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ClearStar further extends contract for financial institution screening with outsourcing client

Last updated: 23:40 29 Apr 2019 AEST, First published: 16:51 29 Apr 2019 AEST

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The extension represented an expanded scope of services being provided by the client to one of its customers

ClearStar Inc (LON:CLSU) has announced a further extension to a contract for its financial institution screening capabilities with a customer that provides outsourcing services.

The background check services firm said the new extension would generate around US$350,000 in additional revenue over the next three years, with further orders expected over 2019.

READ: ClearStar sparkles as it posts highest ever first-quarter revenue

The contract, which was initially awarded in late 2018 and extended earlier this year, covers screening for staff placed with the customer's financial institution clients to ensure compliance with various US federal laws, including the Federal Deposit Insurance Act and the Patriot Act.

ClearStar said the extension represented an expanded scope of the services being provided by the client to one of its customers.

Robert Vale, ClearStar’s chief executive, said the expanded scope was due to the company being able to supply the client “with all the information they needed in a very quick turnaround time that was quicker than their previous provider”.

“Having demonstrated our value to more than one major financial institution, we are confident that the momentum with this customer will continue and we will further increase our revenues in this area."

In a note to clients, analysts at 'house' broker finnCap said: "This ClearStar customer in the financial services sector has delivered $0.5m revenue since the initial contract, and helps to underpin our forecasts." 

finnCap reiterated a 90p target price on ClearStar shares which in late afternoon trading held steady at 58.50p.
 
 -- Adds analyst comment, share price -- 

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