Modular housing specialist TopHat is drawing up plans to open a second factory, with annual capacity for 3,000 homes, despite reporting significant losses.
The firm’s current Derby factory has capacity for 1,000 homes, so the planned expansion would quadruple the company’s potential output.
The plans were revealed in an annual report filed at Companies House last week, which recorded a loss of £21.3m on turnover of £6.3m for the 12 months to 31 October 2020. The firm’s operating loss was £17.4m.
The company changed its reporting period in 2019, so comparisons with prior results are against a roughly seven-month period from 6 April to 31 October 2019, when the company reported an overall loss of £7.7m on turnover of £1m.
In the filing, founder and chief executive Jordan Rosenhaus wrote: “During its growth phase, the company continues to invest ahead of revenue, both in growing its capacity and developing its product offering.”
TopHat is majority owned by US investment bank Goldman Sachs, which ploughed £75m into the firm in April 2019. The business is currently organised under a Jersey-based parent company, TopHat Enterprises, with Derby-based TopHat Industries as the main UK trading entity, employing 159 people at the end of the financial year. Its results are reported above. Other parts of the group, TopHat Technologies, TopHat Corporate, TopHat Labs and TopHat Communities, reported operating losses for the year to October 2020 of £170,000, £277,000, £2.3m and £3.9m respectively.
After the end of the reporting period, the Jersey-based parent put £65m of share capital into TopHat Industries, bringing its balance sheet up to £16.2m in the black.
In his directors’ statement, Rosenhaus said TopHat had “invested heavily” in the development of modular houses as well as apartments blocks, the latter due to be deployed this summer at its Kitchener Barracks project in Chatham. He added that the firm has undertaken research and development into modular materials, components and prototypes, including a brick-style cladding system.
“Further investments have been made in the company’s software platform to integrate design, supply chain, manufacture and deployment,” Rosenhaus added. “This platform underpins the company’s ability to scale up production quickly and reliably.”
Additional factory capacity will support TopHat’s expansion plans. Last month, the firm was one of three offsite specialists appointed to a£600m framework set up by the National Housing Federation, alongside Ilke Homes and Impact Modular, with TopHat selected to provide low and medium-rise housing.
In May, TopHat was appointed by Skanksa-Ikea modular housing venture BokLok to deliver its first UK modular housing projects. This followed a separate delivery deal between TopHat and developer Urban & Civic, agreed in January.