The sustainable packaging operations of Close the Loop Group achieved double digit sales growth in the half year to December, partially offsetting declines in its North American Resource Recovery Business, as the company continues to field interest in a sale of the business.
The Close the Loop packaging businesses in Australia and South Africa delivered an 11 per cent sales growth compared to the previous corresponding period, driven, says the company, by a focus on winning and onboarding larger clients with global operations.
The packaging division achieved four per cent net profit after tax growth from the same period last year, although Close the Loop had to shave its margins to win new customers, and to retain some of its existing customer base.
Close the Loop says its packaging business continues to have strong demand for its specialised range of sustainable packaging. The company expects continued growth from packaging as it grows market share from newly won client accounts.
Revenue for the group overall dipped by 3.8 per cent in the half year, to $99m, with EBITDA down by 46 per cent to $12.2m. Close the Loop recorded an after tax loss of $623,000, compared with a profit of $5m in the same period last year. Its underlying net profit after tax of $5.6m was less than half of the $13.2m achieved in the same period the year before.
Revenue from Australia was eight per cent higher than the same period last year, at $33.5m, a third of the group total. EBITDA though fell to $256,000 compared with $4.9m last time, with the company making a $1.2m after tax loss in Australia, compared to a $1.6m profit in the prior corresponding period.
The company said the Group results have primarily been impacted by the performance of its Resource Recovery business in North America, which experienced a decline in revenue and profitability. However it says the issues that caused that have been resolved, and says it expects improved second half figures as a result.
Despite the aborted sale of the business to private equity fund Adamanten, Close the Loop says it is actively fielding interest in the company from other would-be buyers. The directors remains of the view that to address high growth end markets, and deliver the expansion plans the company to has capture a share of these markets, a new investor may be beneficial.
The board now comprises Grant Carman, Sammy Saloum, and Lawrence Jaffe, as well as John Chambers who was appointed 21 November, the same day that chairman Greg Toll, CFO Marc Lichtenstein, and CEO Joe Foster resigned their directorships. That was the day the Adamantem bid was launched.
