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| Share Name | Share Symbol | Market | Type | Share ISIN | Share Description |
|---|---|---|---|---|---|
| Kellan Grp | LSE:KLN | London | Ordinary Share | GB00B03W5P29 | ORD 0.01P |
| Price Change | % Change | Share Price | Bid Price | Offer Price | High Price | Low Price | Open Price | Shares Traded | Last Trade | |
|---|---|---|---|---|---|---|---|---|---|---|
| 0.00 | 0.00% | 0.30 | 0.25 | 0.35 | 0.00 | 01:00:00 |
| Industry Sector | Turnover | Profit | EPS - Basic | PE Ratio | Market Cap |
|---|---|---|---|---|---|
| 0 | 0 | N/A | 0 |
From May 2019 to May 2024
TIDMKLN
RNS Number : 4975R
Kellan Group (The) PLC
22 September 2017
The information contained within this announcement is deemed by the Group to constitute inside information as stipulated under the Market Abuse Regulations (EU) No. 596/2014 ("MAR").
22 September 2017
The Kellan Group PLC
("Kellan", the "Company" or "Group")
Interim results for the six months ended 30 June 2017
The Company announces its unaudited interim results for the six months ended 30 June 2017. Kellan is a market leading recruitment business operating across a wide range of functional disciplines and industry sectors.
The interim results will be available shortly on the Company's website at www.kellangroup.co.uk.
Financial Summary
-- In the six months ended 30 June 2017, the Group's year-on-year sales increased by 3% to GBP10.3 million, compared with GBP10.0 million in H1 2016; while Net Fee Income (NFI) declined by 4% from GBP3.3 million in H1 2016 to GBP3.2 million in H1 2017.
-- Continuous focus on overheads with administrative expenses reduced by 7% to GBP3.1 million over H1 2017, compared with GBP3.3 million during the comparable period in H1 2016.
-- Adjusted EBITDA profit (Note 2) of GBP0.3 million during H1 2017 compared with GBP0.2 million profit during H1 2016.
-- Loss of GBP21,000 during H1 2017, compared with a loss of GBP141,000 during the comparable period last year.
-- Further reduction in loan note position via repayment of the 2022 loan note of GBP523,000 on 15 September 2017 at a discount of GBP157,000, which improves Group gearing and reduces ongoing financing costs.
Operational summary
-- Berkeley Scott continues to be a leader in hospitality and leisure recruitment markets. We have also seen good results from an improved approach to client attraction, leading to the growth of new clients in the SME space.
-- The RK business continued to decline through H1 2017. Following changes to senior management, the business has reduced the decline and is expected to return to growth in Q4 2017. A change in focus in order to create a specialist temporary team will take time to deliver results, but is key to improving the temporary/permanent split.
-- The Quantica business has seen its NFI decline, primarily due to a reduction in headcount. However, as underperformers have left the business, the underlying profitability has improved. A number of large food manufacturers have reduced their recruitment volumes as currency variations and other market challenges have led to more caution, negatively affecting Quantica's permanent business.
ENQUIRIES:
Hot Features
Premium
The Kellan Group PLC Tel: 020 7268
6200
Rakesh Kirpalani, Group
Finance Director
Allenby Capital Limited Tel: 020 3328
5656
David Worlidge / James
Thomas
Executive Chairman's Statement
The results for the first six months of 2017 have been mixed at an operating segment level. Overall, Group sales have increased by 3% from GBP10.0 million in H1 2016 to GBP10.3 million in H1 2017, while administrative expenses have reduced by 7% from GBP3.3 million in H1 2016 to GBP3.1 million in H1 2017. Overall loss for H1 2017 of GBP21,000 compared with a loss of GBP141,000 in H1 2016. Adjusted EBITDA for H1 2017 of GBP321,000 compared with GBP211,000 in H1 2016.
Berkeley Scott's temporary business has seen significant growth in H1 2017 with NFI increasing 18% compared to H1 2016. The Leeds operation underperformed in H1 2017 with NFI down 12% on H1 2016. The Birmingham office, which opened in January 2016, continues to grow and London saw growth of 27% over H1 2016 with a similar headcount.
Berkeley Scott's permanent business was flat year-on-year compared to H1 2016. The Bristol permanent NFI has declined year-on-year, but all other locations have seen good growth. London recovered from last year's disappointing results to deliver growth of 16% in H1 2017 compared to H1 2016, despite a reduced headcount.
The RK business continued to decline as seen in H2 2016, with NFI in H1 2017 down GBP0.3m compared to H1 2016, and down GBP0.2m compared to H2 2016. The senior management was changed in Q1 2017 and the business has now stabilised.
