Work Group plc (LSE - AIM: "WORK"), a London-based recruitment firm, has reported revenue for the year ending 31 December 2015 of £7.1 million, a 6.5% decrease from £7.6 million in 2014.

"Following the sale of the Groups' businesses to Capita in December 2015, management has been working to manage the remaining assets and liabilities to maximise cash,” Simon Howard, Executive Chairman, said.

In December 2015, Capita Resourcing, a UK-based provider of business process outsourcing solutions and professional services, announced that it had planned to acquire the consultancy and resourcing operations of Work Group plc, in a trade and assets deal valuing the company at £2 million.

“The sale of the company's trading operations to Capita plc in December 2015 was the culmination of an extremely difficult year. The trends witnessed during 2014 continued through 2015 - thus we experienced increasingly challenging trading in the UK which was in part offset by progress overseas, especially in the United States. We were fortunate to be able to support the overseas growth by utilising our deep well of experience in London,” Howard said.

“What became clear on a strategic level was that significant changes were occurring for most suppliers of purely people-based advisory services in the UK. This meant that we were working in marketplaces where clients were doing more for themselves and pulling activities in-house; and consequently, the external business that was available was increasingly on a project basis. At the same time, external budgets were being cut and the effect of prolonged and ever more complex procurement procedures meant that working capital was under pressure as never before.

“These changes particularly affected us as an SME without its own IP and with fewer continuing contracts delivering 'annuity income' than had previously been the case. Hence in both the employee engagement and the recruitment process outsourcing markets, we witnessed an accelerating trend of employers either taking more recruitment activities in-house or outsourcing their resourcing on a global basis to major global suppliers,” Howard said.

“Therefore, it became clear to the Board that the trading activities of the Group could only survive as part of a much larger organization.

“Since the year end we have been winding down the remains of the UK business, relocating in London to small short term serviced offices and ensuring the business passed to Capita plc as contracted,” Howard said.

“After a protracted negotiation, we have managed to finalise the consideration details which resulted in Capita retaining the amount of £500,000 held, subject to an audit of closing working capital, from the £2 million purchase price. This adjustment was as expected. Very careful cash flow management prior to completion saw significant cash withdrawn from our overseas subsidiaries which thereby reduced their normalised working capital,” Howard said.

“We are currently evaluating possible reverse takeover acquisition targets and will report further on this as soon as we are able. The Directors aim to conclude a transaction as early in the second half of 2016 as is feasible notwithstanding the need to conduct extensive and appropriate due diligence,” Howard said.

Work Group PLC has discontinued its operations and is no longer trading.