JOPPA PROPERTIES LIMITED
Company number 04523410 · 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: Joppa Properties Limited
1. Credit Opinion: CONDITIONAL
Joppa Properties Limited presents a mixed credit profile. The company benefits from a substantial unencumbered property asset (£387,738) and has demonstrated excellent deleveraging discipline, reducing total liabilities from £193,910 in 2017 to just £24,273 in 2025. However, the company exhibits net current liabilities of £4,540, indicating working capital pressure, and recent financial performance shows marginal erosion of shareholder funds (£3,200 loss in FY2025). Credit facilities should be secured against the property asset with appropriate covenant coverage. Unsecured exposure would be imprudent given the liquidity constraints.
2. Financial Strength
Balance Sheet Composition (FY2025):
| Item | £ | % of Total Assets |
|---|---|---|
| Tangible Fixed Assets (Land & Buildings) | 387,738 | 95.2% |
| Cash at Bank | 19,733 | 4.8% |
| Total Assets | 407,471 | 100% |
| Current Liabilities | (24,273) | |
| Net Assets | 383,198 |
Key Observations:
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Asset Quality: The balance sheet is dominated by a single freehold property asset with no depreciation applied (indicating freehold land), valued at historical cost of £387,738. This represents 95.2% of total assets — highly concentrated and illiquid.
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Liability Reduction: The company has systematically de-geared. Total liabilities have fallen from £193,910 (2017) to £24,273 (2025) — an 87% reduction over eight years. This demonstrates strong financial stewardship and conservative management philosophy.
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No Long-Term Debt: The balance sheet shows no long-term liabilities. The company is effectively debt-free from a borrowing perspective, with remaining obligations consisting of trade creditors, taxation, and tenant deposits.
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Capitalisation: Share capital remains at the nominal £100, with all retained earnings held in the P&L reserve (£383,098). This provides a deep equity cushion, though it is entirely locked in the property asset.
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Gearing: With negligible borrowings (£133 bank loans/overdrafts) against £383,198 in shareholder funds, the company is conservatively geared. This provides significant capacity for secured borrowing.
Concern: The property is held at historical cost. Depending on acquisition date and location (Orpington, Kent — London fringe), the open market value could substantially exceed book value, providing additional hidden collateral. Conversely, no revaluation means we cannot confirm current market exposure.
3. Cash Flow Assessment
Liquidity Position:
| Metric | FY2025 | FY2024 | FY2023 |
|---|---|---|---|
| Current Ratio | 0.81x | 0.91x | 1.36x |
| Cash | £19,733 | £13,651 | £25,885 |
| Net Current Assets/(Liabilities) | (£4,540) | (£1,340) | £6,828 |
Analysis:
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Deteriorating Liquidity: The current ratio has declined from 1.36x (FY2023) to 0.81x (FY2025), moving below the 1.0x threshold. The company now has net current liabilities, meaning short-term obligations exceed liquid assets.
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Cash Volatility: Cash balances have fluctuated significantly: £37,615 (2016) → £33,585 (2017) → £4,824 (2018) → £2,364 (2019) → £24,575 (2020) → £5,860 (2021) → £21,453 (2022) → £25,885 (2023) → £13,651 (2024) → £19,733 (2025). This pattern suggests lumpy cash inflows consistent with property rental income received quarterly or semi-annually, with expenditure occurring unevenly.
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Current Liability Breakdown (FY2025):
- Tenant deposits: £7,450 (new — not present in FY2024)
- Taxation and social security: £15,378 (up 13% YoY)
- Trade creditors: £552 (stable)
- Bank loans/overdrafts: £133 (minimal)
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Other creditors: £760
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Tenant Deposits: The appearance of £7,450 in tenant deposits is actually positive — it indicates active tenancy arrangements and rental income generation. These deposits are repayable only upon lease termination, so they are not an immediate cash drain.
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Profitability Indicator: P&L reserve declined from £386,298 to £383,098, indicating a loss of approximately £3,200 for FY2025. This follows the pattern of marginal declines in net assets since the FY2023 peak of £394,566, suggesting the property may not be generating sufficient rental income to cover all operating costs and taxation.
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Working Capital Concern: The net current liability position of £4,540 is manageable given the £19,733 cash balance and the likely timing of rental receipts versus expenditure. However, it leaves no margin for unexpected costs or void periods.
4. Monitoring Points
| Metric | Current | Watch Threshold | Rationale |
|---|---|---|---|
| Current Ratio | 0.81x | <0.7x | Further deterioration would signal acute liquidity stress |
| Cash Balance | £19,733 | <£10,000 | Insufficient buffer for tax payments and operating costs |
| Net Assets Trend | Declining | 2 consecutive years of >5% decline | Would indicate structural loss-making |
| Taxation Liability | £15,378 | >£20,000 | Growing tax burden may indicate Corporation Tax on property disposals or underpayment |
| Tenant Deposits | £7,450 | £0 | Disappearance would signal vacant property and no rental income |
| Property Valuation | £387,738 (cost) | N/A | Obtain independent valuation to establish true collateral coverage |
| New Borrowing | £133 | Any significant increase | Company has been de-gearing; reversal signals strategy change |
Additional Monitoring Considerations:
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Property Valuation: The single asset is held at historical cost. For any secured lending decision, an independent RICS valuation is essential to establish current market value and loan-to-value ratio.
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Rental Income Verification: The accounts are filleted (abridged), so turnover figures are not disclosed. Request rental schedules and tenancy agreements to confirm income generation and lease terms.
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Related Party Transactions: Six directors from the same family (Keith-Jopp) with one PSC holding >75% control creates concentration risk. Verify whether the property is let to related parties at arm's length rates.
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Corporation Tax Exposure: The increase in taxation liabilities from £13,586 to £15,378 warrants investigation — this may include deferred tax or reflect taxable gains.
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Void Risk: As a single-property investment company, vacancy represents 100% income loss. Assess the local rental market in Orpington (BR5) and lease expiry dates.