Ahead of its inaugural investors meeting in Melbourne today, Close the Loop Group (ASX: CLG) has upgraded its FY22 revenue and EBITDA prospectus forecasts by 11% and 10.5% respectively, with a current annual revenue run rate of over $100 million. PKN spoke to Group CEO Joe Foster about progress and acquisitions on the cards.

It’s been quite the run since CLG listed on the ASX last November, with a series of swiftly-integrated acquisitions that have boosted the businesses revenue and opportunities for expansion.

CEO Joe Foster tells PKN that strong organic revenue growth occurred across all divisions, particularly in Close the Loop in the United States and Europe, O F Pack, O F Flexo and Foster International, where volume increases, and operating leverage are driving earnings significantly ahead of plan.

Foster told investors today the FY22 revenue prospectus forecast is up 11 per cent to $82 million, from $73.9 million; and the FY22 EBITDA prospectus forecast is up 10.5% to $13.6 million (from $12.3 million).

“In our first six months as a listed entity Close the Loop Group has enjoyed considerable organic revenue growth across all divisions,” he said.

“This is due to our ability to successfully integrate complementary businesses that strengthen our capability as the only ASX-listed company operating in all parts of the circular economy.

“When you take our acquisitions of Crasti & Co and Oceanic Agencies into account, we now have annualised revenue of around $100m.”

Foster told PKN CLG is scoring from implementing successful strategies to recycle materials that are hard to recycle and giving brand owners take-back-scheme solutions for dealing with pre consumer packaging waste, such as redundant packaging from discontinued lines, or changes in labelling laws, for example.

He says the group has extensive capabilities that are unmatched by other circular economy providers, from product design, manufacturing, collection, and recycling and then eventually recovering it as new packaging or secondary products, or simply creating a packaging-to-packaging loop.

Foster also told PKN that the group will be investing $1million to upgrade its TonerPlas manufacturing line at its Melbourne Close the Loop facility, expanding current capacity four times, to meet increased demand for the patented, high-performance asphalt additive made from soft plastics and waste printer cartridge toner. TonerPlas is used in roads across Australia to construct suburban roads and freeways including the M80 ring road and Monash Freeway in Melbourne.

Other investments in upgrades include at the group’s US facility, which will implement a new automatic optical recognition system to improve efficiency, with the system to then be introduced across Australian and European facilities. In addition, the US plant is installing a new washing and separation line due for completion this calendar year. Further, the Group has launched its European packaging business to handle flexible packaging sales for new and existing customers.

In another new move, CLG has signed an MOU to produce the patented Resin8 product range in Australia following its successful launch in other parts of the world. Resin8 is a range of structural and concrete products manufactured for and used in the construction industry. It is manufactured from all types of consumer waste plastics, taking advantage of circular integration across the Group. The full product range is expected to become available during FY23.

In South Africa, expansion plans are afoot: following the planned withdrawal of the market leading competitor, CLG is looking to expand its sustainable packaging business.

The Group is also examining three possible complementary acquisitions, with non-binding term sheets signed, in line with its prospectus strategy. One of the potential acquisitions is in sustainable paper manufacturing and recycling, whilst the others are in resource recovery and sustainable packaging.

Foster said, “While FY22 is shaping up to be a great year for the company, Close the Loop Group is also ensuring that upgrading its ability to scale as demand for recycled products generated through the circular economy increases. These initiatives include production capacity increases, efficiency improvements, new product ranges as well as examining strategic acquisition opportunities.”

Food & Drink Business

SSS Strawberries, one of Australia’s largest strawberry growers, has opened its 4000 square metre freeze drying factory in Bundaberg, Queensland. At capacity, the factory will be able to process more than 2000 tonnes of fruit.

Gravox and St Vincent De Paul Society’s ‘Buy a Boat’ auction initiative featuring upcycled bespoke gravy boats has raised $1900 for those in need this festive season.

In a major boost for the potential uptake of Packamama’s eco-flat rPET wine bottles in Australia, the company has opened a bottling facility in Cudal, NSW, in collaboration with Tamburlaine Organic Wines.