Close the Loop Limited (ASX: CLG) has reported mixed half-year results for the period ended 31 December 2025, with its Packaging Division delivering double-digit growth and providing a stabilising influence across the Group.
The circular economy company posted revenue of $92.3 million, up 2 per cent on the prior corresponding period (pcp). Underlying EBITDA was $9.3 million, down 23 per cent, while underlying NPATA fell 61 per cent to $2.5 million. Net debt increased 12 per cent to $56.98 million, reflecting lower operating cashflow during the period.
While softer trading conditions and operational challenges in the North American recycling and ITAD segments weighed on Group earnings, the Packaging Division recorded a solid performance, with revenue and EBITDA both increasing on the pcp and on the second half of FY25.
According to the company, all four packaging businesses outperformed prior periods (organic revenue growth of ~18% compared to the pcp), driven by expansion within existing Tier-one customer accounts and the addition of new corporate clients. CLG reports that growing demand for sustainable packaging solutions is driving positive momentum within the division.
The performance was underpinned by strong results in South Africa and Australia, with the South African operations in particular demonstrating scalability. The business secured new orders from both existing and new customers, servicing additional volumes using the existing cost base, highlighting operational efficiency and the potential for sustainable growth.
As part of a strategic review, management identified Alliance Paper Pty Ltd and O F Flexo Pty Ltd as non-core businesses. The Group completed the divestment of Alliance Paper’s thermal paper and rolls business in October 2025, and the sale of O F Flexo, a flexible packaging manufacturing operation, effective 31 July 2025. Both moves align with management’s stated focus on cash-generative, strategically aligned operations.
Commenting on the results, Kesh Nair, CEO of Australia and South Africa, said, “The half under review has been a period of stabilisation and decisive action across the business. Management has focused on resolving several operational and legacy matters while strengthening operational processes and internal controls. These initiatives are improving discipline across the Group and providing greater visibility over performance and future opportunities.”
He noted that the Group’s first-half result fell short of both the previous corresponding period and management expectations, as losses from non-core and discontinued operations weighed on profitability.
However, Nair pointed to packaging as a key source of stability and earnings consistency within the portfolio.
“While overall Group financial performance in 1H26 was below the prior corresponding period and internal expectations, the Packaging Division continued to demonstrate resilience and remains a strong and stable business within the Group, delivering comparatively improved earnings during the half. We remain confident in the Division’s ability to generate solid ongoing performance and underpin the Group’s longer-term growth.”
Looking ahead, the Group management is progressing a broader portfolio review and assessing options to divest assets not aligned with the company’s core strategy. Strengthening the balance sheet is also a priority, with a focus on reducing leverage through targeted divestments, operational restructuring and improved cash generation.
For Close the Loop, the result reinforces the Packaging Division’s role as a dependable earnings contributor within its circular economy platform, supported by Tier-one customer growth and solid performances in Australia and South Africa. As the broader Group streamlines its operations, packaging is positioned as a central pillar of future performance.
