Modular specialists set to cash in on credit crunch

Modular construction specialists could be among the few companies to benefit from the credit crunch as housebuilders and housing associations re-examine their cost base.

The bullish predictions came as offsite construction company Spaceover revealed it has signed up a total of 12 housebuilders to use its modular system under licence.

Spaceover joint managing director Steven Barrett told CJ: "We are now moving to a position where we will be offering developers and their contractors the ability to take Spaceover modules on an ex-works basis so they can put their own foundations in, then clad and roof them.

"I think cost and complying with the Code for Sustainable Homes are the primary driver for housebuilders' interest."

The names of the housebuilders, which are understood to be both regional and national players, as well as one US firm and one in Scandinavia, will be announced in June.

Other modular specialists are also confident, despite the demise of rival Framework CDM (see box).

Britspace sales and marketing director Terry Jupp said its residential operation was "surprisingly buoyant considering what is happening in the financial markets".

He said Britspace's turnover in its residential operation was expected leap from £3m this year to around £12m next year, although he admitted that the private sector was starting to dampen a little.

He said: "If you look at cities like Leeds, they are awash with apartments so several projects in Leeds have stalled temporarily until the developers are more confident that the markets are going to pick up again. But demand among social landlords is as strong as ever. And we've got to find new ways to satisfy that demand."

The trail goes cold for Framework CDM

Framework CDM, the specialist contractor that helped to build the £22m Halley Ice Station, has been sold after going into administration.

The £10m Chesterfield company, which employs 48 people, manufactures factory-produced wall, roof and floor semi-volumetric cassettes. The bulk of its work was on schools projects.

Administrator BDO Stoy Hayward said that the buyer, Blakedew 724 Ltd, is expected to take on the majority of Framework CDM's contracts, while all staff are also expected to be transferred across to the new company. It will now be known as Framework Building Systems.

Framework CDM slipped into administration at the start of the month after suspected cashflow problems.

The company's annual accounts for the year to 31 March 2007 revealed it had made a wafer-thin pre-tax profit of £13,500. Meanwhile, amounts falling due to creditors in the same year were £3.4m.