Close the Loop (CLG) H1 2026 earnings summary

Executive summary

• Revenue increased 2% year-over-year to $92.3 million in H1 FY2026, driven by strong Packaging division growth, while Resource Recovery faced product mix challenges.

• Statutory loss after tax was $26.9 million, impacted by a $23.2 million intangible asset impairment and $6.2 million amortisation; underlying net profit after tax (excluding one-offs) was $2.3–$2.5 million, down from $5.7 million.

• Strategic review led to divestment of Alliance Paper and OF Flexo businesses, with a focus on core, higher-margin and sustainable operations.

• Stabilization period emphasized debt reduction, cost control, and strengthening the balance sheet.

Financial highlights

• Gross profit rose 10% to $32.2 million, with gross margin improving to 34.9% from 32.4% year-over-year.

• EBITDA from continuing operations was $9.3 million, down 23% year-over-year, with margin at 10.1%.

• Net profit before tax was a loss of $28.6 million, compared to a $1.3 million loss in the prior year.

• Net finance costs increased to $5.0 million due to higher interest rates from prior covenant breaches.

• Net debt increased to $57.0 million, mainly due to cash outflows for discontinued operations and working capital.

• Cash on hand at period end was $24 million.

Outlook and guidance

• Packaging division expected to drive future growth, with expansion into New Zealand, South Africa, and robust demand for sustainable solutions.

• European contracts delayed, with material impact now expected in FY2027.

• Positive cash flow anticipated in H2, with ongoing focus on debt reduction and operational efficiency.

• Management targeting global OEM relationship expansion and reverse supply chain logistics.