Connect Modular and Hope South West, both strands of The Wee House Company, based in Cumnock, have suffered financial challenges in recent times, resulting in the appointment of administrators.

Connect Modular was recognised just months ago for its affordable housing work in Kilmarnock with a double win at the CIH Scotland Housing Awards 2024.

According to administrators FRP Advisory, all 38 Connect Modular employees are being made redundant. Related company Hope South West Limited has also entered provisional liquidation with 10 staff members being made redundant.

A statement from FRP said: “Michelle Elliot and Callum Carmichael, partners with specialist business advisory firm FRP Advisory, have been appointed as joint administrators of Connect Modular Limited on January 6. They have also been appointed as joint provisional liquidators to related company, Hope South West Limited, on January 7.

“The companies were both part of The Wee House Group, a leading provider of high quality, sustainable, affordable, modular homes to housing associations, local authorities and community trusts across the UK.

“The companies have suffered significant financial challenges in recent months 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 now ceased trading and unfortunately, all 48 employees have been made redundant (38 in respect of Connect Modular Limited and 10 in respect of Hope South West Limited). FRP is supporting them with applications for compensation to the Redundancy Payments Service.”

Recent projects included work on more than 100 homes in Kilmarnock, supported accommodation in West Lothian and flats in Penicuik.

Connect Modular has also built homes for North Ayrshire Council and Cunninghame Housing Association.

New projects in the pipeline include 33 proposed affordable homes in Cowlairs for West of Scotland Housing Association and eight affordable homes in Rothesay on behalf of Fyne Homes.

Connect Modular was also named as a contractor on Hub South East’s Tier 1B Supply Chain.

Michelle Elliot, partner at FRP, 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.”

A West Lothian Council spokesperson said: “The council has been made aware of the situation regarding Connect Modular.

“The council is not in a direct contract with Connect Modular. Hub South East, a key delivery partner for the council, appointed Connect Modular for the construction phase of the project.

“The council remains committed to the delivery of new affordable housing in West Lothian and we are working closely with our delivery partner Hub South East to seek clarity on the developing situation and a way forward for the project.”

The joint administrators/joint provisional liquidators are 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.

It is not clear at this stage how the wider Wee House Company will be affected by the move.