The Quantica business has seen its NFI decline by GBP173,000; of which GBP79,000 relates to the closure of the underperforming London operation in Q1 2017 and GBP32,000 relates to the closure of the underperforming Manchester and Leeds operations in 2016.
On 15 September 2017, the Company announced that it had agreed terms to purchase the outstanding GBP523,000 loan notes which were due for repayment on 20 September 2022, for the purchase price of GBP366,100 (such sum being equal to 70 per cent. of the principal GBP523,000). This was funded by drawdown on the existing confidential invoice discounting facility provided by Barclays. The Barclays drawdown is at a substantially lower rate of 1.6% over base (1.85%) than the interest on the Loan Notes (5%) and ensures the Company uses its cheapest means of funding first.
In summary, before the first refinancing and redemption transaction dated 26 October 2016, the Group had loan notes amounting to GBP3,206,000 outstanding with GBP1,346,000 due for repayment on 14 February 2017 and the remaining GBP1,860,000 due for repayment on 20 September 2017. Following the transactions announced on 26 October 2016, 5 January 2017 and 15 September 2017, the Group has loan notes amounting to GBP1,860,000 outstanding and due for repayment on 20 September 2022.
My sincerest thanks goes to our staff, all of our customers, and to all our loyal shareholders for their continued support.
Richard Ward
Executive Chairman
Consolidated Statement of Comprehensive Income
For the six months ended 30 June 2017
Unaudited Unaudited Audited
6 months 6 months 12 months
ended ended ended
30 June 30 June 31 December
2017 2016 2016
Note GBP000 GBP000 GBP000
Revenue 10,310 9,985 21,932
Cost of sales (7,119) (6,650) (15,149)
-------------------------- ----- ---------- ---------- ------------
Net Fee Income 3,191 3,335 6,783
Administrative expenses (3,080) (3,304) (6,369)
-------------------------- ----- ---------- ---------- ------------
Operating profit before
impairment charge 111 31 414
Impairment of goodwill - - (2,578)
-------------------------- ----- ---------- ---------- ------------
Operating profit/(Loss) 2 111 31 (2,164)
Financial expenses (132) (172) (322)
-------------------------- ----- ---------- ---------- ------------
Loss before tax (21) (141) (2,486)
Tax credit - - -
------------------------- ----- ---------- ---------- ------------
Loss for the period (21) (141) (2,486)
-------------------------- ----- ---------- ---------- ------------
Attributable to:
Equity holders of
the parent (21) (141) (2,486)
-------------------------- ----- ---------- ---------- ------------
Loss per share in
pence
Basic 3 (0.01) (0.04) (0.73)
Diluted 3 (0.01) (0.04) (0.73)
-------------------------- ----- ---------- ---------- ------------
The above results relate to continuing operations.
There are no other items of comprehensive income for the period or for the comparative periods.
Consolidated Statement of Financial Position
as at 30 June 2017
Unaudited Unaudited Audited
30 June 30 June 31 December
2017 2016 2016
Note GBP000 GBP000 GBP000
Non-current assets
Property, plant and
equipment 244 338 290
Intangible assets 6 3,226 6,021 3,335
------------------------------------ ----- ---------- ---------- ------------
3,470 6,359 3,625
------------------------------------ ----- ---------- ---------- ------------
Current
assets
Trade and other receivables 4 3,863 3,288 4,359
Cash and cash equivalents 147 315 1,910
------------------------------------ ----- ---------- ---------- ------------
4,010 3,603 6,269
------------------------------- ---- ----- ---------- ---------- ------------
Total assets 7,480 9,962 9,894
------------------------------- ---- ----- ---------- ---------- ------------
Current liabilities
Loans and borrowings 919 2,118 3,375
Trade and other payables 5 2,978 2,639 2,956
Provisions 16 18 8
------------------------------------ ----- ---------- ---------- ------------
3,913 4,775 6,339
------------------------------ ----- ----- ---------- ---------- ------------
Non-current liabilities
Loans and borrowings 1,921 1,776 1,881
Provisions 68 65 75
1,989 1,841 1,956
------------------------------------ ----- ---------- ---------- ------------
Total liabilities 5,902 6,616 8,295
-------------------------------- --- ----- ---------- ---------- ------------
Net assets 1,578 3,346 1,599
-------------------------------- --- ----- ---------- ---------- ------------
Equity attributable
to equity holders of
the parent
Share capital 4,274 4,274 4,274
Share premium 14,746 14,746 14,746
Capital contribution
reserve 768 - 768
Convertible debt reserve - 170 -
Capital redemption
reserve 2 2 2
Retained earnings (18,212) (15,846) (18,191)
------------------------------------ ----- ---------- ---------- ------------
Total equity 1,578 3,346 1,599
-------------------------------- --- ----- ---------- ---------- ------------
Consolidated Statement of Changes in Equity
