Scottish affordable housing specialist Connect Modular has appointed administrators.
FRP Advisory partners Michelle Elliot and Callum Carmichael took control of the Cumnock-based modular housebuilder on 6 January.
They also took control of related company Hope South West Ltd on 7 January, according a statement from to FRP.
The administrators said both companies had ceased trading.
Assets of Connect Modular and Hope South West are now being marketed for sale.
Part of the Wee House group, Connect Modular supplied affordable offsite-built homes to housing associations, local authorities and community trusts across the UK.
FRP said the firm’s problems were due to rising operational costs and losses made on previous contracts.
Its latest published accounts show that the firm had net assets of £276,400 on 30 June 2022 but net liabilities of £20,200 a year later.
The amount Connect Modular owed to creditors within 12 months ballooned in that time from £1.7m to more than £3m. It owed almost £1m to ‘“group undertakings” in the latter period.
Elliot said: “Unfortunately, following losses made on a number of historic contracts and rising operational costs, the businesses were facing significant cashflow 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.”
Connect Modular employed 38 people and Hope South West employed 10 people. FRP said all had been made redundant.
The firm created homes in its Ayrshire manufacturing facility and fitted them with kitchens, bathrooms, plumbing and electrics. These units were then transported to site and craned into position to be made wind and water-tight before final external works were completed.
Connect Modular acted as principal contractor in many cases, managing all aspects of a project from design and planning to manufacture and site works.
The firm is the latest in a long list of modular firms to experience difficulties in recent times.
TopHat last October announced it was going to lay off staff and wind down its modular housing operations.
Modular housing specialist ModPods International appointed administrators last summer after spiralling relocation costs hit its bottom line.
Investor L&G also wound down its offsite business in 2023 after years of heavy losses.
Modular specialist Urban Splash House entered administration in May 2022, blaming operating issues at its factory in Alfreton.
Other specialists including Ilke Homes, Mid Group, Eco Modular Buildings and Caledonian Modular have also failed in recent years.
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Greg Pitcher