ClearStar Inc (LON:CLSU) shone on Tuesday as it recorded its highest-ever six-month revenues in the first half of 2019, with medical information services once again being the primary growth driver.
In a trading update for the period ended 30 June, the background and medical screening group reported revenue growth of around 17% year-on-year (YOY) to US$11.6mln.
READ: ClearStar shines as it achieves highest ever monthly revenues in May 2019, reiterates full year guidance
The strongest growth came from ClearStar’s direct services business, which climbed 49% in the period while its share of total revenues increased to 36% from 28% a year ago.
Medical information services, meanwhile, saw revenues rise by 25%.
ClearStar said the growth was supported by strong recurring revenue as well as the upselling of further services to some of its largest existing clients.
As a result, the company continued to expect “strong revenue growth” for the full year, in line with market expectations.
Direct sales expansion
Aside from the revenue figures, the firm said both its revenue and pipeline had increased following the expansion of its direct sales team over the year.
It added that "further progress” had also been made in its key markets of transportation, logistics and financial institution screening as well as its expansion into new areas such as petrochemical services.
Robert Vale, ClearStar’s chief executive, said the “fantastic period” was built on contributions from new customers and on increased business from existing ones.
He noted that the company has begun each of the last five years from a higher revenue base and that for this year the group was tracking its “strongest growth trajectory yet”..
“With an expanding pipeline and a booming US jobs market, we remain confident of achieving strong growth for full year 2019 and look forward to reporting further progress", the CEO concluded.
House broker hails “impressive” performance
In a note to clients, analysts at ClearStar’s 'house' broker finnCap hailed the “particularly impressive” results, adding that the strong US labour market allied with the gig economy’s requirements for fast and flexible employment and screening processes meant underlying growth drivers remained in place.
The analysts also noted that in general the firm was continuing to benefit from its switch to direct from channel sales, assisted by a “strengthened sales team”.
While ClearStar shares have recently suffered from some “volatile trading”, finnCap reiterated its target price of 90p saying the underlying business remained in “excellent health” and was delivering “impressive growth”.
In early trading, ClearStar shares were up 16.5% at 62.9p.
--Adds broker comment and updates share price--