Company Number: 13909898

Analysis Date: 2025-07-20 17:08 UTC

1. Credit Opinion: CONDITIONAL APPROVAL
   Cullingworth Poultry Limited is an active private limited company engaged in poultry raising. The company is relatively young, incorporated in 2022, with positive reported profits and a solid equity base. However, the recent year’s financials show a significant reduction in net current assets and shareholders’ funds from £1.78M to £0.83M due to a large dividend payment of £2M, which materially reduced retained earnings. While the company maintains positive net assets and working capital, the decline in liquidity and equity warrants caution. Credit approval can be granted conditionally, subject to ongoing monitoring of cash flow and working capital trends, and confirmation that dividend distributions will not impair operational liquidity or debt servicing.

2. Financial Strength:

• Net assets stand at £830K as at 29 February 2024, down from £1.78M the previous year, reflecting dividend payout pressure.
• Fixed assets are minimal (£13.8K), indicating a low asset base and likely limited collateral.
• Current assets of £4.85M vs current liabilities of £4.03M yield a positive net current asset position (£818K), but this is materially lower than prior year (£1.76M).
• Debtors (£3.79M) constitute the largest portion of current assets, which may raise concerns about collection risk and cash conversion.
• Share capital is nominal (£29K), typical for private SMEs.
• The company is wholly owned by Cullingworth Commercials & Freight Services Limited, providing potential group support but also intercompany balances that require scrutiny.

3. Cash Flow Assessment:

• Cash at bank decreased significantly from £1.78M to £886K, indicating lower liquidity.
• High trade creditors (£2.96M) and amounts owed to group undertakings (£910K) suggest reliance on creditor financing; the company’s ability to manage payables and maintain supplier confidence is key.
• Working capital remains positive but declined, indicating tighter short-term liquidity.
• No income statement disclosed, but profit for the year was £1.05M before dividends, indicating operational profitability.
• The dividend of £2M exceeded the year’s profit, reducing retained earnings and potentially stressing cash flow.

4. Monitoring Points:

• Ongoing liquidity: monitor cash balances and debtor aging to ensure timely collections and avoid cash shortfalls.
• Working capital management: watch creditor days and debtor days to maintain healthy cycle.
• Dividend policy: ensure dividend payments remain sustainable and do not impair creditworthiness.
• Intercompany balances: monitor amounts owed to and from group companies for potential financial risk or dependency.
• Profit trends and operational cash generation: future accounts and management commentary are important.