UK-based staffing firm Kellan Group PLC (KLN:LSE) reported revenue today for the year ending 31 December 2016 of £21.9 million, a decrease of 11.8% compared with £24.9 million for the same period last year.

Kellan Group also reported that H2 2016 revenue of £11.9 million grew by 19.6% compared with H1 2016 (£10 million); while H2 net fee income of £3.5 million grew by 3.4% compared to H1 2016 (£3.3 million).

“The results for 2016 have been disappointing, although the group has had some success in securing new clients and growing some areas of the business,” Richard Ward, Executive Chairman, said.

Kellan Group also stated that an impairment review undertaken in 2016 resulted in a £2.6 million impairment charge (non-cash) in relation to Quantica Group (2015: 0).

“Overall Group performance to date for 2017 is slightly ahead of Board expectation and I am confident that the changes implemented will lead the Group to achieve substantially better results in 2017,” Ward said.

Temporary Net Fee Income (NFI) declined by 10.0% from £4.1 million in 2015 to £3.7 million in 2016, Meanwhile, permanent NFI declined by 14.1% from £3.6 million in 2015 to £3.1 million in 2016. The company states the decline in both temporary and permanent NFI was primarily due to underperformance from Berkeley Scott London and RK Leeds.

Kellan Group operates through its three recruitment brands, Berkeley Scott, Quantica and RK Group.

Berkeley Scott's temporary recruitment operation was flat year-on-year with NFI at £3.1 million. NFI in the London office declined by 12.9% while all other temporary locations delivered year-on-year growth. Berkeley Scott returned to the Birmingham market in January 2016 and delivered over 35,000 hours of temporary assignments in 2016.

NFI from Berkeley Scott's permanent recruitment operation declined by 19.7% from £1.9 million in 2015 to £1.5 million in 2016, predominantly due to underperformance from London and Leeds, however Manchester delivered growth of 11.7% on 2015.

Berkeley Scott's permanent recruitment operation in London underperformed in 2016, with NFI declining 28.6%, but following a management restructure is currently delivering increased NFI.

The RK Group's Leeds office underperformed in 2016, with NFI declining 25.3% on 2015. However, growth delivered from other offices saw overall NFI remain flat year-on-year at £1.4 million, with NFI from RK Preston increasing by 17.7% on 2015.

The Quantica Group's NFI declined by £0.52 million (38.5%) from £1.36 million in 2015 to £0.84 million in 2016. Kellan Group states that £0.16 million of this decline relates to the closure of the Birmingham branch in Q2 2015, with the remaining decline primarily from the Yorkshire and London branches. Although Quantica Group's NFI reduced year-on-year, Quantica delivered controllable contribution growth of £96,000.

As of last trade Kellan Group PLC traded at £0.56, down 5.83% on the day and 9.71% above its 52-week low of £0.51, set on 18 October 2016. Based on its current share price the company has a market value of £2.04 million.