Modular housing specialist ModPods International has appointed administrators after spiralling relocation costs hit its bottom line.
KRE Corporate Recovery, which was appointed to administer ModPods’ collapse, said relocating its trading site was “significantly more costly and took much longer to finalise than anticipated”.
All 122 staff members have now been made redundant after KRE failed to find a buyer for the firm.
The administrator also blamed “difficult trading circumstances”, which compounded the relocation challenges.
“The delays incurred resulted in the company being closed for a number of months, putting significant pressure on the company’s cashflow and a dispute issue with an existing client – all happening in already difficult trading circumstances,” KRE said.
ModPods, which was based in Coventry, specialised in offsite manufacturing of modular housing pods for the public and private sector, and worked in areas including Warwickshire, Norfolk and the West Midlands.
In February it scooped a place on a mega-framework with a total worth of more than £3bn, to deliver new-build work using modern methods of construction for the Communities and Housing Investment Consortium.
The firm was not big enough to file full accounts, but ModPods posted fixed assets of £1.7m in its most recent results, for the year to 31 March 2023. It also owed £4.5m to creditors at that time, about half of which was due within the next year.
KRE said it had agreed a deal to sell ModPods’ assets to HPG Developments Ltd, which is based in the Midlands.
ModPods is the latest of a number of modular firms to go under. Despite a strong start for such businesses in the sector, concerns started to grow over the low margins associated with modular developments.
Modular specialist Urban Splash House entered administration in May 2022, after it blamed operating issues at its factory in Alfreton.
Other specialists including Ilke Homes, Mid Group, Eco Modular Buildings and Caledonian Modular have also collapsed in recent years.
Meanwhile, Laing O’Rourke said in January that it was considering cutting 60 jobs at its offsite factory, in a bid to reduce operating costs.
Last week, TopHat narrowly avoided being wound up after developer Harworth filed winding-up petitions against two of its entities. But both companies later agreed to drop the case, as revealed by Construction News.
The House of Lords Built Environment Committee warned in January that it had “limited confidence” that the then government had a coherent strategy for modular construction.
