Fund Manager Summary
The fund managers believe that the outlook for Close The Loop Ltd presents a significant opportunity in the circular economy. In their opinion, FY23 was a transformational year for the company, highlighted by the acquisition of ISP Tek Services and Captive Trade Corp (CTC), which enhances its electronics refurbishment capabilities. The acquisition, made at a favorable PE multiple of ~4.8, is expected to be 100% accretive on an EPS basis. Although only consolidated for two months, CTC contributed a net profit of $5.4m, representing a 32% growth compared to the previous year. The fund managers are impressed with the group’s full-year results, which have surpassed market consensus estimates, reinforcing their commitment to this core investment.
Source: Trading View
Commentary From The Managers
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Salter Brothers
28 Aug 2025
$0.03
Summary
- Close the Loop Ltd (CLG) was a key detractor for the portfolio in FY25.
- The company focuses on collecting and refurbishing products and providing sustainable packaging solutions.
- Challenges included the termination of takeover discussions with Adamantem and a weaker than expected 1H25 trading update.
- As a result, the share price experienced a significant pullback.
- While revenue remained stable compared to the prior period, EBITDA fell by 46% to $12.2 million due to a shift in business mix and delays in the Mexicali facility approval.
- Despite these setbacks, Salter Brothers notes several encouraging developments:
- The Mexicali site is now fully operational.
- New CEO appointments have been made for the North American ITAD division and Australia.
- FY26 is expected to benefit from new project wins and an improved earnings trajectory.
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Please note: The completeness, accuracy or current status of the investments referenced are not guaranteed.
Commentary From The Managers
Salter Brothers
28 Aug 2025
$0.03
- Close the Loop Ltd (CLG) was a key detractor for the portfolio in FY25.
- The company focuses on collecting and refurbishing products and providing sustainable packaging solutions.
- Challenges included the termination of takeover discussions with Adamantem and a weaker than expected 1H25 trading update.
- As a result, the share price experienced a significant pullback.
- While revenue remained stable compared to the prior period, EBITDA fell by 46% to $12.2 million due to a shift in business mix and delays in the Mexicali facility approval.
- Despite these setbacks, Salter Brothers notes several encouraging developments:
- The Mexicali site is now fully operational.
- New CEO appointments have been made for the North American ITAD division and Australia.
- FY26 is expected to benefit from new project wins and an improved earnings trajectory.
Summary
Salter Brothers
28 Feb 2025
$0.10
- Close The Loop LTD (ASX:CLG) results were underwhelming but aligned with the January trading update.
- Decline in EBITDA due to an unfavourable product mix in the resource recovery segment.
- Delays in opening the Mexicali facility impacted performance.
- The investment team visited Close The Loop’s North American sites and remains comfortable with the current holding.
- Salter Brothers believes appropriate execution can return the business to FY24 earnings levels and beyond.
Summary
Salter Brothers
31 Jan 2025
$0.12
- Close the Loop Group (CLG) faced a disappointing downgrade in January.
- Discussions with Adamantem regarding a cash offer ceased.
- Adamantem's offer was a non-binding indicative cash offer of $0.27 for 100% of CLG shares.
- CLG issued a negative trading update, reducing earnings expectations for 1H FY2025.
- The downgrade was due to an unfavorable shift in business mix and delays in opening its Mexicali facility.
- Despite these challenges, the company anticipates resolution in the coming months.
- Salter Brothers remains in contact with the company, monitoring the position closely.
Summary
Wilson Asset Management
31 Dec 2024
$0.24
- Close the Loop is a global circular economy provider focusing on recycling, resource recovery, and sustainable product development.
- Wilson Asset Management notes that the exclusivity period with Adamantem Capital for due diligence and negotiations has been extended to 20 January 2025.
- Following the initial announcement, Close the Loop's share price increased by 19%, indicating market optimism regarding the acquisition.
- Adamantem Capital's proposal includes acquiring Close the Loop at $0.27 per share, which is a 49% premium over the 30-day VWAP on 15 November 2024.
- While the takeover proposal has positively impacted the share price, the final outcome will depend on the successful completion of the acquisition and the terms of the binding agreement.
Summary
Salter Brothers
31 Oct 2024
$0.17
- Close The Loop Ltd (CLG) share price experienced a further decline through October.
- Absence of material news flow contributed to the decline.
- An update is anticipated at the forthcoming AGM.
- Management is expected to address key business cash conversion metrics.
- Following a recent meeting with the company’s management, Salter Brothers remains confident in their investment size.
- Further detailed metrics are awaited before adjustments to the investment thesis are considered.
Summary
Salter Brothers
31 Aug 2024
$0.22
- Close The Loop Ltd (CLG) experienced an underwhelming FY24 result, particularly concerning cash flow conversion of earnings.
- Despite meeting target revenue and EBITDA, a significant rise in working capital and increased net debt raised market concerns.
- Salter Brothers conducted multiple meetings with management and performed an in-depth review of the position.
- The company is currently trading at approximately 4x EBITDA and 9x P/E, presenting an intriguing risk vs reward dynamic if cash conversion improves.
