It’s been a ‘FTSE slug fest’ over the past 3 months. Firstly investors were rattled by US/China trade tensions, then uncertainty about Brexit/General Election, and more recently by conflict in Iran/Iraq and the deadly Coronavirus. The latter sending Chinese equities, travel stocks, crude oil, commodities and many other assets plummeting.
However, we suspect this pandemic will be largely a ‘Q1 phenomena’, especially outside of China. Not least, because Beijing seems to be doing a thorough job at reducing the spread of the disease. Whilst yesterday, the World Health Organisation said the number of cases was “stabilising”. The US economy is in good shape too, posting Q4’19 GDP of 2.3%, with the IMF predicting 2.0% for 2020 - underpinned by rising C-suite confidence, full employment, accommodative interest rates and resilient consumer spend.
So what does this all mean for US tech-enabled background/medical screening specialist, ClearStar? Well going forward, we think more of the same – new business wins, double digit organic growth, improving operating leverage and higher margins.
Indeed today, the company said it had secured another significant contract (min $0.4m in 2020). This time with a leading facilities management (FM) organisation to provide screening for people entering its 120,000 locations across North America serving numerous industries. All staff accessing these sites will be required to undergo a background check, and maintain an electronic ID card, facilitated by Virtual Badge.