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UK staffing firm Kellan Group (KLN:LSE) has had another challenging year in 2011, seeing a slide in revenue and gross profit due to a dip seen in the recruitment market, the company reported on Friday.
After making large losses in 2010, the firm said that it is now “out of survival mode”, having secured millions in additional funding as part of its growth strategy.
Most recently in September 2012, the firm raised £2.66 million. The company is planning tuck-in acquisitions once it has achieved “sustained profitability”.
Kellan, which specialises in IT, accountancy, hospitality, leisure and professional services, said today that it had approached 2012 “with a high degree of caution due to the volatile nature of the economic environment.”
Management is now working on gross profit growth, cost control and working capital management.
“Our outlook has changed for the better, however, with the announcement today of a placing to raise £1.40 million from existing investors, which will be available for investment in fee earners and projects to stimulate growth and £1.26 million as a drawdown facility that can be drawn down in line with the scheduled repayments of the existing bank term loan,” said chairman Tony Reeves.
In 2011, full-year revenue dropped by -9.8% to £26.9 million when compared to £29.8 million a year ago.
Gross profit was also down to £10.85 million, seeing a decline of -12.4% with the gross margin falling to 40.3% from 41.5% year-on-year.
The firm made an operating loss of £5.4 million in 2011, compared to a loss of £10.3 million in 2010.
The loss after tax was £5.9 million at year-end while in 2010 the firm saw a loss of £9.7 million.
As of last trading on 29 June, the company’s share price was 3.13 pence, up +13.6% from a year ago and -85% below its 52-week high of 3.25 pence seen in the same month. The firm has a market value of £3.41 million.