Poultry Unit Finance for a Contract Producer in Norfolk
£680,000 · 12 years · 6.30% fixed. A Norfolk arable farmer was contracted by a major poultry integrator to construct and operate two broiler houses on his farm.
The Client
Norfolk arable farmer
The Challenge
A Norfolk arable farmer was contracted by a major poultry integrator to construct and operate two broiler houses on his farm. The integrator provided the birds, feed, and veterinary support - the farmer provided the housing, labour, and utilities, receiving a contract growing fee. The two broiler houses required capital investment of £650,000.
Our Solution
Doulton arranged agricultural building and equipment finance assessed primarily on the poultry integrator contract - a major UK food producer with an excellent counterparty covenant. The contract growing fee income was predictable and the integrator's contract terms were reviewed and confirmed as providing adequate income to service the loan.
The Outcome
Both broiler houses constructed and operational within the integrator's programme. Annual growing fee income: £118,000. Loan service: £72,000. Net annual surplus: £46,000 in addition to the farm's existing arable income. Key highlights: Integrator contract covenant used as primary lending basis; Predictable growing fee income - £118k pa; Net surplus of £46k pa above loan service - material additional farm.