Oportunitas Ltd: How £2.7m in Paper Gains Masked £254k in Trading Losses at Folkestone & Hythe Council

At Folkestone & Hythe District Council’s Cabinet meeting on 14 October, Councillor Jeremy Speakman asked a rather sensible question. How had the council’s property company, Oportunitas Ltd, managed to increase the value of its property portfolio by £733,200 when the wider property market wasn’t exactly setting the world alight?

Finance officer Jonathan Smith explained that approximately £600,000 of the increase related to two newly built blocks. The company had changed valuers, and the new firm was comfortable with its assessment. Smith told councillors he didn’t expect the auditors to raise any particular objections.

Comfortable valuations are all very well. But after examining eleven years of Oportunitas’s accounts, alongside years of council reports, we’re rather less comfortable with what the figures reveal.

The company has accumulated millions in accounting gains from rising property valuations while its underlying trading business has spent most of its existence losing money.

When £1.9 million isn’t what it seems

Oportunitas was established in 2014 to purchase and rent properties at market rates, providing additional housing while generating income for the council. Since then, Folkestone & Hythe District Council (FHDC) has invested approximately £11.7 million, including £6.9 million financed through borrowing and £4.8 million from reserves. Today, the company owns 75 residential properties and one vacant commercial unit.

Its audited accounts for March 2025 showed £1,876,128 in retained earnings. To anyone unfamiliar with company accounts, that might sound like nearly £1.9 million accumulated from running a profitable business.

Unfortunately, there’s a rather large catch.

Our examination of the accounts between 2014 and 2025, found approximately £2.706 million in cumulative unrealised property revaluation gains. After accounting for £575,899 in deferred tax, the underlying trading figures reveal approximately £253,800 in accumulated losses across the company’s first eleven financial years. The reconstruction closely matches Oportunitas’s own reported accumulated operating deficit.

In plain English, much of the apparent accumulated profit comes from properties being assessed as worth more, rather than from money earned by renting them out.

The eleven-year trading record tells the story. Nine years produced losses, with the business finally recording a substantial £179,639 trading surplus in 2024/25. That improvement was genuine, but it still wasn’t enough to wipe out the historical deficit.

The contrast becomes even clearer in 2023/24. Oportunitas recorded approximately £774,000 profit before tax, despite its underlying trading activities making a small loss. The difference was a £778,410 increase in the assessed value of its properties. Nobody needed to buy those properties for the gain to appear in the accounts.

Those gains are permitted under the accounting rules governing investment property. They aren’t necessarily fictitious, nor do they establish wrongdoing. But they aren’t rent collected, bills paid or cash available to spend. And if property valuations fall, the accounting benefit can disappear just as readily.

The £1.7 million profit that vanished

There’s another episode worth remembering.

In July 2025, Oportunitas presented provisional accounts showing almost £1.79 million profit after tax for 2024/25. A major contributor was a £1,716,785 accounting gain arising from proposed changes to its council loans.

Following further professional advice, the restructuring wasn’t implemented and the accounting entry was reversed. The final audited profit fell to just £85,654 after tax. That’s a reduction of more than £1.7 million between provisional and audited figures. The money hadn’t disappeared; the proposed accounting treatment had been removed.

Nor was that the only substantial valuation-related correction.

FHDC’s own accounts subsequently required a £3.567 million adjustment because its equity investment in Oportunitas had previously been undervalued. The council’s professional advisers had used incorrect assumptions in calculating its value. This was a separate error concerning the council’s investment, not Oportunitas’s individual properties.

Two different accounting episodes, both involving seven-figure adjustments. Neither proves financial misconduct, but together they raise uncomfortable questions about the reliability of provisional figures and the scrutiny applied to major financial assumptions.

A £98,000 profit, with a little help from tomorrow

That brings us back to October 2026.

Oportunitas reported a provisional £97,994 pre-tax trading profit for 2025/26, almost £88,300 better than its original budget.

Sounds encouraging.

But £53,241 of the improvement came from lower-than-expected interest on its council loans. Another £32,148 resulted from postponing external redecorations at 19 Castle Hill Avenue. The stock condition survey cost £10,265 less than expected, while additional rental income contributed just £6,901. Higher running costs offset some of those savings.

Presenting the figures, Oportunitas chairman Councillor Rich Holgate acknowledged that “part of the improvement is timing rather than structural”. Quite so. Putting off repairs doesn’t make them disappear. It simply means someone will have to pay for them later.

Indeed, an earlier Cabinet report from March 2023 recorded approximately £84,000 of planned repairs and survey expenditure being deferred. Now, following the eventual stock condition survey, the company faces approximately £127,000 of high-priority works in 2026/27, against a normal annual major-repairs provision of around £41,100.

Councillor Speakman questioned that difference too. Smith explained that money from the previous year’s provision had effectively been rolled forward to create a larger repairs budget.

Then there’s the commercial property at Grace Hill, Folkestone.

At Cabinet, Director of Housing & Operations, Andy Blaszkowicz disclosed that the property had suffered extensive flooding from flats above. A prolonged insurance dispute ended without the insurer paying for repairs. Advisers considered commercial demand weak, while conversion to residential use could cost £30,000 or more.

It’s currently valued at £50,000. For a property producing no rent, with unresolved damage and potentially expensive conversion works, that valuation deserves a closer look.

The dividends keep disappearing into the distance

The company’s future financial projections hardly suggest a sudden transformation.

For 2026/27, Oportunitas expects rental income of £829,623 but only £41,123 pre-tax trading profit. That’s a profit equivalent to roughly 5% of annual rental income, after its forecast expenses and loan interest. The company also projects its cash balance falling from £158,948 to £137,796.

And the council’s anticipated dividends? Those have been postponed again.

An earlier business plan forecast £385,000 in dividends over the five years from 2026/27 to 2030/31. The plan approved in June 2026 reduced that figure to £100,000, with nothing forecast until 2030/31. That’s £285,000 less in projected distributions.

To be fair, the company pays interest on its borrowing, which provides income to FHDC. Its properties also have substantial value and provide rented accommodation. But interest received by the council must be considered alongside its own financing costs, while repayment of loan principal isn’t the same as earning a profit. The council has changed its financial-return calculations and borrowing arrangements over the years, making consistent comparisons particularly important.

So it would be wrong to claim that the council has received no financial benefit whatsoever. Equally, positive company accounts don’t establish that taxpayers have received a satisfactory return on their investment.

So where has all this left us?

After eleven audited financial years, Oportunitas had accumulated approximately £254,000 in underlying trading losses. The provisional 2025/26 surplus reduces that deficit to around £156,000. Meanwhile, the company’s property portfolio has been revalued upwards by another £733,200, with the final 2025/26 accounts still awaiting completion.

There’s no evidence in the latest papers that Oportunitas is about to collapse. It owns valuable properties, generates rental income and expects to meet its immediate financial obligations.

But that’s a rather different achievement from becoming the dependable income-generating enterprise originally envisaged.

After twelve years, millions in public investment, repeated changes to financial forecasts, postponed dividends and substantial accounting adjustments, the council still needs to demonstrate the full economic return taxpayers have received.

You can revalue a building, rearrange a loan and postpone a repair. What you can’t do is turn those accounting and timing changes into rental income that never arrived.

Oportunitas has undoubtedly built itself a sizeable property portfolio.

The question is whether it’s built a genuinely successful business — or simply become very good at looking richer on paper than its trading record suggests.

The Shepway Vox Team

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