TIDMKLN
RNS Number : 0562Y
Kellan Group (The) PLC
04 September 2015
AIM: KLN
4 September 2015
The Kellan Group PLC
(Kellan, the "Company" or "Group")
Half yearly results for the six months ended 30 June 2015
The Company is pleased to announce its half yearly results for
the six months ended 30 June 2015. Kellan is a market leading
recruitment business operating across a wide range of functional
disciplines and industry sectors. The Company joined the AIM market
in December 2004.
Financial Summary
-- In the six months ended 30 June 2015, the Group achieved year
on year sales growth of 8% with GBP11.5 million, compared with
GBP10.7 million in H1 2014; while Net Fee Income (NFI) declined
from GBP3.9 million in H1 2014 to GBP3.7 million in H1 2015.
-- Operating profit for H1 2015 of GBP0.3 million, compared with
GBP0.1 million in H1 2014 and GBP0.16 million in H2 2014.
-- Continuous focus on overheads with administrative expenses
reduced by 13% to GBP3.4 million over H1 2015, compared with GBP3.8
million during the comparable period in H1 2014 and GBP3.9 million
in H2 2014.
-- Profit of GBP0.2 million during H1 2015, compared with a loss
of GBP0.1 million during the comparable period last year.
-- Adjusted EBITDA profit of GBP0.4 million during H1 2015
compared with GBP0.3 million during H1 2014.
-- Basic earnings per share of 0.06p compared with loss per share of (0.02p) in H1 2014.
Operational summary
-- Berkeley Scott continues to be the leader in hospitality and
leisure recruitment markets. Temporary recruitment grew
year-on-year across all locations.
-- The RK business saw the benefits of consolidation and
restructuring carried out in 2014. Continued success with SME's
coupled with penetration in large PLC businesses.
-- Significant new client wins in Quantica including Easyjet, Zurich and Haven Power.
-- Continuous investment in IT systems with new fleet of front
end hardware installed for every member of staff. A back-end
infrastructure project is ongoing to further strengthen the
existing robust environment.
-- Upgraded CRM system to improve efficiency due to go live in Q4 2015.
-- Strategic closure of loss making Midlands operation to focus
investment in better performing areas.
ENQUIRIES:
The Kellan Group PLC
Rakesh Kirpalani, Group Finance Tel: 020 7268
Director 6200
Sanlam Securities UK Limited
David Worlidge / James Thomas Tel: 020 7628
2200
Executive Chairman's Statement
I am pleased to announce that the Group has continued on its
upward trajectory over the past six months. Group sales have
increased by 8% from GBP10.7 million in H1 2014 to GBP11.5 million
in H1 2015, while administrative expenses have reduced by 13% from
GBP3.8 million in H1 2014 to GBP3.4 million in H1 2015. Overall
profit for H1 2015 of GBP187,000 compared with a loss of
(GBP74,000) in H1 2014 and Adjusted EBITDA for H1 2015 of
GBP382,000 compared with GBP344,000 in H1 2014.
During the year, the Group carried out a review of the
outstanding options. After considering the number of options that
are expected to vest, a favourable share based payment adjustment
of GBP150,000 has been included in administrative expenses in the
H1 2015 accounts.
The business has had many client wins and is well positioned to
deliver improved results in H2 2015. The Board has continued to
invest in its IT infrastructure to ensure the Group's fee earners
are properly equipped to take advantage of the improving
recruitment climate. All staff have received new front-end hardware
with an upgraded CRM system due to go live in Q4 2015.
Berkeley Scott continues to be the leader in hospitality and
leisure markets. Temporary recruitment services saw year-on-year
growth over H1 2015 across all locations with the business taking
advantage of a number of PSL wins and continuous focus on the
candidate short chef market. The branded restaurant market was
strong in permanent recruitment, with a number of key clients
requiring assistance with new openings.
The RK business has seen continued success within SME businesses
on permanent and contract teams across all locations. This has been
coupled with pockets of breakthrough success within large PLC and
shared service environments such as Sodexo, DWP, Co-Op, Provident
and Virgin Media.
Quantica has developed its market offering to focus in the IT
and increasingly the Telecoms space in order to increase
professional contractor numbers.
My sincerest thanks goes to our loyal staff for their
uncompromising efforts, all of our customers, and to our
shareholders for their continued support.
