Offsite specialist TopHat shrinks losses

Offsite firm TopHat has cut its losses after receiving a boost from two new clients.

The Derby-based firm, which is backed by US investment bank Goldman Sachs, tabled pre-tax losses of £19.4m in the year to 31 October 2021, in comparison with £21.3m in the year prior.

Turnover was also boosted to £12.4m from £6.3m, as the specialist recovered from a year affected by the COVID-19 pandemic.

The effects of the globally disruptive event “set back the company’s growth by over 18 months”, the company confirmed.

But TopHat attributed its improved performance this year to agreements it penned with Bristol-based BoKlok, and Urban and Civic, which is based in Rugby. The contractor agreed a five-year framework with BoKlok.

Currently, TopHat is not profitable or cash-generative. But, in June, it announced plans to build a £23m 650,000-square-foot modular factory, which will enable it to deliver “strong profitability and cashflow” within three years.

The new factory, planned for Corby in Northumberland, will open in 2023.

Business is also expanding, as the group moves into producing apartments, which will be manufactured from this summer, opening up a “significant new revenue stream”.

TopHat chief executive Jordan Rosenhaus said: “The directors are confident in the TopHat business plan, underpinned by the development of the second factory and the strong pipeline.”

More than £130m has been invested in TopHat, the majority of which has come from Goldman Sachs.

TopHat’s improving performance comes in sharp contrast to the growing number of modular firms that have struggled financially in recent months. In May, Urban Splash’s modular spin-off collapsed.

Meanwhile, Newark-based contractor Caledonian Modular made losses of more than £20m in just 18 months before going into administration in March. Construction solutions firm JRL Group purchased the company at the beginning of April.

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