Company Number: SC706151

Analysis Date: 2025-07-20 15:57 UTC

1. Credit Opinion: APPROVE – Feelright Pigs Ltd demonstrates improving financial stability with positive net assets and net current assets growth over the last three years. The company’s ability to maintain a healthy working capital position and steadily increase shareholders’ funds indicates adequate capacity to meet short-term obligations and service credit facilities. The absence of overdue filings and the presence of experienced directors with relevant industry background further support creditworthiness. However, the very low cash balance and concentration of control should be monitored.

2. Financial Strength: The company’s net assets increased from a negative £45,888 in 2021 to a positive £303,719 in 2024, reflecting a significant turnaround in balance sheet strength. Tangible fixed assets are modest (£10,766) relative to current assets (£1.49M), suggesting a working capital-intensive business model typical in livestock raising. The current liabilities are well covered by current assets, resulting in net current assets of £588,995 in 2024, up from £468,812 the previous year. Long-term liabilities reduced from £387,638 in 2023 to £293,350 in 2024, indicating some deleveraging. Overall, the balance sheet portrays a small but growing operation with a stable equity base.

3. Cash Flow Assessment: While the company holds minimal cash (£2) at the year-end, this is offset by strong current assets mainly composed of stock (£1.33M) and receivables (£155,855). The large stock holding is consistent with inventory of pigs but introduces risk if market conditions deteriorate or livestock valuation falls. The healthy net current assets indicate liquidity to meet short-term liabilities, but the negligible cash suggests limited immediate cash reserves, highlighting the need for careful management of working capital and cash conversion cycles. Monitoring debtor collection and inventory turnover is important to ensure ongoing liquidity.

4. Monitoring Points:

• Cash balances and liquidity trends, given the very low year-end cash.
• Inventory valuation and turnover, as stock is a large component of current assets.
• Debtor ageing and collectability to maintain working capital efficiency.
• Long-term debt reduction progress to improve solvency.
• Business performance indicators in the swine raising sector, sensitive to commodity prices and animal health risks.
• Director and shareholder concentration risks given two PSCs control 25-50% each and have rights to appoint/remove directors.