CLG - Close the Loop

[System]

Close the Loop Limited (CLG) is an established operator in resource collection and recycling in Australia, Europe and the United States. Upon Listing, Close the Loop will have completed a Merger with the O F Packaging Group businesses, the core of which is the engineering of flexible packaging. The O F Packaging Group provides innovative flexible and carton packaging, printing and related sustainability solutions to domestic and international customers of all sizes.

The Merger and Listing will establish the Close the Loop Group as an Australian‑based participant in the global circular economy for plastic packaging, processing, recycling and refurbishment of print toner cartridges and other consumable products. The Close the Loop Group intends to provide an end‑to‑end solution, from design and manufacturing, through to collection and recovery, processing, recycling, and production of secondary products.

The entities that together comprise the Close the Loop Group on completion of the Merger will employ more than 240 people across sites in Australia, the United States, Belgium and South Africa. Following its Listing, the Close the Loop Group intends to make further strategic acquisitions where attractive opportunities arise.

Upon Listing, the Close the Loop Group's aim is to be a market leader in the circular economy, end‑to‑end solutions for reducing waste to landfill and getting recycled content back into new products.

It is anticipated that CLG will list on the ASX on 2 December 2021.

Close the Loop

World’s Largest Take Back Provider of Ink and Toner Cartridges. We work with the world’s ink and toner manufacturers in their sustainability efforts to

www.closetheloop.com.au

 

[Dona Ferentes]

Listing date	02 December 2021 ; 12:00 PM AEDT ##
Contact details	https://www.closetheloop.com.au/ Ph: 1800 24 24 73
Principal Activities	Resource collection, recycling and packaging
GICS industry group	TBA
Issue Price	AUD 0.20
Issue Type	Ordinary Fully Paid Shares
Security code	CLG
Capital to be Raised	$12,000,000
Expected offer close date	19 November 2021
Underwriter	Not underwritten. Aitken Murray Capital Partners Pty Ltd and Cumulus Wealth Pty Ltd (Joint Lead Managers)

 

[Dona Ferentes]

CLG .... nice stag; opened at 35c, and trading a bit below but generally above 30c.

 

[Dona Ferentes]

Close The Loop is creating soft plastic solutions that can be integrated with existing recycling infrastructure.

And, recently announced, it has beaten a pool of international competitors to win the top award at the global Packaging Innovation Awards. It won the award for a kerbside recyclable muesli pouch for Brookfarm, made from a single type of plastic. The pouch includes a sticker that enables the consumer to roll it up into a cylindrical shape and place it in their regular recycling bin.

Close the Loop Group CEO Joe Foster said this overcomes an issue for soft plastics which cannot be recognised by the machinery that sorts recyclable materials, which often mistakes them for paper.

“We’re not waiting for industry to come to us, we’re saying we’ll give you the solutions you need,” Mr Foster said. “I’ve been campaigning that we need to work together to bring these solutions to market … because the whole world has woken up to sustainability."

..............

 

[Ann]

Close the Loop Group CEO Joe Foster said this overcomes an issue for soft plastics which cannot be recognised by the machinery that sorts recyclable materials, which often mistakes them for paper.

That's a good thing Dona, I see so many recycle bins with soft plastics, not all of us trot off to the supermarket with our softs!
However, I would like to see plastic recycling being able to pick up black plastic. I get really annoyed having to throw black plastic stuff out in the rubbish just because it is black. Wish they would just stop using black plastics.

 

[Dona Ferentes]

ran up on the June Investor Day update, as high as 48c but marked down again. Now 40c. A fire on one of the production lines didn't help.

• FY22 revenue prospectus forecast up 11% to $82 million (from $73.9 million)
• FY22 EBITDA prospectus forecast up 10.5% to $13.6 million (from $12.3 million)
• Current annual revenue run rate, including recent acquisitions, equates to over $100 million
• Upgrading TonerPlas® and Close the Loop recycled product manufacturing capability
• Introduction of Resin8® waste plastics product range for the construction industry
• Expansion of South African sustainable packaging operations
• Non-binding term sheets signed for three potential acquisitions

 

[Dona Ferentes]

an overview.

ASX small caps with a strong growth trajectory: Close the Loop

Close the Loop (ASX: CLG) a global leader in the fast-growing circular economy, recovering a wide range of materials like electronics, printer cartridges, cosmetics, plastics, paper, and cartons.

www.marketindex.com.au

 

[Dona Ferentes]

financials are outperforming expectations, it would seem. In the first half of FY24, Close the Loop reported

• strong revenue growth of 76%, with
• even higher increases in gross profit (94%),
• operating earnings (139%), and
• underlying net profit before tax (204%).
• The company is also improving its balance sheet by reducing debt.

since listing

.
17 June update
Highlights:
• Geographic expansion – CLG is exploring IT refurbishment expansion opportunities in US, EU and Middle East
• Growing HP Relationship – IT refurbishment opportunities have been identified with HP Renew Solutions
• New Mexico plant – A new IT refurbishment plant in Mexicali, Mexico, will be opened and running by October 2024
• Expansion of European print consumables program – Circular Planet, the multi-vendor print consumable take back program has been expanded into Spain and Portugal and HP Inc has joined the program
• Second TonerPlas line – CLG will construct a second TonerPlas line following the awarding of $2.2m in government funding

