Space4, a subsidiary of Westbury, has the capacity to build up to 5000 off-site houses a year – but Westbury only aims to produce 2000 for its own projects this year.
Colin Cole, deputy managing director of the housebuilder, said that two rivals were running trials on the system for their own use.
Cole said: "We would hope to have some good news on the deals by the end of 2003."
The deals would boost Space4, which this week reported a loss of £3.5m in the year to 28 February.
Westbury said Space4 would break even in the second half of this financial year.
Cole said Space4's market share might be boosted by difficulties at Torwood Homes, its principal UK rival in the prefabricated timber-frame market. Torwood supplied the Amphion consortium of 20 housing associations.
Cole confirmed that Westbury is on the acquisition trail again. He said: "In the last six or seven years we have acquired three companies. We will continue to look at other housebuilders and see whether any fit our strategy."
In its 12-month figures, Westbury announced a pre-tax profit of £83.3m, up 17% on the previous year. This takes into account amortisation of goodwill and exceptional costs related to the acquisition of Prowting last year.
Turnover increased 41% on last year's figure to £790.9m.
In his statement, chief executive Martin Donohue was downbeat about the government's planning reforms and its proposals for 200,000 new homes in the South-east.
Donohue said: "We are not convinced that the Planning and Compulsory Purchase Bill and communities plan will result in any significant alleviation of the difficulties that we and other housebuilders have experienced for many years."
The company believes that the bill's proposal to get rid of outline planning consent will make it more difficult to identify sites that can get detailed consent.