8th Sep 2014 10:03
LONDON (Alliance News) - ClearStar Inc Monday said it swung to a pretax loss in the first-half despite a big jump in revenue on the back of a rise in costs, though the company said it was confident of strong growth across all its divisions in the full-year and said it would consider making acquisitions in order to boost its overseas operations.
The company, which provides technology to the background check industry, said its net loss for the six months to June 30 was USD32,000, down from the USD310,000 profit posted a year earlier. Revenue for the company was up 43% in the period, to USD5.2 million from USD3.7 million a year earlier, but the cost of revenue increased to USD2.2 million from USD1.3 million and its general and administrative expenses were also hiked, up to USD2.3 million from USD1.7 million last year.
ClearStar said the costs were related to its initial public offering, to the build up of a sales team, the opening of an office in the UK and technology development.
The revenue rise was driven by a 16% rise in sales from its Channel Partners and Consumer Reporting Agencies business, up to USD3.2 million from USD2.8 million. Medical Information Services sales more than doubled to USD1.9 million, from USD770,000, and Direct Services sales were up to USD150,000 from USD108,000 last year.
The company said it has entered the second-half of the year with good visibility of revenue as the growth seen in the first-half continues. It said the market for background screening remains robust at present and the company is continuing to invest to take advantage of opportunities. It said it would consider making an acquisition, having raised USD15 million from its IPO.
"We achieved strong organic revenue growth and opened a London office to focus on our international expansion. Looking ahead, we have entered the second half of the year with good visibility of revenues as the growth momentum seen in the first half of the year continues," said ClearStar Chief Executive Robert Vale.
"As a result, the board feels confident of delivering significant growth across all divisions for full year 2014," Vale added.
ClearStar shares were down 3.5% to 55 pence per share on Monday.
By Sam Unsted; [email protected]; @SamUAtAlliance
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