Greater client demand and a targeted sales & marketing effort has contributed to a 49% increase in gross profit (GP) for ClearStar, a technology and service provider to the background check industry.

The US and UK-based company’s financial results for the six months (H1) to 30 June show GP increased to US$4.5m (£2.9m) compared to H2 last year.

Revenue over the period increased 43% to $7.5m, with gross margin increasing 2.4 percentage points to 60.5%. Increase in revenue included $1.3m from the acquisition of SingleSource, also a background screening company, in December.

ClearStar chief financial officer David Pattillo told Recruiter it had been a “transformational year”, following an initial public offering (IPO) in July 2014.

Part of that transformation was a paring down of the existing sales force in favour of experienced professionals. 

ClearStar chief executive Bob Vale told Recruiter a large sales force was initially hired to pursue mid-market opportunities, but the company found it was attracting large corporate customers and needed suitably skilled salespeople.

During H1, the company signed a major contract with a UK customer, a global risk management consultancy, the identity of which Vale and Pattillo declined to divulge. Income from that deal is not expected until later this year. The company also signed its first multi-lingual client, a French company.

Post-H1 end, the company has begun “realignment initiatives”, which are expected to result in a 14% headcount reduction and save $1.2m a year.

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