Oportunitas: 11 Years In — Paper Profits, Still No Taxpayer Return – A Shepway Vox Team Investigation

Oportunitas Ltd a company wholly owned by Folkestone & Hythe District Council has never made a true profit for the council taxpayer since its incorporation in 2014. In each year’s accounts from 2015 to 2025/26, the company shows an accounting profit – but once the council’s financing costs are included, Oportunitas ends up in deficit. This analysis draws on every annual report from 2015 through 2025/26, explaining terms simply and showing how rent income, costs, and especially interest and revaluations have played out. We also track the balance sheet: assets, loans from the council, equity paid in, and tax provisions, year by year.

From the start (first accounts to March 2015) through 2025, rent and service income grew steadily (on the Profit and Loss), but so too did council loans and depreciation-like charges. In later years the properties were revalued downward, wiping out much of the paper profit. By 2024/25, Oportunitas reported an accounting profit before tax of £109k. But interest on council loans was £313k – leaving a small profit after tax of £85k that year. In plain terms: the council lent millions at high interest, and that interest swallowed the company’s gains. No matter that rental turnover increased, the interest burden meant no net gain for the council.

Profit & Loss – Line by Line

Looking closely at each year’s Profit & Loss statements reveals the detail:

• Turnover (Rent etc.) – This is what Oportunitas earns from letting homes. It rose from a few hundred thousand in the early years to £755k in 2024/25. (Split into rent vs other income isn’t detailed in the reports, but it’s largely rent from new housing projects.)

• Cost of Sales – Very small (maintenance on properties, negligible here).

• Gross Profit – Turnover minus those tiny costs. In 2025 it was £750k.

• Admin (Overhead) Costs – Salaries, insurance, management. These ran at roughly £250–£300k per year; in 2025 they were £257k.

• Revaluation Gains/Losses – Under accounting rules, the homes are “marked to market” value. This year’s report shows a £70k revaluation loss (the buildings were re-appraised lower). In good years (e.g. 2023) there were big gains (e.g. +£778k in 2024) that boosted profit on paper. But when values fall, it drags profit down. Crucially, these revaluation swings never touch cash flow – they’re just paper gains or losses.

• Operating Profit – After admin and revaluations. In 2025 it was £422k. (In 2024 it had been over £1m, thanks to that big revaluation gain.)

• Interest Expense – This is council loan interest (and any bank interest). Oportunitas pays the council roughly 6–7% on its debt. By 2025, interest was £313k. That alone wiped out most of the operating profit.

• Profit Before Tax – Operating profit minus interest. In 2025 that was £109k (down from £774k the year before).

• Tax Charges and Deferred Tax – Oportunitas pays almost no corporation tax (because allowances and losses carry forward). Instead it accrues a deferred tax provision on those unrealized revaluation gains – a liability on the balance sheet. The annual tax charge is minimal (e.g. £24k in 2025), but the deferred tax reserve has built up year by year (hundreds of thousands now). This is why the balance sheet shows a large provision in recent years (e.g. £576k in 2025).

In short, every year the council’s interest cost exceeds any accounting profit, once you strip out book revaluations. Even when the company “made a profit” on paper, the council was always subsidising it behind the scenes.

Current Directors Of Oportunitas

Balance Sheet Movements

Each year Oportunitas’s balance sheet grew as it acquired homes. Key lines:

• Fixed Assets (Properties) – Rose from under £0.8m in 2015 to over £13m by 2025, as new houses were bought or built.

• Current Assets – Modest (cash and short-term rents); not material to the big picture.

• Council Loans (Long-term Creditors) – This is the council’s lending to Oportunitas. It jumped from £813k in 2015 to about £6.32m by 2025 (blue line in Fig.1). There were big loan drawdowns in 2016–17 and again around 2023, correlating with property purchases. The extra debt financed the growing asset base. Typically, nearly all that debt is very long term – most repayments fall due after 5 years.

• Share Capital & Premium (Equity) – The council has only put in a relatively small amount of equity, compared to loans. Oportunitas shares went from just 1 £1 share in 2015 to 2,515 £1 shares by 2022. More importantly, the “share premium” account (additional paid-in equity) rose from £0 in 2015 to £4.906m by 2022. After 2022, this stayed flat at £4.906m (all in by that point). Together, total equity injected was under £5m, while loans exceeded £6m.

• Retained Earnings (Profit & Loss Reserve) – Early on this was negative (losses carried forward). By 2025 it’s positive (£1.876m), reflecting past profits retained in the company books. But remember, this is accounting profit. All that retained profit was absorbed by interest payments in reality.

• Net Assets – The company’s net worth is now about £6.78m. But most of this is tied up in asset revaluations and the unearned equity from the council.

Council Investment Profile

• Equity vs Loans: The council’s investment (equity + loans) shifted heavily towards debt. By 2025, roughly £6.3m loan vs £4.9m equity has been provided. Fig.1 shows loans far outstrip equity. In practice, the council has funded over 50% of all asset purchases via loans.

• Loan Terms: The loans are mostly on annuity terms (akin to mortgages) with interest set around 6–7%. Only a tiny portion is short-term: almost all the £6m+ debt is “after more than one year”. The council hasn’t called in these loans; they run over decades, with large balloon payments in the distant future.

• Interest Load: In 2024/25 alone, Oportunitas paid £313k in interest, meaning the council earned that much on its loan. But this interest left no profit for anyone else. If you subtract all interest over the years, the company’s net cash flow to taxpayers is essentially zero or negative.

2025/26 Mid-Year Outlook

The board’s latest update to the council (Q2 of 2025/26 – Agenda Item 9) shows little change. Rental income is on track with budget, and operating costs are similar. However, because so much margin was already eroded by interest, the projected profit for the year is small. In fact, as one report notes, no adjustment to the financing terms has yet been made in 2024/25 accounts, meaning the interest outlay remains high. (Specialist advice on whether to change the loan rate was still pending.) The mid-year figures imply the final year-end result will again be a tiny surplus after tax – certainly nowhere near compensating the council’s cost of capital.

Good, Bad, Ugly

• Good: Oportunitas has grown an asset base of valuable housing for homeless families. The company’s net worth rose from negative in 2015 to £6.78m today, providing long-term homes. In some years it made paper profits (e.g. £577k in 2023/24), and rental income is building. The portfolio scale (75 homes by 2025) is a positive social outcome.

• Bad: The cost of borrowing from the council has consistently wiped out any surplus. Even after a year’s accounting profit, the council’s interest charge means the taxpayer effectively earns nothing. The council has poured in nearly £11m (equity+debt) but hasn’t seen a net return in cash. Interest payments are treated as a cost to the council’s own budget – so council borrowing subsidized itself. Also, complex rules on revaluation have created a ticking deferred tax liability (£576k in 2025), a paper loss if properties ever sell at book value.

• Ugly: The combination of no profits and rising debt means shadow risk to the council’s accounts. Were the council to require a market valuation, Oportunitas is underwater. The company’s accumulated retained losses (the P&L reserve) were millions negative in early years, reflecting real cash deficits. Only by steadily injecting equity and deferring interest (so far) has Oportunitas limped along. Future rate hikes or property market dips could force even bigger deficits. In sum, while Oportunitas exists for public good, it has never been a commercial success once loans are counted.

Sources: Audited accounts and board reports for Oportunitas Ltd (FY2015–FY2025) from Folkestone & Hythe District Council. Charts by analysis of these official figures.

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The Shepway Vox Team

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