ClearStar,Inc. Trading Update (2918T)
17 Julio 2020 - 1:00AM
UK Regulatory
TIDMCLSU TIDMTTM
RNS Number : 2918T
ClearStar,Inc.
17 July 2020
17 July 2020
ClearStar, Inc.
("ClearStar" or the "Company")
Trading Update
ClearStar (AIM: CLSU), a provider of Human Capital IntegritySM
technology-based services specialising in background and medical
screening, provides the following update on trading for the six
months ended 30 June 2020 and the impact of COVID-19.
As previously announced, having entered 2020 with its highest
ever order book and a healthy pipeline, the COVID-19 outbreak
impacted the Company's business due to the widespread job losses
and freeze on recruitment. However, ClearStar experienced a
significant uptick in revenue run rate from the end of May, which
has continued throughout June and into July 2020. As a result,
revenue for the first half was $8.9m (H1 2019: $11.6m). The Company
is pleased to report that revenue for June 2020 was 74% higher than
for April 2020 and returned to the same level of revenue seen in
February 2020. The growth in revenue from May is primarily from
financial institutions preparing for a return to normal employment
levels, business staffing companies as well as an increase in
demand for Medical Information Services.
The Company has continued to maintain tight control over costs.
As a result of the increased revenue combined with the decisive
mitigation measures implemented at the start of the outbreak and
ongoing cost control, ClearStar was able to return to generating
positive EBITDA for May and June. Consequently, the Company has
continued to reduce net debt to $1.4m as at 30 June 2020 and
increase available funds to $2.2m at that date. The Board remains
confident that the Company has sufficient funds to remain viable
for the foreseeable future.
Overall, during the period, ClearStar made significant progress
with the onboarding of previously-won customers and continued to
generate new business, and is greatly encouraged that it has not
lost a single customer throughout the pandemic. The growth in
revenue from the end of May was driven, in particular, by the ramp
up in volume of one of the three new financial institutions that
ClearStar was appointed to this year, which is a sizeable,
household name investment bank, and by an HR business outsourcing
customer. The latter customer, which has a market cap of $2.6bn,
operates from 70 offices throughout the US and typically fills more
than 4,000 recruitment positions per year. It appointed ClearStar
in H2 2019 and has been increasing in volume throughout H1 2020,
which the Company expects to continue as businesses transition to
more flexible working.
During the first half of 2020, a notable customer win, as
previously announced, was a NASDAQ-listed company that provides
technology testing and industrial automation. The onboarding of
this customer is nearing completion and the Company expects to
commence generating revenue by the end of this month.
In addition, at the end of the first half of 2020, ClearStar
signed an agreement for an integration with a provider of
end-to-end technology solutions for home healthcare agencies and
community organisations. This integration, once live later this
year, will enable users of the platform in the US and Canada to
seamlessly, through a single platform, utilise ClearStar's
background screening services alongside their other operational
activities for workforce and business management. This represents
the addition of another route-to-market in a key industry for
ClearStar, where it has been receiving increasing demand as the
COVID-19 outbreak is driving greater reliance on home care.
To meet this sustained return in demand, a number of the
Company's employees are now working from its office in Georgia and
its employees in Florida will be imminently returning to the
office, with appropriate health and safety measures in place
throughout.
Robert Vale, CEO of ClearStar, said: "We are greatly encouraged
by the strong recovery in revenue since the peak of the crisis. The
areas that are driving this growth - business outsourcing,
financial institutions, home healthcare - are well-positioned for
the current environment and the changing needs of workplaces and
individuals. We have continued to win and onboard customers, and
secured an important new integration that will expand our presence
in home healthcare. Thanks to the decisive action we took in
response to the outbreak, we have been able to generate cash to
increase our available funds and sustain our business. At the same
time, the long-term trends in background screening remain
supportive - with employers increasingly screening more employees,
with more detailed searches and at more occasions during the
employee lifecycle than just recruitment. Consequently, the Board
remains optimistic about the future and thanks shareholders for the
ongoing support."
The Company will provide further details in its interim results
announcement, which is expected to be issued in September 2020.
Enquiries:
ClearStar, Inc. +1 877 796 2559
Robert Vale, Chief Executive Officer
Jennifer Balleza, Chief Financial Officer
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finnCap Ltd. +44 20 7220 0500
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Jonny Franklin-Adams, Marc Milmo, Simon Hicks
- Corporate Finance
Andrew Burdis, Tim Harper - ECM
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Luther Pendragon +44 20 7618 9100
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Harry Chathli, Claire Norbury, Joe Quinlan
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About ClearStar
ClearStar, Inc. is a leading provider of Human Capital
IntegritySM technology-based services specialising in background
and medical screening. It provides employment intelligence direct
to employers and via channel partners/consumer reporting agencies
("CRAs") to support better recruitment and other decisions
affecting employees by increasing the quality, reliability and
visibility of information.
A seven-time Inc. 5000 honouree and founding member of the
Professional Background Screening Association, 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 .
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END
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