Duxton Farms - Independent Valuation Update - 31 July 2024
DUXTON FARMS LTD (DBF) Share Update July 2024 Wednesday 31st
Duxton Farms Announces 17.1% Increase in Asset Valuation
Duxton Farms Limited (ASX: DUX) has announced a substantial increase in the valuation of its land, water, and structural assets as of 30 June 2024.
Instant Summary:
- Total asset valuation increased by 17.1% to $130.62 million.
- Significant valuation increase for Piambie property by 54.0%.
- Merriment property saw a slight decline in valuation by 3.8%.
- Timberscombe property sold for $70 million in June 2024.
- Valuation conducted by CBRE and Knight Frank.
Valuation Details
Duxton Farms Limited has engaged CBRE and Knight Frank to provide updated independent valuation reports for the company's land, water, and structural assets as of 30 June 2024. The total valuation of these assets has been assessed at $130,620,000, representing a 17.1% increase since 30 June 2023.
CBRE conducted the valuation for the assets in New South Wales, while Knight Frank evaluated the company's pistachio development at Piambie. The significant increase in valuation highlights the tangible value inherent in Duxton Farms' balance sheet.
Property Breakdown
The valuation breakdown by property is as follows:
- Walla Wallah: $20,700,000 (6.2% increase)
- Cowaribin: $6,250,000 (13.6% increase)
- Merriment: $6,250,000 (3.8% decrease)
- Yarranlea: $15,350,000 (22.8% increase)
- West Plains: $17,500,000 (12.9% increase)
- Lenborough: $4,600,000 (15.0% increase)
- Kentucky: $45,650,000 (17.8% increase)
- Piambie: $14,320,000 (54.0% increase)
It's important to note that the Timberscombe property, which was sold for $70,000,000 in June 2024, is not included in the above valuations.
Valuation Methodology
Investors should be aware that Duxton Farms recently rotated valuers. Due to slight differences in valuation methodologies between service providers, there were small shifts in per hectare land values. This led to a drop in value at Merriment, which the company views as a one-off impact rather than indicative of the market.
The significant re-rate in the valuation of the Piambie property is primarily due to the successful establishment of a 120-hectare pistachio development in early FY2024. The figures do not account for the related capital expenditure required to achieve this uplift, although the company notes a healthy margin of about 16% in the value of the property above the associated cost of development.
The 17.1% increase in asset valuation is a positive indicator for Duxton Farms' financial health and could lead to an uptick in investor confidence. The substantial increase in the valuation of the Piambie property, driven by the successful pistachio development, showcases the company's growth potential. However, the slight decline in the Merriment property's value due to valuation methodology changes may cause some concern among investors.
Investor Reaction:
Analysts are likely to view the overall increase in asset valuation positively, particularly the significant uplift in the Piambie property. The successful establishment of the pistachio development is a strong indicator of the company's strategic growth initiatives. However, the slight decline in Merriment's value may prompt some investors to scrutinize the valuation methodologies used.
Conclusion:
Investors should consider the overall positive trend in Duxton Farms' asset valuations and the company's strategic growth initiatives. The substantial increase in the Piambie property's value is particularly noteworthy. As always, investors are encouraged to stay informed and monitor further developments.