Close the Loop (ASX: $CLG) 1H'24 Results Overview

Close the Loop Limited (ASX: $CLG) has reported a significant growth in revenue and EBITDA for the half year ended 31 December 2023. The company's revenue for 1H'24 amounted to $106.2m, on track to exceed the FY24 guidance of $200m, with an EBITDA of $22.7m. Additionally, the company has reduced its net debt by $11.8m to $26.2m and holds $55.7m in cash at bank.

Executive Commentary on 1H'24 Results

Following the acquisition of ISP Tek Services nearly one year ago, we are pleased to report that the financial performance of ISP Tek Services is tracking ahead of our revenue and EBITDA expectations. The ISP Tek Services acquisition has strategically positioned Close the Loop as a global leader in the circular economy, broadening and deepening our OEM relationships, providing the Company with geographic expansion opportunities. The global tailwinds for the circular economy are building strongly, with many major OEMs making public commitments regarding product circularity, reuse, and recycling. Close the Loop's leadership in the IT recovery space and our trusted relationship with the world's largest OEM, provides the Company with an opportunity to expand its Recovery Division globally. We are confident that our Recovery businesses' first-mover advantage in the global circular economy will be rewarded. Close the Loop's Packaging Division has delivered strong free cash flow for the period and new growth opportunities have been uncovered. While the second quarter of 1H'24 presented several challenges for Packaging, including disruptions to shipping lines, volatility in commodity pricing, and dampened sales volumes due to deteriorating economic conditions, we are pleased to report that Packaging maintained its EBITDA profitability. Conditions have improved post the reporting period, and management has actively addressed areas of underperformance in Packaging.

Summary of 1H'24 Results and Outlook

Close the Loop Limited (ASX: $CLG) has demonstrated strong performance in 1H'24, with significant revenue and EBITDA growth driven by the full impact of the ISP Tek Services acquisition. The company's strategic positioning as a global leader in the circular economy, along with the broadening and deepening of OEM relationships, provides opportunities for geographic expansion. The global tailwinds for the circular economy, coupled with the Company's leadership in the IT recovery space, offer potential for global expansion of the Recovery Division. Despite challenges faced by the Packaging Division in the second quarter of 1H'24, the company maintained EBITDA profitability and anticipates improved conditions moving forward. Close the Loop's focus on sustainability and the circular economy positions it well for future growth and success.