CONNECT Modular has entered administration with all 38 employees being made redundant, following ‘significant’ financial challenges in recent months due to rising operational costs and losses made on previous contracts.
Part of Ayrshire-based The Wee House Group, related company Hope South West Limited has also entered provisional liquidation with 10 staff members being made redundant.
Michelle Elliot and Callum Carmichael, partners with FRP Advisory, have been appointed as joint administrators of Connect Modular and joint provisional liquidators to Hope South West.
The companies, which operated from a manufacturing facility in Cumnock, East Ayrshire, are said to have suffered significant financial challenges due to rising operational costs and losses made on previous contracts, which has placed ‘significant pressure on trading operations and cash flow’. Both companies have ceased trading and FRP is supporting employees with applications for compensation to the Redundancy Payments Service.
The Wee House Group is a provider of sustainable modular homes to housing associations, local authorities, and community trusts across the UK. In November, Project Scotland reported that Connect Modular, alongside West of Scotland Housing Association, had submitted plans for a 33-home net zero modular development in Glasgow, which would represent a first of its kind in the city.
The firm also scooped two accolades at the Chartered Institute of Housing Scotland’s Scotland Housing Awards 2024, for its delivery of 101 homes in Kilmarnock. The £17 million project, which was completed in July 2024, is Scotland’s largest modular low-rise, affordable housing development.
Michelle Elliot, partner at FRP Advisory, joint administrator of Connect Modular Limited and joint provisional liquidator of Hope South West Limited, said, “Connect Modular Limited and Hope South West Limited had built a strong reputation and track record in delivering high quality, affordable modular homes across Scotland. Unfortunately, following losses made on a number of historic contracts and rising operational costs, the businesses were facing significant cash flow pressure.
“Despite the best efforts of the director in exploring alternatives in recent weeks, the cash position deteriorated significantly placing unsustainable pressure on the business. We will now focus on marketing the assets for sale and on providing every possible support to the staff for claims to the Redundancy Payments Office and accessing support agencies such as PACE.”
FRP Advisory is now marketing the assets for sale with interested parties being asked to contact FRP Advisory as soon as possible via email: suzy.quinn@frpadvisory.com.
