Modular developer consults employees about cost-cutting measures amid “challenging” market conditions.

TopHat has opened a consultation with its staff as it plans to make around 70 redundancies to cut costs.

The modular developer, which posted a £20.4m pre-tax loss for the year to 31 October 2022, has plans to increase its capacity to 4,500 homes.

It intends to open a second factory, a 650,000 sq ft facility in Corby. Northamptonshire, this year in addition to its one at Derby.

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TopHat wants to build 4,500 homes annually

But a spokesperson confirmed the developer is now consulting with staff “as part of a programme to reduce the costs of the business in response to the prevailing challenging market”. According to its last set of results the firm had 212 employees.

The spokesperson added: “The changes are a prudent step to ensure the business maintains current delivery levels during 2024 and is well positioned for growth as the market returns.

“The medium and long-term need for volumetric modular homes is becoming ever clearer as traditional build capacity is constrained by the growing skills shortage. While cost cutting is always tough, these changes will put TopHat in pole position for growth when demand rebounds.”

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The company, which has yet to be profitable, posted turnover of £10.2m for the year to 31 October 2022. This was down on the £12.3m the previous year with its pre-tax loss increasing around 5% from the £19.5m posted the previous year.

Last year, TopHat raised £70m from investors including Aviva Capital Partners and Persimmon. The firm is majority owned by investment bank Goldman Sachs.