Richard Ward
Executive Chairman
Consolidated Statement of Comprehensive Income
For the six months ended 30 June 2015
Unaudited Unaudited Audited
6 months 6 months 12 months
ended ended ended
30 June 30 June 31 December
2015 2014 2014
Note GBP000 GBP000 GBP000
Revenue 11,492 10,669 22,963
Cost of sales (7,788) (6,723) (14,969)
-------------------------- ----- ---------- ---------- ------------
Net Fee Income 3,704 3,946 7,994
Administrative expenses (3,363) (3,847) (7,735)
-------------------------- ----- ---------- ---------- ------------
Operating profit 2 341 99 259
Financial income 2 3 5
Financial expenses (156) (176) (319)
-------------------------- ----- ---------- ---------- ------------
Profit/(Loss) before
tax 187 (74) (55)
Tax credit - - -
------------------------- ----- ---------- ---------- ------------
Profit/(Loss) for
the period 187 (74) (55)
-------------------------- ----- ---------- ---------- ------------
Attributable to:
Equity holders of
the parent 187 (74) (55)
-------------------------- ----- ---------- ---------- ------------
Basic profit/(loss)
per share in pence 3 0.06 (0.02) (0.02)
-------------------------- ----- ---------- ---------- ------------
Diluted profit/(loss)
per share in pence 3 0.06 (0.02) (0.02)
-------------------------- ----- ---------- ---------- ------------
The above results relate to continuing operations.
There are no adjustments between the profit for the period and
the total comprehensive expense for the period or the comparative
periods.
Consolidated Statement of Financial Position
as at 30 June 2015
Unaudited Unaudited Audited
30 June 30 June 31 December
2015 2014 2014
Note GBP000 GBP000 GBP000
Non-current assets
Property, plant and
equipment 307 324 332
Intangible assets 6 6,237 6,440 6,345
------------------------------------ ----- ---------- ---------- ------------
6,544 6,764 6,677
------------------------------------ ----- ---------- ---------- ------------
Current
assets
Trade and other receivables 4 3,733 3,318 3,855
Cash and cash equivalents 219 190 1,192
------------------------------------ ----- ---------- ---------- ------------
3,952 3,508 5,047
------------------------------- ---- ----- ---------- ---------- ------------
Total assets 10,496 10,272 11,724
------------------------------- ---- ----- ---------- ---------- ------------
Current liabilities
Loans and borrowings 845 1,043 3,753
Trade and other payables 5 3,289 2,929 2,949
Provisions 128 161 154
------------------------------------ ----- ---------- ---------- ------------
4,262 4,133 6,856
------------------------------ ----- ----- ---------- ---------- ------------
Non-current liabilities
Loans and borrowings 2,993 2,978 1,660
Provisions 2 2 2
2,995 2,980 1,662
------------------------------------ ----- ---------- ---------- ------------
Total liabilities 7,257 7,113 8,518
-------------------------------- --- ----- ---------- ---------- ------------
Net assets 3,239 3,159 3,206
-------------------------------- --- ----- ---------- ---------- ------------
Equity attributable
to equity holders of
the parent
Share capital 4,274 4,273 4,274
Share premium 14,746 14,680 14,711
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Warrant reserve - 36 36
Convertible debt reserve 170 168 164
Capital redemption
reserve 2 2 2
Retained earnings (15,953) (16,000) (15,981)
------------------------------------ ----- ---------- ---------- ------------
Total equity 3,239 3,159 3,206
-------------------------------- --- ----- ---------- ---------- ------------
Consolidated Statement of changes in equity
for the six months ended 30 June 2015
Unaudited Unaudited Unaudited Unaudited Unaudited Unaudited Unaudited
Share Share Warrant Convertible Redemption Retained Total
capital premium reserve reserve reserve earnings equity
GBP000 GBP000 GBP000 GBP000 GBP000 GBP000 GBP000
Balance at
31 December
2013 4,273 14,647 36 172 2 (16,004) 3,126
--------------------- ---------- ---------- ---------- ------------ ----------- ---------- ----------
Total comprehensive
loss for
the 6 month
period ended
30 June 2014 - - - - - (74) (74)
Issue of
shares - 33 - - - - 33
Share based
payment - - - - - 78 78
Equity component
of convertible
loan notes - - - (4) - - (4)
Balance at
30 June 2014 4,273 14,680 36 168 2 (16,000) 3,159
--------------------- ---------- ---------- ---------- ------------ ----------- ---------- ----------
Total comprehensive
profit for
the 6 month
period ended
31 December
2014 - - - - - 19 19
Issue of
shares 1 31 - - - - 32
Share-based
payment - - - - - - -
Equity component
of convertible
loan notes - - - (4) - - (4)
Balance at
31 December
2014 4,274 14,711 36 164 2 (15,981) 3,206
--------------------- ---------- ---------- ---------- ------------ ----------- ---------- ----------
Total comprehensive
profit for
the 6 month
period ended
30 June 2015 - - - - - 187 188
Issue of
shares - 35 - - - - 35
Share based
payment adjustment - - - - - (150) (150)
Equity component
of convertible
loan notes - - (36) 6 - (9) (39)
--------------------- ---------- ---------- ---------- ------------ ----------- ---------- ----------
Balance at
30 June 2015 4,274 14,746 - 170 2 (15,953) 3,239
--------------------- ---------- ---------- ---------- ------------ ----------- ---------- ----------
In February 2015, the warrants in relation to the 2010
convertible loan notes lapsed.
