KOSHER POULTRY LIMITED
Company number 04875169 · Monitor this company
This analysis was written by an AI from the company's public filings. It may contain errors or omissions and is not financial or professional advice.
Credit Analysis: KOSHER POULTRY LIMITED
1. Credit Opinion: DECLINE
Reasoning: The company exhibits a sustained and accelerating deterioration in financial health that presents unacceptable credit risk for unsecured lending. Net assets have declined by approximately 52% over four years (from £183,304 in 2020 to £88,067 in 2024), cash reserves have been effectively depleted (from £298,627 in 2017 to nil in 2024), and the P&L reserve shows consistent annual losses (£25,660 loss in the latest year alone). The dramatic increase in current liabilities from £303,709 to £447,623 (47% year-on-year), combined with near-zero cash, indicates the business is likely trading through creditor accumulation rather than profitable operations. Any new credit facility would be subordinated to a rapidly expanding creditor base with limited prospect of repayment from cash flows.
2. Financial Strength
Balance Sheet Summary (October 2024):
| Item | 2024 | 2023 | Movement |
|---|---|---|---|
| Fixed Assets | £23,510 | £27,681 | -15% |
| Current Assets | £547,129 | £429,973 | +27% |
| Current Liabilities | (£447,623) | (£303,709) | +47% |
| Net Current Assets | £99,506 | £126,264 | -21% |
| Long-term Liabilities | (£34,949) | (£40,218) | -13% |
| Net Assets | £88,067 | £113,727 | -23% |
Key Concerns:
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Eroding Equity Base: Shareholders' funds have declined every year since 2020, indicating persistent trading losses. The P&L reserve has fallen from £113,100 to £87,440 in the latest year, representing a loss of £25,660. Cumulative losses over the past four years exceed £95,000.
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Minimal Tangible Asset Backing: Fixed assets of only £23,510 (primarily fittings, vehicles, and plant) offer negligible security value. The balance sheet is dominated by debtors (£545,129), which are inherently less reliable as collateral.
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High Leverage: Total liabilities of £482,572 against net assets of £88,067 gives a debt-to-equity ratio of approximately 5.5:1. This is dangerously elevated for a small food production business.
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Minimal Share Capital: Called-up share capital remains at just £627, indicating the business has never been substantially equity-funded and relies almost entirely on retained profits (now depleting) and creditor financing.
3. Cash Flow Assessment
Cash Position Trajectory:
| Year | Cash | Change |
|---|---|---|
| 2017 | £298,627 | - |
| 2018 | £161,667 | -46% |
| 2019 | £112,586 | -30% |
| 2020 | £114,133 | +1% |
| 2021 | £145,277 | +27% |
| 2022 | £37,808 | -74% |
| 2023 | £6,856 | -82% |
| 2024 | Nil | -100% |
Critical Findings:
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Cash Exhausted: The company reports zero cash at bank as at 31 October 2024. This is the most significant red flag in this assessment. A business with no cash reserves cannot absorb any operational shock or unexpected expenditure.
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Debtors as Cash Proxy: With £545,129 in debtors (up 29% from £421,117), the company appears to be extending credit to customers whilst having no cash buffer itself. This creates a dangerous dependency on timely customer payments. If debtor collection extends even modestly, the company faces immediate liquidity crisis.
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Working Capital Under Pressure: While net current assets remain positive at £99,506, the quality of this position is questionable. Current assets are dominated by debtors (99.6% of current assets), with only £2,000 in stock and no cash. The current ratio has deteriorated from 1.42:1 to 1.22:1, and the quick ratio (excluding stock) is barely above 1.0.
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Creditor Build-Up: The 47% increase in current liabilities suggests the company may be stretching supplier payments to preserve cash. This is unsustainable and risks supply chain disruption in a perishable goods business.
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No Dividend History: The absence of dividend payments is a minor positive, suggesting management has not extracted value whilst the business deteriorates.
4. Monitoring Points
If any credit relationship were to be considered (which I do not recommend without significant restructuring), the following metrics require close surveillance:
| Metric | Current Position | Risk Threshold | Status |
|---|---|---|---|
| Cash Balance | £0 | Below £10,000 | CRITICAL |
| Current Ratio | 1.22:1 | Below 1.5:1 | WARNING |
| Debtor Days | Likely 60-90+ days | Above 45 days | WARNING |
| Creditor Days | Likely 90+ days | Above 60 days | WARNING |
| Net Assets Trend | -23% YoY | Any decline | CRITICAL |
| P&L Reserve Trend | -23% YoY | Any decline | CRITICAL |
| Debt-to-Equity Ratio | 5.5:1 | Above 2:1 | CRITICAL |
Additional Monitoring Requirements: - Monthly management accounts to track cash flow and debtor collection - Quarterly review of aged debtor and creditor reports - Monitoring of any statutory payment defaults (VAT, PAYE) - Watch for county court judgments or supplier credit insurance withdrawal - Track any changes in director composition or PSC structure - Alert if trade creditors exceed £500,000 or if debtors exceed 120 days outstanding
Additional Risk Factors
Sector Considerations: The kosher poultry market is a niche segment with limited customer base. Food production businesses face margin pressure from input cost inflation (feed, energy, labour) and have limited pricing power. The perishable nature of inventory means stock provides minimal buffer.
Governance Concerns: The PSC register shows three individuals each holding 25-50% ownership, yet only two directors are listed. Abraham Swissa appears as a PSC but not as a director, which may create governance complexity. The small share capital (£627) and absence of formal audit reduce financial transparency.
Filing Compliance: Accounts are filed on time and the company maintains active status, which is a minor positive indicating administrative competence.