A 13% fall in half year sales and declining operating profit at recruitment microcap Kellan (KLN:AIM) prompts investors to jump ship, sending the share price in to 24% tailspin to 0.9p.

The firm’s sales declined from £11.5 million to £10 million in the six months to 30 June.

Kellan says uncertainty surrounding the EU referendum resulted in clients taking longer to make decisions and experienced slower job flow and candidate attraction after the result.

Operating profit has fallen significantly from £341,000 to £31,000 over the same period, while net fee income (NFI) fell 10% to £3.3 million.

Executive chairman Richard Ward says: ‘The results for the six months of 2016 have been disappointing, although the group has had success in securing new clients and growing some areas of the business.’

The recruiter has reduced its overheads by 2% and halved its losses to £0.1 million.

Berkeley Scott’s temporary businesses has been flat year-on-year as the new living wage impacted performance and clients re-evaluated staffing levels, pay and use of temporary workers.

The firm’s permanent business has seen NFI in London fall by 14% as the market became more challenging and contributed to the underwhelming performance.

However, Kellan says the RK business is continuing to grow and it has better success in the property, construction and manufacturing sectors.

Issue Date: 19 Aug 2016