- Strategically positioned in the circular economy, particularly in IT refurbishment services, which lays a solid foundation for future growth and long-term value creation.
Summary
Salter Brothers
31 July 2024
$0.31
- Salter Brothers acknowledges challenges for Close the Loop (CLG) despite positive developments.
- The company is expanding geographically with a new plant in Mexico.
- Strengthening relationships with HP Inc. enhances operational capabilities.
- The Circular Planet initiative is growing, adding HP Inc. and expanding into Europe.
- Salter Brothers believes CLG is undervalued and expects a turnaround in share price.
- Recent expansions and partnerships are seen as pivotal steps for future growth and value creation.
Summary
Salter Brothers
31 Mar 2024
$0.32
- Close the Loop Ltd (CLG) witnessed a share price decline in March despite a strong result in February.
- A significant achievement was the strong performance of its ISP Tek Services acquisition, which delivered revenue growth and EBITDA ahead of expectations.
- Challenges arose in CLG’s packaging division, which faced revenue performance below expectations due to shipping delays.
- Despite this, CLG’s revenue of $106.2 million is on track to exceed FY24 guidance of $200 million.
- Salter Brothers is satisfied with the 1H24 results and continues to hold due to confidence in CLG’s outlook.
Summary
Salter Brothers
28 Feb 2024
$0.34
- Close The Loop Ltd (CLG) released its 1H24 results with an upgraded earnings guidance
- Management commentary on the ISP Tek acquisition indicated performance was better than expected, validating the investment thesis at the time of acquisition
- CLG is undervalued, trading at approximately 5x EBITDA multiple, which is discounted compared to its listed peers
- Salter Brothers' conviction remains strong, continuing to top up the position at these levels
Summary
Cerutty Macro Fund
30 Nov 2023
$0.34
- Cerutty Macro Fund continues to hold Close the Loop Ltd (CLG) as it has been a staple in the portfolio since inception.
- Recent significant updates have reaffirmed positive views on management and built momentum for FY24.
- CLG operates in the ‘circular economy’, focusing on recovery, refurbishment, and reuse.
- The company collects from 260k sites globally and remanufactures 500k electronic consumables per year.
- The acquisition of ISP Tek Services, a U.S.-based electronics refurbishment business, enhances CLG's operations.
- On a pro-forma basis, the combined business is expected to generate $200m revenue and $43m EBITDA with conservative growth assumptions.
- The current market valuation prices CLG at a ~5x EV/EBITDA multiple and 8.5x NPATA.
- In early 2023, ISP Tek Services contributed to a ~35% NPAT growth compared to the prior corresponding period.
- Management expressed confidence in achieving greater than $43m EBITDA guidance for FY24.
- Recent contract renegotiation with HP converted to an exclusive 3-year agreement, reducing key client risk.
- Future growth prospects include expanded volumes with additional OEMs, replicating the business in Europe, and warranty product refurbishment.
Summary
Cerutty Macro Fund
31 Aug 2023
$0.45
- Cerutty Macro Fund has maintained a core position in Close The Loop Ltd since the fund's inception.
- Close The Loop focuses on a circular economy, specializing in collection, recycling, and resource recovery.
- FY23 was transformational for Close The Loop, acquiring ISP Tek Services and Captive Trade Corp (CTC).
- CTC is an electronics refurbish and trading platform based in Texas, USA.
- The acquisition occurred at a favourable run-rate ~4.8 PE multiple and was 100% accretive on an EPS basis.
- Despite only consolidating for 2 months, CTC contributed a net profit of $5.4m, showing 32% growth year-on-year.
- The fund was impressed by Close The Loop’s full year results, which exceeded both the fund's and market expectations.
Summary
Please note: The completeness, accuracy or current status of the investments referenced are not guaranteed.
ANALYST INSIGHT
Equity Research Analyst
"With transformative acquisitions under its belt, Close The Loop seems poised to disrupt the recycling landscape. The impressive EPS growth hints at a strong future, making it a compelling play in the circular economy narrative."
Last Updated: 28 Aug 2025
Query The Data
Frequently Asked Questions
Who is investing in Close The Loop Ltd (ASX:CLG)?
Fund managers including Cerutty Macro Fund, Salter Brothers and Wilson Asset Management have invested in Close The Loop Ltd (ASX:CLG).
Why do fund managers invest in Close The Loop Ltd?
Fund managers have invested in Close The Loop Ltd due to its strong positioning in the circular economy, marked by its recent acquisitions of ISP Tek Services and Captive Trade Corp. These acquisitions, made at favorable terms, are expected to significantly enhance earnings, evidenced by a 32% profit growth compared to the previous year. The company’s full-year results exceeded market expectations, reinforcing its potential for sustainable growth.
What happened to Close The Loop Ltd (ASX:CLG)?
Fund managers are investing in Close The Loop Ltd due to its potential for recovery despite recent challenges. The company, which specializes in sustainable packaging and refurbishment, faced a setback in FY25 with a significant drop in EBITDA and a weaker trading update. However, the recent operational launch of the Mexicali facility and new leadership appointments are expected to drive growth in FY26. These developments suggest a positive outlook, making it a strategic investment opportunity.