Declining pipeline prompts Goldman Sachs-supported TopHat modular to halt production.
TopHat, a UK modular builder backed by Goldman Sachs, has announced plans to wind down its modular housing operations. The decision comes amid tough market conditions and a declining project pipeline, resulting in significant changes for the Derby-based company.
In a statement, TopHat acknowledged the challenges faced and noted the business’s intent to assess future options after an orderly shutdown of its volumetric operations. “We believe there is still a need for both 3D and 2D modular systems in the UK, and we hope to take advantage of this demand in the future,” the company stated.
TopHat, which employs 212 workers at its 11,600 square metre factory, reported a pre-tax loss of £5.1m (AUD 9.8m) for the year ending 31 October 2022. This comes despite nearly doubling turnover to £13.4m (AUD 25.7m). A consultation process has been launched, which could see job cuts as part of the winding-down phase.
This decision follows a series of financial challenges for TopHat. Earlier this year, UK housebuilder Persimmon wrote off £25m (AUD 47.9m) in investments and loans to the company. TopHat had originally planned to open a 60,000 square metre manufacturing site in the South Midlands, aiming to expand its capacity significantly. However, those plans have been shelved due to market uncertainties, casting doubt over the long-term future of the ambitious project.
TopHat is the latest in a series of UK modular firms to experience financial and operational difficulties. In addition to backing from Goldman Sachs, TopHat received a £15m (AUD 28.7m) loan from Homes England last year to support its operations. Despite these challenges, the company has continued to advocate for modular construction as a means of addressing the UK’s housing crisis.
This development follows similar issues across the UK modular housing industry.
See: https://tophat.io/