12th Oct 2015 09:06
LONDON (Alliance News) - ClearStar Inc Monday said it is on track to report significant growth in revenue in 2015, in line with expectations, and will break even in earnings before interest, tax, depreciation and amortisation for the second half of the year, although it will post a loss after tax for the full year.
Shares in ClearStar were trading down 8.5% at 40.25 pence following the announcement Monday morning.
The technology and service provider to the background-check industry said it entered the second half of 2015 with a greater sales pipeline than the prior year and that progress was maintained in all of its divisions.
It said the Direct Services division continued to expand its customer base as it won a contract with "one of the world's largest cash handling services companies". It did not state who the company was, but noted that the contract is at a revenue run rate of USD250,000 annually.
ClearStar added that, as a result of higher non-cash amortisation charges due to an acceleration in software investment and a decrease in income tax liabilities due to a delay in profitability, it expects to make a loss after tax of USD2.3 million for the full year.
However, it expects to report a profit after tax above market expectations in 2016 as it anticipates preserving a full allowance on net deferred income tax assets.
"The board believes that the underlying fundamentals of the business remain strong and demand for its services across its divisions continues to increase. Furthermore, as a result of the restructuring announced earlier, it has the right people focused on the right markets at a greatly reduced cost base. Consequently, the board remains confident of achieving sustained growth and of delivering value to shareholders," the company said in a statement.
By Karolina Kaminska; [email protected] @KarolinaAllNews
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