Goldman-Backed TopHat Calls Time On Modular Business In Fresh Blow To Industry
Goldman Sachs-backed modular housebuilder TopHat has announced that it is to wind down its modular housing operations, just a month after the firm had seen off a winding-up petition lodged by one of its creditors, Yorkshire-based developer Harworth.
Derby-based TopHat cited the “challenging market environment” and a dwindling pipeline for its decision.
“This orderly wind down of volumetric operations will put the business in a position to assess all future options,” the company said in a statement. “It is our strong belief that there is a continued need for category 1 [3D primary structural systems] and category 2 [2D primary structural systems] modular in the UK and we hope that we can capitalise on this in the future.”
TopHat had attracted blue-chip investors, including FTSE 100 housebuilder Persimmon and Aviva. Persimmon invested £25M and Aviva £20M last year for undisclosed stakes, while Goldman Sachs completed a total fundraising round of £70M. The modular firm also took a £15M loan from Homes England last year.
According to the firm’s most recent accounts for the year to 31 October 2022, TopHat employed 212 people at its 125K SF Derby factory and posted a pretax loss of £5.1M despite almost doubling turnover to £13.4M.
In February, the company launched a consultation over 70 potential job cuts, and in August, Persimmon announced that it had written off its £25M investment in TopHat.
TopHat announced in March that it had paused plans for a circa 650K SF manufacturing site in Corby, which was originally due to be operational last year. News that it is to wind down its modular operations means the fate of the plant, which was set to be seven times the size of the Derby facility, is uncertain.
TopHat is the latest in a series of modular firms to be hit by financial difficulties. In August, modular housing specialist ModPods International appointed administrators after relocation costs hit its bottom line.
Last year Bisnow reported that big-name investors like Fortress Investment Group, TDR Capital, Legal & General and Homes England faced potential losses of nearly £500M after the collapse or closure of three of the UK’s best-known modular homebuilding companies.