for the six months ended 30 June 2017
Unaudited
Unaudited Unaudited Unaudited Capital Unaudited Unaudited Unaudited
Share Share Convertible Convertible Redemption Retained Total
capital premium reserve Reserve reserve earnings equity
GBP000 GBP000 GBP000 GBP000 GBP000 GBP000 GBP000
Balance at 31
December 2015 4,274 14,746 170 - 2 (15,705) 3,487
---------------------- ---------- ---------- ------------ ------------ ----------- ---------- ----------
Total comprehensive
profit for the
6 month period
ended 30 June
2016 - - - - - (141) (141)
Balance at 30
June
2016 4,274 14,746 170 - 2 (15,846) 3,346
---------------------- ---------- ---------- ------------ ------------ ----------- ---------- ----------
Total comprehensive
profit for the
6 month period
ended 31 December
2016 - - - - - (2,345) (2,345)
Capital contribution - - - 768 - - 768
Equity component
of convertible
loan notes - - (170) - - - (170)
Balance at 31
December
2016 4,274 14,746 - 768 2 (18,191) 1,599
---------------------- ---------- ---------- ------------ ------------ ----------- ---------- ----------
Total comprehensive
loss for the
6 month period
ended 30 June
2017 - - - - - (21) (21)
Balance at 30
June
2017 4,274 14,746 - 768 2 (18,212) 1,578
---------------------- ---------- ---------- ------------ ------------ ----------- ---------- ----------
Consolidated Statement of Cash Flows
for the six months ended 30 June 2017
Unaudited Unaudited Audited
6 months 6 months 12 months
ended ended ended
30
June 30 June 31 December
2017 2016 2016
GBP000 GBP000 GBP000
Cash flows from operating
activities
Loss for the period (21) (141) (2,486)
Adjustments for:
Depreciation and amortisation 170 157 335
Impairment of goodwill - - 2,578
Interest paid 132 162 305
Amortisation of loan cost - 10 17
281 188 749
Decrease in trade and other
receivables 496 1,127 56
Increase/(Decrease) in
trade and other payables 22 (417) (101)
Increase/(Decrease) in
provisions 1 (26) (26)
------------------------------------ ---------- ------------------ -------------------
Net cash inflow from
operating activities 800 872 678
------------------------------------ ---------- ------------------ -------------------
Cash flows from investing
activities
Acquisition of property,
plant and equipment (15) (5) (28)
------------------------------------ ---------- ------------------ -------------------
Net cash outflow from
investing activities (15) (5) (28)
------------------------------------ ---------- ------------------ -------------------
Cash flows from financing
activities
(Decrease)/Increase of
invoice discounting facility
balances (2,156) (2,122) 188
Interest paid and loan
costs (92) (138) (270)
New loan receipt - - 366
Repayment of loan borrowings (300) - (732)
------------------------------------ ---------- ------------------ -------------------
Net cash inflow/(outflow)
from financing activities (2,548) (2,260) (448)
------------------------------------- ---------- ------------------ -------------------
Net (decrease) / increase
in cash and cash equivalents (1,763) (1,393) 202
Cash and cash equivalents
at the beginning of the
period 1,910 1,708 1,708
------------------------------------ ---------- ------------------ -------------------
Cash and cash equivalents
at the end of the period 147 315 1,910
-------------------------------------- ---------- ------------------ -------------------
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 2017. The comparative half year interim results are for the six months ended 30 June 2016. The comparative year's results are for the twelve months ended 31 December 2016.
The interim financial statements do not include all disclosures that would otherwise be required in a complete set of financial statements and should be read in conjunction with the 2016 annual report.
Adoption of new and revised standards
New standards, interpretations and amendments, effective from 1 January 2017, have not had a material effect on the financial statements.
The amendments and interpretations to published standards that have an effective date on or after 1 July 2017 or later periods have not been adopted early by the Group and assessment of the impact of these standards is currently under review.
Effective
International Accounting Standards (IAS/IFRS) date
IFRS 9 Financial Instruments 01/01/2018
Revenue from Contracts with
IFRS 15 Customers 01/01/2018
------------ ---------------------------------- -----------
IFRS 16* Leases 01/01/2019
------------ ---------------------------------- -----------
* These standards and interpretations are not endorsed by the EU at present.
Financial information
The financial information for the six months ended 30 June 2017 and the six months ended 30 June 2016 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 2016 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.
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 2016 which are also the policies that are expected to be applicable at 31 December 2017.