Consolidated Statement of Cash Flows
for the six months ended 30 June 2015
Unaudited Unaudited Audited
6 months 6 months 12 months
ended ended ended
30 June 30 June 31 December
2015 2014 2014
GBP000 GBP000 GBP000
Cash flows from operating
activities
Profit/(loss) for the
period 187 (74) (55)
Adjustments for:
Depreciation and amortisation 171 167 339
Interest income (2) (3) -
Interest paid 129 126 235
Amortisation of loan
cost 19 21 27
Equity settled convertible
loan interest 7 29 57
Equity settled share-based
payment/(adjustment) (150) 78 78
361 344 681
Decrease in trade and
other receivables 122 614 77
Increase in trade and
other payables 333 180 189
Decrease in provisions (26) (29) (37)
-------------------------------------- ---------- ---------- --------------------
Net cash inflow from
operating activities 790 1,109 910
-------------------------------------- ---------- ---------- --------------------
Cash flows from investing
activities
Interest received 2 3 -
Acquisition of property,
plant and equipment (37) (147) (231)
-------------------------------------- ---------- ---------- --------------------
Net cash outflow from
investing activities (35) (144) (231)
-------------------------------------- ---------- ---------- --------------------
Cash flows from financing
activities
Repayment of invoice
discounting balance (1,584) (1,467) (81)
Interest paid and loan
costs (129) (126) (224)
Net proceeds of convertible
loan notes (15) - -
Net cash outflow from financing
activities (1,728) (1,593) (305)
--------------------------------------- ---------- ---------- --------------------
Net (decrease) / increase
in cash and cash equivalents (973) (628) 374
Cash and cash equivalents
at the beginning of the
period 1,192 818 818
-------------------------------------- ---------- ---------- --------------------
Cash and cash equivalents
at the end of the period 219 190 1,192
-------------------------------------- ---------- ---------- --------------------
Notes
(forming part of the financial statements)
1 Accounting policies
Accounting periods
The accounting reference date of the Group is 31 December. The
current half year interim results are for the six months ended 30
June 2015. The comparative half year interim results are for the
six months ended 30 June 2014. The comparative year's results are
for the twelve months ended 31 December 2014.
Financial information
The financial information for the six months ended 30 June 2015
and the six months ended 30 June 2014 are unaudited and un-reviewed
and do not constitute the Group's statutory financial statements
for those periods. The comparative financial information for the
full year ended 31 December 2014 has, however, been derived from
the audited statutory financial statements for that period. A copy
of those statutory accounts for that period has been delivered to
the Registrar of Companies. The auditor's report on those accounts
was not qualified and did not contain statements under Chapter 3 of
Part 16 of the Companies Act 2006. The Directors recognise that
there is a general sensitivity to the wider macro-economic
environment, however, based on the ongoing support from major
shareholders, current market outlook and management's trading
expectations; the Directors are confident that the Group will be
able to meet its liabilities as they fall due for the foreseeable
future. It is on this basis that the Directors consider it
appropriate to prepare the Group's financial statements on a going
concern basis.
Basis of preparation
The half year interim financial statements have been prepared on
a going concern basis using the recognition and measurement
principles of IFRS as endorsed for use in the European Union. The
accounting policies used in the preparation of these condensed
financial statements are set out in the statutory financial
statements for the period ended 31 December 2014 which are also the
policies that are expected to be applicable at 31 December
2015.
Based on the Group's post year end trading expectations and
associated cash flow forecasts as at 31 December 2014, the
directors have considered the cash requirements of the Company and
have concluded the Group is able to operate within its existing
facilities for the next twelve months.
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