FINANCIALS: Kellan NFI falls in phase two of growth strategy
Recruitment group Kellan Group saw drops of 10% and 12% respectively in revenue and net fee income (NFI) in the year 2011, as the company went through the second phase of its growth strategy.
Speaking to Recruiter, chief executive Ross Eades (left) says that phase one of the growth plan “was to stop the bleeding, see where we can cut back but obviously make sure we didn’t cut too deeply into the fabric of the business”.
The ongoing phase two of consolidation came after a strong 2010, in which market conditions improved, but during 2011 “it became apparent that further changes were necessary within some of the brands and our strategy was revised accordingly to accommodate this”.
Phase three means “bringing in businesses or teams, increasing headcount of fee earners”, and Eades tells Recruiter, “two and three can run alongside each other, so we’re still in phase two, but don’t be surprised if we make acquisitions if something comes on our radar.”
Revenue for 2011 was £26.9m, and NFI £10.9m. The company’s loss before tax dropped by around half, from £10.7m to £5.9. However, an adjusted EBITDA (earnings before interest, tax, depreciation and amortisation) figure rose from £106k to £166k.
The only company within the business to register a rise in either revenue or NFI was Berkeley Scott, whose revenue rose from £11.7m to £12.7m, but NFI dropped slightly.
Kellan Group chair Tony Reeves says: “We initially approached 2012 with a high degree of caution due to the volatile nature of the economic environment, with the management team maintaining its focus on NFI growth, cost control and working capital management.”
The company today announced it would look to raise £1.4m from existing investors to invest in “fee earners and projects to projects to stimulate growth”, Reeves adds.
As Eades concluded, “the last three years have been very much trying to survive, like lots of companies”, but now the business turnaround has begun and he notes an “optimism” he has not before felt since coming on board with the business in 2009.
