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Strategic acquisition of M-AR to stabilise the modular builder’s future after a turbulent financial period.
In a significant turn of events, UK-based modular builder Module-AR Ltd (M-AR), headquartered in Hull, has been acquired out of administration.
M-AR’s journey into administration began in late October, following a period of rapid growth but increasing financial strain. The company, known for its innovative approach to modular construction, had reported a considerable increase in turnover, reaching nearly £30 million (AUD $57 million) in the year ending April 2022, a 49% surge from the previous year. This growth phase included the acquisition of a new 9,300 sqm base on Hull’s Freightliner Road, significantly expanding their production capacity to approximately 400 units per year.
Despite these expansions and completing major projects like a 64-unit retirement village in Doncaster, M-AR faced hurdles. Rising prices and project delays began to impact its financial stability. In its latest financial statements, while pre-tax profits showed a slight increase, post-tax profits declined significantly from £783,203 (AUD $1.5 million) in 2021 to just under £640,000 (AUD $1.2 million) The company also reported debts close to £7.1 million (AUD $13.5 million) to creditors.
The situation culminated in M-AR entering administration, with Dean Watson and Paul Stanley of Begbies Traynor, alongside Rikki Burton of Anderson Brookes, appointed as joint administrators. The administrators launched a marketing campaign, negotiating with several potential buyers to salvage the company.
The successful acquisition of M-AR’s business and assets by an unnamed third party marks a crucial rescue deal. Dean Watson, a partner at Begbies Traynor and joint administrator, expressed satisfaction with the outcome, emphasising that the sale as a going concern not only saves jobs but also allows operations to continue, particularly noteworthy in the current challenging economic climate for the construction sector.
M-AR, with its history of over 15 years in the industry, had made a name for itself with its forward-thinking and collaborative approach to construction. The company’s commitment to driving change through innovation had seen it securing places on the UK Government’s £10 billion (AUD $19.1 billion) Offsite Solutions Framework and the LHC Procurement Group’s Modern Methods of Construction of New Homes Framework.
Despite facing financial setbacks, the company managed to maintain strong turnover.
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