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UK – Kellan Group has disappointing half year

30 August 2013

UK recruitment firm Kellan Group (KLN: LSE) reported half year revenue of £11.1 million for the six months ending 30 June 2013, down -5.2% from £11.7 million a year ago. An operating loss of £1.2 million was reported during H1, compared with £652,000 for the same period last year. 

Tony Reeves, executive chairman of Kellan Group, commented: “The first half of 2013 was a period in which the recruitment market continued to be affected by the sluggish UK economy. The diverse nature of the brands within the Kellan Group allows us to continue to focus our efforts on increasing market share in the sectors demonstrating growth opportunities.”

“Focus on strong cost control has continued with H1 2013 costs (excluding non-cash impairment of intangibles) reducing by -2.7% compared to last year and -2.3% compared to H2 2012. With the Group's recently realigned management and leadership and our continuing success in reducing our cost base, I believe we have created a robust operational infrastructure to provide support across our business enabling the Group to move forward. We have had some encouraging indications of growth in H1 2013 with Q2 2013 productivity per fee earner increasing by +13% compared to Q1 2013,” he added.

Kellan Group’s Quantica Search and Selection recruitment brand secured a number of significant client preferred supplier account wins with leading businesses.  Investment in this developing area has resulted in the expansion of the team with some experienced new hires.

The Berkeley Scott recruitment brand continues to gain market share in the North of England with year on year revenue growth.  The establishment of a key sector focus has resulted in significant client wins within the hospitality branded and SME market place, as well as the contract and facilities markets. A number of framework agreements and business wins were achieved in the core London temporary worker business. The London Hospitality and Leisure and Chefs business in general is achieving significant growth and remains a key focus for permanent staff development.   

RK Accountancy has increased temporary revenue in H1 2013 over H1 2012, with improved performances in in Yorkshire and Preston.

The company claims that Quantica Technology is well positioned to grow in the second half of 2013 with increased fees coupled with increasing international contractors. Quantica Technology has continued to build its presence in London and regionally across the UK, with increased revenue streams from mainland Europe, in particular from Germany and Switzerland.

At the beginning of 2013, the company’s Chief Executive left the company and, during the past financial quarter, Kellan Group was at the centre of counter proposal bid from shareholders seeking to secure controlling interest in the company. Following consultation, Kellan Group accepted a bid from its largest shareholder

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