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ClearStar Inc: DEEP DIVE

ClearStar leverages technology for competitive edge in candidate screening sector

The company provides background check and medical screening solutions for employers to give them reliable information when hiring new staff.
Background check
OVERVIEW: CLSU The Big Picture
ClearStar's products include ScreenMeNow, a mobile app that allows candidates enter their data for a background check using their phone

• Provider of candidate background and medical screening services
• Products include range of mobile applications
• Record revenues and positive EBITDA in 2018

What ClearStar does

ClearStar Inc (LON:CLSU) provides background check and medical screening solutions for employers to give them reliable information when hiring new staff.

The group’s products include;

• ScreenMeNow – a mobile application that allows candidates to conduct their background check using their phone with an e-signature

• ClearID – app designed to validate IDs and provide face-match technology for contract labour

• ClearContact – collates and organises contract worker contact details into a single directory

• ClearMD – drug screening and clinical testing solution that allows candidates to perform their own tests and book their own appointments

Inflexion Points

• In May, ClearStar swung to an underlying profit in 2018 results as a jump in big-name clients helped it generate record revenues

• In a trading update in April, ClearStar reported its highest ever first-quarter revenue of US$5.1mln, up 11% year-on-year

• In late-April, the company announced a further extension to a contract with an outsourcing client, which was expected to bring in around US$350,000 in additional revenue over the next three years

Blue Sky

In its full year results, ClearStar chief executive Bob Vale said  the group had generated its “highest ever annual revenue and positive EBITDA" and that the positive momentum had continued into 2019 with the record first quarter.

“In particular, we achieved excellent traction in our key growth markets of Medical Information Services and direct sales, where we continued to move up-channel as well as enter new segments.”

“We are benefiting from the investments made last year as the technology improvements, integrations and enhanced sales & marketing are raising our brand awareness and enabling the successful targeting of larger, higher-volume customers.

“As a result, we continue to expect to achieve strong growth for full year 2019, in line with market expectations.”

What the broker says

In a note in May, analysts at ClearStar's 'house' broker finnCap said the group's 2018 performance had beaten their original forecasts and lifted their sales expectations for the 2019 financial year to US$22.9mln from US$22.5mln previously.

Analysts added that the company had "laid the foundations for accelerating growth" through product development, integrations and a strengthened direct sales team.

finnCap currently has ClearStar pegged with a 90p price target. 

With the shares trading at around 60p as of 13 May, ClearStar has a market cap of £21mln.

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ClearStar Inc Timeline

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