ASX-listed Close the Loop Group (CLG) has reported a downturn in its FY25 results, with revenue, earnings and margins impacted by shifts in product mix, but management says strategic realignment and new growth initiatives will strengthen performance in FY26.
FY25 performance
The group recorded revenue of $195.1m, down 6.7% on the prior corresponding period (pcp). Gross profit fell 26.1% to $58.3m, with gross margin at 29.9% compared to 37.8% in FY24. Adjusted EBITDA dropped 59% to $18.4m, and the adjusted EBITDA margin contracted to 9.4% from 21.5%. Net profit before tax declined sharply, with a loss of $20.1m compared to a $14.4m profit in the pcp.
Management attributed the weaker results to an unfavourable product mix in the Resource Recovery (ITAD) division, which reduced earnings despite resilient demand across the business.
Business developments
Resource Recovery (ITAD) operates refurbishment and resale of IT equipment, alongside printer cartridge recycling through a global network of 260,000 collection points processing around 50 million cartridges annually. A new approval for the group’s Mexicali plant under Mexico’s IMMEX program will enable recycling of computer hardware and support increased volumes in FY26.
The Packaging division focus on reusable and eco-friendly packaging such as flexibles and pouches for FMCG customers. The division is benefiting from growing demand for sustainable solutions and is pursuing cross-selling opportunities across its international footprint. R&D is being directed toward smart packaging and product diversification into categories including health and beauty.
During FY25, CLG also undertook a strategic review of underperforming units, made key leadership appointments – including Kesh Nair as executive director and CEO of Australia and Matthew Zimmer as CEO of North America – and confirmed that a private equity bid did not progress. The company’s focus has shifted squarely to organic growth.
Strategic priorities
To drive recovery and future growth, CLG's strategic priorities include:
- Improving cash conversion through faster payment terms, reduced inventory, group-wide purchasing, and operational efficiencies to reduce debt and expand operations
- Building brand equity in packaging by sourcing and selling high-quality products, expanding the sales team, and leveraging international markets such as Australia and South Africa.
- Increasing ITAD volumes by expanding globally, strengthening OEM partnerships, and building an end-to-end reverse supply chain that combines refurbishment, recycling and logistics to support compliance and sustainability for clients.
Outlook
Looking to FY26, CLG expects to benefit from new ITAD programs with existing OEM clients, rising volumes at the Mexicali facility, and deeper engagement with global OEM partners. Management is targeting growth initiatives to broaden the customer base, enhance service capabilities, and capture market share by offering a complete reverse logistics solution.
“By sharpening operational focus and leveraging our infrastructure globally, we are positioning Close the Loop as a one-stop partner for OEMs seeking both packaging and recovery solutions aligned with the circular economy,” the company said.
