Lachlan Farming Limited

Fund Overview
Fund Assets
Performance & Financial Information
Share Prices

 

Fund Overview

Lachlan Farming Limited (LFL) is an unlisted public company, which was previously involved in large-scale cotton farming in the Hillston district of central New South Wales. It was established in June 1998 and at that time was one of the largest agricultural developments in Australia.

LFL ceased farming operations in June 2008 and is currently progressing its strategy of selling down its land and water assets. The final significant LFL asset to be sold is the Mooral property which includes the land, water and maturing almond orchards. The property has been leased to RFM RiverBank, a unit trust also managed by RFM, until the sale is complete.

LFL has a heightened counterparty risk as a result of Great Southern Limited's (GSL) collapse. RFM RiverBank sublet the Mooral property to Great Southern Managers Australia (GSMAL), a subsidiary of GSL. GSMAL did not make a lease payment due to RiverBank in October 2009, although RiverBank did meet its lease obligations to LFL.

LFL is closed to new investment.

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Fund Assets

LFL’s asset realisation program is partially complete. At present, LFL holds $8.5m in cash, along with the Mooral property, which has been leased to RFM Riverbank. Mooral contains 808 hectares of maturing almond plantings (established in 2007 and 2008), with the remaining 2525 hectares comprised of irrigation channels, timber river frontage along the Lachlan River and grazing country. LFL also holds a several water entitlements associated with Mooral.

LFL was in the process of negotiating the sale of Mooral to RFM RiverBank (RiverBank), however these negotiations were interrupted by the collapse of the Great Southern Group. At present, RiverBank is engaged in Capital Raising, in order to mitigate its exposure to GSMAL and to ensure that sufficient capital is available to purchase Mooral.

A purchase price of $13.782 million, including water entitlements, has been agreed to by LFL and RFM as manager for RiverBank. The directors of LFL believe the sale to RFM is the best option to realise Mooral’s value, especially in the current market. This sale is dependent upon the success of the RiverBank capital raising, and the divestment from RFM from GSL. Should these events occur, the sale of Mooral is expected to occur in this financial year. Once the sale of Mooral is complete, LFL will be able to offer shareholders a buyback facility with return of capital planned over the next 24 months. Total capital returned is forecast to be approximately 0.90c per share, with payments beginning in this financial year and concluding in September 2011.

If the RiverBank proposal does not proceed, the directors of LFL will consider other buyers for Mooral.

Table 1: LFL Assets
Lachlan Farming Limited as at 30 June 2009
Units on Issue 31,571,118
Total Assets $27,107,650
Net Assets $26,941,839

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Performance & Financial Information

Table 2: LFL Financial Year Returns
Financial Year Returns 2009 2008 2007 2006 2005
Distribution 0.00% 0.00% 0.00% 0.00% 0.00%
Growth 160.59% 16.84% -57.61% -3.28% -19.69%
Total Return 160.59% 16.84% -57.61% -3.28% -19.69%
Grossed Up Distribution 0.00% 0.00% 0.00% 0.00% 0.00%
Grossed Up Total Return 160.59% 16.84% -57.61% -3.28% -19.69%

Returns inclusive of Franking Credits.
Past performance is not a reliable indicator of future performance.

 

Table 3: LFL Rolling Annual Returns
Rolling Annual Returns
(as at 30 Sep 2009)		 1 Mth 3 Mth 6 Mth 1 Yr 2 Yr* 3 Yr* 4 Yr* 5 Yr* Inception*
Distribution Returns 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00%
Growth Returns 0.96% 3.25% 101.59% 101.59% 73.50% 11.17% 7.68% 4.20% -1.69%
Total Returns 0.96% 3.25% 101.59% 101.59% 73.50% 11.17% 7.68% 4.20% -1.69%
Grossed Up Distribution Returns 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00%
Grossed Up Total Returns1 0.96% 3.25% 101.59% 101.59% 73.50% 11.17% 7.68% 4.20% -1.69%

* Annualised figures.
1 Effective return including Franking Credits distributed to Unitholders.

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Share Prices

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Table 4: LFL Share Price History

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Key Documents