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UK staffing firm Kellan Group (KLN:LSE) today reported that annual revenue up to 31 December 2012 fell to £24.2 million from £26.9 million a year ago, a reduction of nearly -11%. Net fee income, or gross profit, dropped -21% to £8.6 million from £10.9 million.
A focus on costs has meant that the operating loss in the year narrowed from £5.4 million in 2011 to £2.1 million in 2012. The company posted a total loss, after tax, of £2.6 million, down from £5.9 million in the prior year.
Tony Reeves, executive Chairman, said that 2012 was a year in which the recruitment market continued to be affected by the slow-moving UK economy. The company focused on streamlining administrative expenses which resulted in a year-on-year saving of -34% from £16.3 million in 2011 to £10.8 million in 2012.
“We have proactively controlled our cost base by consolidating locations and renegotiating with suppliers where appropriate resulting in the Group being streamlined for expansion,” he said.
He added that the firm has restructured business operations. “With the UK recruitment market being very inconsistent with some specialist sectors doing significantly better than others, the Group has proactively taken the opportunity to ensure it is in the strongest position possible. We have implemented a positive restructure into the business to make certain that the businesses within the Group are in the best position to maximise market share as and when the opportunity arises, while maintaining a clear focus on controlling and further reducing our cost base.”
The company also announced that fundraising of £1.5 million, comprising £0.9 million in equity and £0.6 million in unsecured convertible debt is at an advanced stage of discussion with the Company's largest shareholder, Paul Bell, who currently owns almost 42% of the stock. Mr Bell has substantially increased his shareholding in the Group over the course of the past year during which time a number of Directors have left the company.
Kellan Group operates through three recruitment brands; Berkeley Scott, Quantica and RK in a number of disciplines such as finance & accounting, information technology, supply chain & procurement, legal, retail, manufacturing, catering, hospitality and leisure and human resources.
The company’s shares were not traded this morning and the share price remains at £0.83.