Close the Loop Limited reported a return to profitability in the financial year ended June 30, 2026, driven by margin expansion and debt reduction as part of its restructuring program.
The Australian recycling and packaging company posted net profit after tax of A$1.4 million for FY26, reversing a A$5.4 million loss in the prior year. Continuing operations achieved breakeven at A$31,000, compared with a A$10.8 million loss in FY25. Total revenue from continuing operations rose 5.9% to A$125.6 million, with the packaging division growing 15.6% on higher volumes in South Africa.
Gross margin expanded by 5.7 percentage points to 36.8%, while EBITDA increased 34.2% to A$12.4 million. EBITDA margin improved to 9.9% from 7.8%, supported by lower employee benefits and reduced selling expenses. Net debt fell by A$15.3 million, or 28.7%, to A$38.1 million during FY26 and was further reduced to approximately A$18.3 million after year-end.
Borrowings declined by A$31.4 million to A$54.0 million following the sale of ISP Tek Services to Ivy Technology Holdings for US$10 million. Two ISP convertible notes totaling A$24.4 million were settled post-year-end through the issuance of 60.4 million shares and a US$2.5 million payment. The refinancing is expected to generate annual interest savings of A$1.0 million to A$1.1 million from FY27.
Chief Executive Kesh Nair described the turnaround as a platform for FY27 growth, highlighting the packaging division as the primary driver. Chief Financial Officer Marc Lichtenstein noted net debt had declined from A$53 million to A$38 million in FY26 and was further reduced to A$18 million after year-end. The company reaffirmed FY27 EBITDA guidance of A$14 million to A$16 million, implying growth of 13% to 30% from the FY26 base.
