As we point out in this week's Shares, the stream of IPOs continues to flow in London. There are even unconfirmed rumours doing the rounds that as many as 30 new issues are currently clogged up in compliance red tape, but are closing in on a flotation within the next two or three months.
Today sees one get through the regulations and fund raising mire as ClearStar (CLST:AIM) joins AIM having tapped investors for £8.84 million, before costs, at 57p per share. Opening trading sees the share price edge up to 60p, a rough 5% rise.
It's very likely that you've never heard of ClearStar, and there are good reasons why. First, this is one of those rarities, a US company that has shunned Nasdaq for Britain's AIM. Hooray! Second, so far the company has limited its business growth largely to its home market. But that's about to change.
In effect, ClearStar runs a technology platform laced with several applications and powered by enormous employment data and intelligence designed to help employers spot unsuitable employees joining their businesses. According to the near-£22 million company, it sources data from more than 3,000 sources, packaging that intelligence to over 20,000 clients, either direct or via third parties.
This could involve screening a potential top level management appointment, or a short-term temporary workforce, such as it does for the scores of summer staff recruitment every year at the Six Flags theme park in the US. Other end users include IT systems giant IBM (IBM:NYSE), car maker Toyota (7203:T) as well as multiple US universities.
But this is no mini Kroll, the business investigations consultancy. ClearStar's process is completely transparent with reports sent to both potential employer and the individual screened, providing the latter with feedback opportunities.
With today's cash inflow ClearStar hoes to expand into the UK and other overseas markets as well as provide working capital and research and development funding.
According to the company, in 2013 it processed and delivered 5.6 million screening services on over 1.7 million people to over 20,000 end users.
'Despite the worldwide recession, there has been a four-fold increase in revenue since 2007 with no capital injection,' the company says.
For the year to end December 2013, ClearStar generated revenue of $8 million (£4.67 million) and earnings before interest, tax, depreciation and amortisation (EBITDA) of $1 million (approx £0.58 million), with net cash from operations of $900,000 (£520,000). Often integrating its applications directly into an end user's own human resources software suite means growing recurring revenues.
Shares will be interviewing joint founder and chief executive Bob Vale next week.