 

[rcw1]

Good evening
SP all time low on Friday (01/11/24)

From the 2024 Annual Report:

AGM:

From FY24 Results Summary (see attached)
• Guidance achieved – Total revenue of $219m, up 59% on prior corresponding period (pcp), and EBITDA of $45m, up 85% on pcp
• Growing operating leverage – NPATA of $26m, up 87% on pcp
• Strong cash generation – Cash from operations of $32m, up 57% on pcp, with a cash conversion rate of 71%
• Funded for growth – In a strong position to pursue future growth opportunities with a cash balance of $41m, down $8m on pcp, following one-off acquisition related payments of US$5m (earnout) and investment in working capital
• North American growth and investment – Investment into new services and facilities in North America has been made to capture and accelerate growth. North America contributed 58% of revenue and 74% of EBITDA for the year
• Debt management – $4m reduction in borrowings and the Company is in discussions to restructure its debt after the release of these results with a significant expected reduction in interest rate
• Reduction in customer concentration – Customer concentration within IT refurbishment has begun to decrease post year end as the feedstock from ITAD products provides a more diverse range of Original Equipment Manufacturer (OEM) product to be refurbished
### Discrepancy in what is written in reports re revenue ... up 57% or up 59%

Daily Chart

No holding

Kind regards
rcw1

 

[Garpal Gumnut]

Good evening
SP all time low on Friday (01/11/24)

From the 2024 Annual Report:

View attachment 187269
AGM:
View attachment 187270

From FY24 Results Summary (see attached)
• Guidance achieved – Total revenue of $219m, up 59% on prior corresponding period (pcp), and EBITDA of $45m, up 85% on pcp
• Growing operating leverage – NPATA of $26m, up 87% on pcp
• Strong cash generation – Cash from operations of $32m, up 57% on pcp, with a cash conversion rate of 71%
• Funded for growth – In a strong position to pursue future growth opportunities with a cash balance of $41m, down $8m on pcp, following one-off acquisition related payments of US$5m (earnout) and investment in working capital
• North American growth and investment – Investment into new services and facilities in North America has been made to capture and accelerate growth. North America contributed 58% of revenue and 74% of EBITDA for the year
• Debt management – $4m reduction in borrowings and the Company is in discussions to restructure its debt after the release of these results with a significant expected reduction in interest rate
• Reduction in customer concentration – Customer concentration within IT refurbishment has begun to decrease post year end as the feedstock from ITAD products provides a more diverse range of Original Equipment Manufacturer (OEM) product to be refurbished
### Discrepancy in what is written in reports re revenue ... up 57% or up 59%

Daily ChartView attachment 187268

View attachment 187273

No holding

Kind regards
rcw1

Ok, I'll ask the question.

Why is this stock in a downtrend and close to all time lows?

gg

 

[Country Lad]

@Garpal Gumnut maybe a few people asked the same question on Friday and found an answer - it closed up 11.7%.
Canaccord Genuity said last June before the annual results came out that it was undervalued.

CLG also trades at a modest valuation with a forward FY25 P/E ratio of 6.2x and EV/EBITDA of 3.6x. This is significantly lower than its peers, making it an undervalued investment with potential for substantial returns, says Canaccord.
Canaccord has 65c price target on Close the Loop. CLG recycles print cartridges and innovates on sustainable packaging.

They did however make the comment:

In terms of the risks of investing in the stock, Canaccord warns that CLG could be something of a “black box”.
In Canaccord’s view, with operations in many different verticals and by virtue of the number of acquisitions CLG has made over time, the business is complex for its size.
“As a result, the market may lack early visibility should issues emerge in one or more parts of the business in the future, and this may contribute to the modest valuation metrics which the market attributes to the shares.”

Edit: the extracts are from a Stockhead article

 

[rcw1]

Cannot quite put rcw1 finger on it just yet.
Lost approx 50% plus SP year to date. The analysts have the stock as a buy.
Making coin ... although net profit down ... has debt.
Debt can be good if used wisely to grow the company.

Yes indeed it is a pickle ... rcw1 is looking at it, in its jar

@Garpal Gumnut maybe a few people asked the same question on Friday and found an answer - it closed up 11.7%.
Canaccord Genuity said last June before the annual results came out that it was undervalued.

CLG also trades at a modest valuation with a forward FY25 P/E ratio of 6.2x and EV/EBITDA of 3.6x. This is significantly lower than its peers, making it an undervalued investment with potential for substantial returns, says Canaccord.
Canaccord has 65c price target on Close the Loop. CLG recycles print cartridges and innovates on sustainable packaging.

They did however make the comment:

In terms of the risks of investing in the stock, Canaccord warns that CLG could be something of a “black box”.
In Canaccord’s view, with operations in many different verticals and by virtue of the number of acquisitions CLG has made over time, the business is complex for its size.
“As a result, the market may lack early visibility should issues emerge in one or more parts of the business in the future, and this may contribute to the modest valuation metrics which the market attributes to the shares.”

Edit: the extracts are from a Stockhead article

Ok, I'll ask the question.

Why is this stock in a downtrend and close to all time lows?

gg

Kind regards
rcw1