Close the Loop (CLG) H2 2025 earnings summary

Executive summary

• FY25 revenue was $195.1 million, with gross profit at $58.3 million, reflecting a challenging year marked by a 26% revenue decline and a 59% drop in EBITDA, mainly due to ITAD underperformance and one-off costs.

• Net profit before tax was -$20.1 million, impacted by significant one-off expenses, impairments, and a swing from a prior-year profit.

• Strategic focus areas include improving cash flow, packaging performance, ITAD volume growth, OEM expansion, and cost efficiencies, with a five-pillar strategy for FY26.

• Leadership changes and restructuring initiatives are underway to drive operational discipline and future profitability, including new CEOs for Australia and North America.

• Performance was impacted by unfavorable ITAD product mix, one-off costs, and closure of underperforming business units.

Financial highlights

• Adjusted EBITDA was $18.4 million, with margin dropping to 9.4% from 21.5% year-over-year, and $7.6 million in one-off costs added back.

• Underlying adjusted net profit after tax (NPATA) was $7.8 million, down 70% year-over-year, while statutory net loss after tax was $16 million due to impairments and one-offs.

• Quick cash conversion ratio was 92%, with $11.8 million net cash generated and an ending cash balance of $32 million.

• Net debt increased to $53.5 million, up 26% year-over-year, partly due to lower operating cash flow and accounting reclassification.

• CapEx for FY25 was $3.3 million, primarily for the Mexicali facility and plastic recycling business, with significant reduction year-over-year.

Outlook and guidance

• Management is optimistic for FY26, expecting improved profitability as ITAD operations scale, new programs launch, and underperforming businesses are streamlined.

• Five strategic objectives for FY26 include improving cash conversion, maintaining packaging performance, increasing ITAD volumes, OEM expansion, and cost efficiencies.

• Expansion into Europe and Asia Pacific is underway, with new operations in Malaysia and Singapore.

• Anticipates benefits from cost-out initiatives and new facility operations from 2H26 onward.

• No formal financial guidance provided yet for FY26; management will update the market as the year progresses.