(Alliance News) - ClearStar Inc on Wednesday reported an unchanged loss for 2019 and said that it is too soon to assess the full financial damage of Covid-19 pandemic.
The background and medical screening company also said that it has seen a significant reduction in volumes and has implemented mitigation measures to reduce operating costs, including non-executive directors forgoing their fees and voluntary salary reductions for all employees, which are expected to generate up to USD2.3 million in savings in 2020.
For 2019, ClearStar recorded a flat pretax loss of USD1.4 million due to increased interest expenses as a result of utilisation of the credit facility.
Adjusted earnings before interest, tax, depreciation and amortisation doubled to USD400,000 from USD200,000 as a result of higher revenue.
Annual revenue increased by 14% to USD23.0 million from USD20.1 million, driven by sales of the company's Medical Information Services and ramp-up of new direct customers that were won in 2018, primarily for background screening.
As of Tuesday, the company had net debt of USD1.0 million, which included a USD1.1 million loan received under the US Paycheck Protection Program.
Chief Executive Officer Robert Vale said: "Our business model has meant that we could adapt rapidly in response to the Covid-19 outbreak - with the procedures and technology in place to enable remote working and with the same strict level of security. There has been no degradation in our quality standards and we have not lost any customers, however, volumes have been significantly reduced.
"We have acted decisively to cut our costs to support our liquidity during this period and I am proud of the response of our employees to this crisis, but it remains too early to predict the full financial impact on the Company in the current year. The board continues to monitor the situation closely and we will update the market as necessary".
Shares in the company closed at 40.00 pence each on Wednesday in London, up 2.3%.
By Tapan Panchal; tapanpanchal@alliancenews.com
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