ClearStar,Inc. Trading Update (6929C)
21 January 2015 - 6:00PM
UK Regulatory
TIDMCLST
RNS Number : 6929C
ClearStar,Inc.
21 January 2015
21 January 2015
ClearStar, Inc.
("ClearStar" or the "Company")
Trading Update
ClearStar, Inc. (AIM: CLST), the technology and service provider
to the background check industry, is pleased to provide a trading
update for the 12 months ended 31 December 2014, ahead of its
Preliminary Results to be announced in March 2015.
Business Performance
This was a transformational year for ClearStar with increased
business across all three of its divisions from some of the
Company's largest existing customers as well as new customers, and
new product offerings. In 2014, the Company processed approximately
6.5 million screening services on over 2 million people that were
provided to over 27,000 end users. The Medical Information Services
("MIS") division launched a new release of its paperless chain of
custody software (WebCCF) that not only makes it simpler to embed
into other software offerings, but provides ClearStar customers
with a management suite to better service their own clients. MIS
was one of the fastest growing segments for the Company and is
expected to be a key growth area in 2015. During the year, the
Company also updated its background check portal for direct clients
to provide increased functionality and accessibility for mobile
devices. In addition, the Company commenced building its Direct
Sales division, including hiring and training a team of ten
salespeople. This has resulted in ClearStar receiving greater
interest from employers in its products and offerings, which is
expected to translate into increased direct sales revenues in
2015.
As a result of the above, the Company expects to report revenue
for the full year 2014 8% ahead of market expectations at
approximately $10.9 million, representing a 37% increase over the
previous year. Additionally, the Company continues to achieve
strong gross margins and anticipates exceeding gross profit market
expectations.
Acceleration of Investment Programme
The Company successfully completed its listing on AIM in July
2014 and raised approximately $15 million in gross proceeds. This
was to enable the Company to expand its operations in the US, as
well as internationally, through the setup of a permanent data
centre in the UK. As expected, the IPO raised the Company's profile
and enhanced the Company's credibility within its marketplace,
thereby resulting in heightened demand for its product offerings
domestically and internationally. Due to this heightened demand,
the Board has been able to accelerate its growth plan and bring
forward investment in many key areas that were originally
anticipated for 2015 into H2 2014.
These investments include:
(a) Entry into the UK screening market with the signing of the
Company's first agreement with a world-renowned, leading global
risk management consultancy for the development and hosting of a
white-labelled, customized solution. In order to maximise this
opportunity, the Company immediately began technology enhancements
to its Aurora platform to support international data elements and
user interface globalization, along with establishing a data centre
presence to meet UK and EU security and privacy requirements. It
also hired experienced programmers specifically to manage this and
future opportunities.
(b) In December 2014, ClearStar paid $3.2 million out of a total
consideration of $4.0 million to acquire a Florida-based background
screening company. This acquisition of SingleSource Services
Corporation is designed to accelerate the Company's stated strategy
to increase its market presence in direct sales to end users. The
Company incurred additional one-off adviser costs in relation to
the acquisition.
(c) Strengthening and growing the Company's service team to
capitalize on attractive market opportunities within the growing
U.S. screening market.
As a result of pursuing these opportunities and making the above
investments, some of which had been expected to be incurred in
2015, the Company's operational expenditure has been higher in Q4
2014 than previously forecast, with the benefit of these actions
expected to have a positive impact on the performance of the
Company from the second half of 2015 and beyond.
Outlook
As a consequence of the development of new product offerings in
the UK, the Company has received indications of interest from a
number of potential new clients and existing customers seeking to
buy more services from ClearStar. There are also further
opportunities derived from the SingleSource acquisition in
cross-selling products and entering new market channels. The Board
is optimistic about the future and believes the investment in the
full year to 31 December 2014 will provide the platform for growth
in providing access to new markets, and additional products and
services to both new and existing customers internationally.
Robert Vale, CEO of ClearStar, commented:"We are delighted with
the progress the Company has made this year, with top line growth
ahead of market expectations in all three divisions for 2014. We
have delivered on our stated growth strategy for expanding our
brand globally, particularly with our successful IPO and the
increase in our UK market presence. Our focus is on maintaining our
strong organic growth in all divisions, continuing to scale our
established technology platform and expanding our UK business. As a
result, we have a high level of confidence for delivering strong
future growth for years to come."
Enquiries
ClearStar, Inc.
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Robert J. Vale, Chief Executive
Officer
David Pattillo, Chief Financial
Officer +1 770 416 1900
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Cenkos Securities plc
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Max Hartley, Michael Johnson,
Corporate Finance
Andy Roberts, Sales +44 20 7397 8900
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Luther Pendragon Ltd
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Harry Chathli, Claire Norbury +44 20 7618 9100
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About ClearStar
ClearStar, Inc. is a leading and trusted background check
technology, strategic services, and decision-making information
provider to employers and background screening companies.
A seven-time Inc. 5000 honouree and founding member of the
National Association of Professional Background Screeners,
ClearStar has provided innovative technology solutions to
businesses in the human capital management industry from its
corporate offices in Alpharetta, Georgia since 1995. For more
information about ClearStar, please visit: www.clearstar.net.
This information is provided by RNS
The company news service from the London Stock Exchange
END
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