Kellan Group swings to first-half loss

Recruitment business Kellan Group swung to a loss in the first half as sales fell, with many clients taking longer to make decisions due to uncertainty surrounding the EU referendum.

In the six months to the end of June, the company swung to a loss of £0.1m from a profit of £0.2m in the same period a year ago, as sales declined 13% to £10m.

Meanwhile, net fee income dropped 10% to £3.3m.

Executive chairman Richard Ward said the results for the first half were “disappointing”, but the group has had success in securing new clients and growing some areas of the business.

The company said its Berkeley Scott temporary business was flat year-on-year with the new Living Wage impacting the first-half performance.

It said the tourism, hospitality and leisure sector has one of the highest proportions of jobs paying the minimum wage of any sector in the UK.

Berkeley Scott saw several major clients re-evaluate their staffing levels, pay structures and usage of temporary workers to negate the impact of the minimum wage on their business, Kellan said.

Ward said: “Uncertainty surrounding the EU referendum has been a distraction in H1 of 2016 with many clients taking longer to make decisions. We have also seen some general slowness post referendum in job flow and candidate attraction.”

At 0850 BST, Kellan shares were down 20% to 1p.