Close the Loop (CLG) H1 2025 earnings summary

Executive summary

• Revenue for the half-year ended 31 December 2024 was $99.2 million, down 3.8%–4% year-over-year, with a net loss after tax of $0.8 million compared to a $4.9–$5.0 million profit in the prior period.

• EBITDA decreased 46% to $12.2 million, impacted by a temporary unfavorable business mix in resource recovery and delays in the Mexicali facility opening.

• Adjusted net profit after tax, excluding $6.3 million amortization of intangibles, was $5.5 million, down from $13.2 million in the prior period.

• Packaging businesses in Australia and South Africa achieved 11% sales growth and 4% NPAT growth year-over-year.

• The company is actively considering change of control proposals due to high growth market opportunities.

Financial highlights

• Gross margin declined to 32.1% from 36.2% year-over-year.

• Net tangible assets per share improved to 0.31 cents from negative 2.55 cents year-over-year.

• Cash from operations was $2.5–$2.6 million, with a net decrease in cash of $3.0–$3.1 million due to investments in facilities and working capital.

• Inventory increased 55% to $30.9 million, reflecting expansion into IT asset disposition.

• Net debt rose by $8.4 million to $50.9 million, mainly due to AUD devaluation against USD.

Outlook and guidance

• Management expects resolution of short-term challenges in business mix and facility delays in the coming months.

• Packaging division forecasts ongoing growth, with strong demand for sustainable packaging.

• Full financial impact of the European multi-vendor collection program expected in the second half of FY25.

• Improvement expected in Resource Recovery in North America in 2H25 as Mexicali facility comes online and ITAD inventory is processed.

• Material interest savings expected from debt refinancing in FY26.