Based on the Group's latest trading expectations and associated cash flow forecasts, the directors have considered the cash requirements of the Company and have concluded that the Group will be able to operate within its existing facilities for the next twelve months. These facilities comprise an invoice discounting facility of up to GBP4 million dependent on trading levels. The Directors also recognise that there is a general sensitivity to the wider macro-economic environment, however, based on the ongoing support from major shareholders 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.
2 Reconciliation of operating loss to adjusted EBITA and adjusted EBITDA
Adjusted EBITDA is earnings before interest, taxes, depreciation and amortisation adjusted for any one off or non-cash administrative expenses.
Unaudited Unaudited Audited
6 month 6 month 12 month
period period period
ended ended ended
30 June 30 June 31 December
2016 2015 2016
GBP000 GBP000 GBP000
Operating profit as per accounts 111 31 (2,164)
Add back
Amortisation of intangible
assets 108 108 216
Impairment of goodwill - - 2,578
Restructuring costs 40 23 23
---------------------------------- ---------- ---------- ------------
Adjusted EBITA 259 162 653
Depreciation 62 49 119
---------------------------------- ---------- ---------- ------------
Adjusted EBITDA 321 211 772
---------------------------------- ---------- ---------- ------------
3 Loss per share
Basic loss per share
The calculation of basic loss per share is as follows:
Unaudited Unaudited Audited
6 month 6 month 12 month
period period period
ended ended ended
30 June 30 June 31 December
2017 2016 2016
Weighted average number
of shares
----------------------------- ------------ ------------ ------------
Issued ordinary shares
at beginning of period 339,645,061 339,645,061 337,645,061
Effect of shares issued - - -
Weighted average number
of shares at end of period 339,645,061 339,645,061 337,645,061
Loss for the period (21,000) (141,000) (2,486,000)
----------------------------- ------------ ------------ ------------
Basic loss per share
in pence (0.01) (0.04) (0.73)
----------------------------- ------------ ------------ ------------
Diluted loss per share
in pence (0.01) (0.04) (0.73)
----------------------------- ------------ ------------ ------------
There was no dilution in the current period due to the loss in the period.
The effect of the conversion of the loan notes and the outstanding Employee options has been determined as non-dilutive. As such they have been excluded from the diluted earnings per share calculation.
4 Trade and other receivables
Unaudited Unaudited Audited
30 June 30 June 31 December
2017 2016 2016
GBP000 GBP000 GBP000
-------------------------------- ---------- ---------- ------------
Trade receivables 3,385 2,923 3,766
Other receivables 215 23 250
Prepayments and accrued income 263 342 343
-------------------------------- ---------- ---------- ------------
3,863 3,288 4,359
-------------------------------- ---------- ---------- ------------
5 Trade and other payables
Unaudited Unaudited Audited
30 June 30 June 31 December
2017 2016 2016
GBP000 GBP000 GBP000
------------------------------ ---------- ---------- ------------
Trade payables 71 113 53
Social security and other
taxes 1,030 755 1,175
Other creditors 505 604 631
Accruals and deferred income 1,372 1,167 1,097
------------------------------ ---------- ---------- ------------
2,978 2,639 2,956
------------------------------ ---------- ---------- ------------
6 Intangible Assets
The intangible assets balance at 30 June 2017 of GBP3,226,000 includes an amount of GBP3,172,000 relating to goodwill acquired through business combinations. The carrying value of goodwill was reviewed for impairment as at 31 December 2016 and will continue to be reassessed on an annual basis.
7 Post balance sheet events
On 15 September 2017, the Company announced that it had agreed terms to purchase the outstanding GBP523,000 loan notes which were due for repayment on 20 September 2022, for the purchase price of GBP366,100 (such sum being equal to 70 per cent. of the principal GBP523,000). This was funded by drawdown on the existing confidential invoice discounting facility provided by Barclays. The Barclays drawdown is at a substantially lower rate of 1.6% over base (1.85%), than the interest on the Loan Notes (5%) and ensures the Company uses its cheapest means of funding first.
In summary, before the first refinancing and redemption transaction dated 26 October 2016, the Group had loan notes amounting to GBP3,206,000 outstanding with GBP1,346,000 due for repayment on 14 February 2017 and the remaining GBP1,860,000 due for repayment on 20 September 2017. Following the transactions announced on 26 October 2016, 5 January 2017 and 15 September 2017, the Group has loan notes amounting to GBP1,860,000 outstanding and due for repayment on 20 September 2022.
8 Availability of Interim Results
The half year results for the six months to 30 June 2017 will not be posted to shareholders but will be available on the Company's website, www.kellangroup.co.uk.
This information is provided by RNS
The company news service from the London Stock Exchange
END
IR SEMFMFFWSELU
(END) Dow Jones Newswires
September 22, 2017 02:00 ET (06:00 GMT)
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