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UK – Stronger H2 tempers Kellan Group’s revenue decrease

24 April 2015

UK recruitment firm Kellan Group (KLN: LN) reported revenue for the full year ending 31 December 2014 of £23 million, a decrease of 1.8% compared with £23.4 million in 2013. 

  2014 2013 Change
Revenue £23.0 million £23.4 million -1.8%
Gross Profit £8.0 million £7.7 million +4.3%
Adjusted EBITDA £0.7 million (£0.4 million) N/A

Despite reporting lower full year revenue in 2014, Kellan Group’s results recovered somewhat in the second half of the year; following a revenue decrease of 3.8% in H1 2014 compared with H1 2013. The company achieved revenue growth of 15.2% in H2 2014, with revenue rising to £12.3 million compared with £10.7 million in H2 2013.

It was announced in March 2015 that Tony Reeves, Executive Chairman of Kellan Group would step down with immediate effect. He was succeeded by Richard Ward.

Mr Ward commented: “Kellan Group's performance in 2014 is evidence of the Group taking advantage of an improving market, albeit there is still some way to go. The Group is well positioned to continue to grow in its markets throughout 2015 and beyond.”   

“Having over 25 years' experience as a Board Executive, I feel confident that I can successfully lead the Kellan Group and the overall improved performance of the Group regarding EBIT. The underlying performance of the business is encouraging and I am delighted to join the Group at such a time. I look forward to working with the Board and senior management team to improve the success of each of the stable brands within the business,” he added. 

Kellan Group operates three recruitment brands; Berkeley Scott, Quantica, and RK. Through its brands, the company facilitates the recruitment of professionals into finance & accounting, IT, engineering, contract management, retail, manufacturing, catering, hospitality & leisure, and HR sectors.   

Revenue by recruitment brand during the year was as follows:

  2014 2013 Change
Berkeley Scott £15.8 million £13.9 million +13.2%
Quantica £4.3 million £5.4 million -19.9%
RK £2.0 million £2.8 million -28.1%

The only brand to report revenue growth in 2014 was Berkeley Scott, which benefited from better use of technology and significant investment in new training facilities in London resulting in quicker online registration and training of candidates; which in turn improved operational efficiency. Net fee income rose by 10.9% to £4.9 million during the year. 

The RK Group integrated offices across the RK Accountancy business to focus on core geographic finance and accountancy markets. The brand has also invested in additional headcount in RK Finance in order to increase market share in 2015. Net fee income for the year decreased by 21.8% to £1.1 million. 

Quantica operates as two segments; Technology and Search & Selection. Quantica Technology reported growth of the web development contract market in the UK, particularly within the telecoms sectors. While the permanent recruitment market remains strong, demand for contractors saw a marked uplift during the second half of 2014. Net fee income rose by 34.5% to £1.2 million in 2014 compared with 2013.

Quantica Search & Select reported a decrease of 16.1% in net fee income to £473,000, down from £564,000 a year ago.