the same investment profile or investor name or residential address may be cancelled.

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IPO Live

Duxton Broadacre Farms Ltd ASX: DBF

Duxton Broadacre Farms Ltd

Update: Wise-owl independent research report now available here

Duxton Broadacre Farms Ltd (ASX: DBF) provides investors the opportunity to access the Australian grain industry via a portfolio of diversified dry land and irrigated broadacre farms located near Forbes in NSW. The Company seeks to capitalise on the increasing demand for grain as a vital input into staple food products and the livestock industry.

Duxton is expected to be the only ASX listed vehicle of its type in Australia, providing its investors with direct exposure grain production.

$1.50Price
$12-22 millionSize of Offer
29 Nov 17Offer Open
22 Dec 17Pay By
IPO OnMarket Bidding Closed

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$0.20Price
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