24th May 2016 08:01
LONDON (Alliance News) - Background check technology provider ClearStar Inc on Tuesday said its 2016 revenue growth will be 10% below market expectations, whilst it anticipates its earnings before interest, tax, depreciation and amortisation to be "significantly below market expectations".
In a statement to be made at Clearstar's annual general meeting on Tuesday, Chairman Barney Quinn said the strong momentum in revenue reported at its 2015 results in March has continued since, driven by the development and introduction of new software as well as winning business from new clients.
However, Quinn said the revenue ramp of the "substantial contact" in its Medical Information Services division that had been expected to occur in 2016 has now been delayed to 2017. This was because the transfer of the Channel Partner client to the ClearStar platform "is taking longer than anticipated due to alterations in the client's requirements".
As such, Quinn said the increase in annual revenue is now expected to be between 20% and 25%, approximately 10% below market expectations.
Due to this lower-than-expected revenue, Quinn said earnings before interest, tax, depreciation and amortisation is expected to be "significantly below market expectations" in 2016, although noted that Clearstar still expected to be earnings before interest, tax, depreciation and amortisation positive in the year. This is on the back of the better-than-expected cost savings it is currently seeing, which are expected to continue to the full year.
"We have continued to strengthen the foundations of our business - in particular, our technology offering, which is our core strength. As noted previously, last year we completed the development of our biometric recognition software and a device agnostic solution with electronic address book, which, today, we are officially launching as ClearID and ClearContact respectively," Quinn said.
ClearID will allow users to verify the identity of a casual labourer by taking a photo of their face and their government-issued photo ID, whilst ClearContact will allow employers to organise their casual labour workforce through scheduling and tracking technologies, Quinn added.
ClearStar has filed for a provisional patent for its QebCCF drug testing product it said, and has launched a strategic review into its operations to evaluate ways to accelerate the development and sales of its technology.
"The board has commenced discussions with a number of interested parties, all of which are at a preliminary stage and may or may not lead to an acquisition of a proportion, or all, of the company's securities. The board confirms that it would not entertain any indications of interest that did not represent a significant premium to the current market value of ClearStar," Quinn said.
Shares in ClearStar were untraded on Tuesday, having last traded at 31.00 pence.
By Hannah Boland; [email protected]; @Hannaheboland
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