Background checking group ClearStar Inc (LON:CLSU) swung to an underlying profit in 2018 as a jump in big-name clients helped it generate record revenues.
Chief executive Robert Vale said the momentum had carried over into the opening months of 2019.
For the 12 months ended 31 December 2018, revenue rose 13% to US$20.1mln (2017: US$17.8mln), buoyed by strong growth in medical information services and direct sales, thanks to more high-volume tier 1 clients.
ClearStar won its first contract to screen employees for a major financial institution last year, while a second has recently come on board as well. The company has also signed up its first petrochemical client since the beginning of 2019.
The top-line growth fed through the bottom line, with adjusted underlying earnings (EBITDA) swinging to US$154,000 from a loss of US$391,000 in the year before. Loss from operations narrowed to US$1.3mln (2017: US$1.9mln).
Cash flow also improved to US$380,000, versus an outflow of US$184,000 in 2017. At the end of December, the company had net cash of US$0.9mln.
Boss predicts “strong” 2019
“This was a great year for ClearStar as we generated our highest ever annual revenue and positive EBITDA while continuing to strengthen our business,” said chief executive Vale.
“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.”
He added: “The revenue momentum of 2018 has been sustained into 2019, resulting in a strong first quarter performance.
“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.”
ClearStar shares rose 3.5% to 60p at the opening bell on Monday.