IT, accountancy, hospitality, leisure and professional services recruiter the Kellan Group has raised £1.35m in a move to fund expansion plans.

The group has issued 16.98m new shares together with loan notes that are repayable in 2015.

The group says trading improved in H2 2010 after reporting a loss at EBITA level of £419,000 during H1 2010.

Kellan adds it expects to break-even at the EBITA level for the second half of 2010 and also anticipates a modest increase in annual revenues of approximately £29.9m (2009: £29.2m).

Tony Reeves and John Bowmer, non-executive co-chairmen of Kellan, says: “We are delighted that the directors and existing shareholders have shown their ongoing support for the business. 

“We are also pleased to see an improved trading performance in the second half of the year, with increased revenue for 2010 compared with the previous year.  

“This capital funding through the Subscription and the issue of the Loan Notes will resolve the group’s previous liquidity issues and allow it to focus on organic growth, ensuring that the group is well positioned to enter 2011 in a position of relative strength.”