Close the Loop Limited (ASX: CLG), an end-to-end solutions provider from design and manufacturing, through to collection and recycling of products, has announced its financial results for the half-year ending 31 December 2021, revealing an EBITDA of $7.4 million, up 51 per cent on pcp and an NPBT of $4.97 million, up 67.7 per cent on pcp.
Commenting on the company’s financial performance, its CEO Joe Foster said, “The second half of 2021 was a milestone for both the combined Company and the sector, as Close the Loop became the first company to list on the ASX that provides full circular-economy solutions.
“Our oversubscribed IPO has demonstrated the appetite the market has for trusted sustainable businesses and has significantly increased our capability to reduce the amount of waste that ends up in landfill and instead have it recycled into new products.
“We close out the half year in a strong financial position, on track to meet end-of-year forecasts on a pro forma basis. All divisions are performing well against forecast and the expertise gained through both sides of the merger bodes well for future operations, broadening of services to our various customer bases and acquisitions. In challenging operating conditions due to COVID restrictions in various jurisdictions, the company has performed well through its ability to rely on complementary business units.
“Pro forma revenue of $40.7 million was underpinned by strong growth in both the packaging and resource recovery businesses, generating EBITDA of $7.4 million. This strong financial performance was driven by our USA operations trading ahead of budget, along with the addition of new services in the EU and has us well placed to meet end-of-year forecasts.
“Operationally, we have made headway on our growth strategy acquiring two strategically compelling businesses, Oceanic Agencies and post reporting period, Crasti & Co, that will further strengthen Close the Loop’s ability to provide a broad range of products to meet the growing need for a circular economy solution as it fits well into our take back and circular economy program.
“We are already making headway in creating synergies for O F Packaging customers in determining how we can use our Close the Loop recovery and reuse capability to create new take-back programs that also help them improve their ESG credentials into their supply chains.”
With pro forma revenue of $40.7 million, Close the Loop said its performance was underpinned by strong growth in both the packaging and resource recovery businesses.
“We are seeing strong demands for recyclable ready packaging and recycled content which are products that are readily available through the various divisions. With foreign exchange movement and raw material increases putting margins under pressure, these adjustments are being passed on when possible,” the company said.
The OF Packaging businesses experienced strong sales during the period, improving throughputs and refining manufacturing equipment lines and operations.
The O F Flexo division has traded ahead of budget throughout the period with high demand for locally produced packaging containing high percentages of recycled content and more recyclable ready packaging, according to the business.
For the Close the Loop division, the US business has gained momentum as trading conditions rebounded strongly with collection volumes approaching pre-COVID levels. Europe continues to track to budget. Australian operations were impacted by lockdown activity in several jurisdictions, as the recycling business is volume-based. However, volumes have increased in November and December.