Persimmon writes off £25m investment in modular builder

Persimmon has written off its £25m investment in Derby-based TopHat due to “risks in the modular building sector.”

Despite this, Persimmon has said they will keep working with TopHat to boost output at its Brickworks, Tileworks, and Space4 factories.

Derbyshire modular builder TopHat has already laid 70 staff off this year in an effort to cut costs and shelved plans for a 650,000 sq ft advanced manufacturing facility in Corby, which was set to create 1,000 jobs.

Goldman Sachs-backed TopHat said it had been hit by the volatility of the modular housing market, which has recently seen the demise of other builders such as Ilke Homes and Legal & General Modular Homes.

The move came just months after TopHat secured a £15m loan from Homes England, £45m last year from Persimmon and Aviva, and Goldman Sachs completed a total fundraising round of £70m.

Persimmon remains interested in TopHat’s facade product and recently tested its efficiency at the Space4 factory.

Persimmon’s half-year results showed pre-tax profits down slightly for the six months to June, 3% lower than last year at £146m, despite an 11% increase in revenues to £1.32bn.

CEO Dean Finch noted that better market conditions and government reforms support the company’s growth plans.

They will open more sites this year and next, benefiting from recent land investments and aiming to meet housing needs with strong returns.