Recruitment company Kellan Group announced on Friday that it swung to a profit for 2017 despite revenue remaining broadly unchanged since the previous year.
The AIM-traded company recorded a pre-tax profit of £457,000 compared to a loss of £2.5m the year before, while revenue rose very slightly, by 0.5% to £22m compared to £21.9m in 2016.

The company benefited from an absence of goodwill impairment charges throughout the year, compared to the £2.2m paid in relation to Quantica Group in the previous year, and a reduction in administration costs from £6.4m to £5.9m.

Kellan's year-on-year financial expenses also saw a decrease, falling 27% to £235,000.

Richard Ward, executive chairman of Kellan Group, said: 2Excluding the effect of the £2.6 million goodwill impairment in 2016, year-on-year earnings before tax increased from £0.1 million in 2016 to £0.4 million in 2017. Adjusted EBITDA for 2017 of £1.02 million compared with £0.77 million in 2016 is very encouraging."

The group's success was partially driven by a strong performance from its Berkeley Scott division which saw operational improvements and a 10% increase in average productivity per fee earner.

However, the company's RFK Group offset this by underperforming in 2017 as annual net fee income declined by 32% to £910,000 as changes within the management team disrupted operations.

"Overall group performance to date for 2018 is ahead of board expectation and I am confident that the changes implemented will lead the group to increase its revenue in 2018 and beyond," said Ward.

As of 1038 GMT, Kellan Group's shares were up 6.90% at 0.77p.

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