CLOSE THE LOOP LIMITED (CLG)
Share Price Analysis and Chart

20/11/2024

3

Downgrade to Hold High Risk from Buy High isk

$0.60

179.07%

Close the Loop has received an indicative, non-binding proposal from private equity funds manager Adamantem Capital to acquire 100% of the company for 27cps via a Scheme of Arrangement.

While Close the Loop's directors support the proposal and have allowed Adamantem to proceed with due diligence, Shaw and Partners notes the offer is significantly below its unchanged 60cps valuation/target.

The broker downgrades its rating to Hold, High Risk from Buy, High Risk.

At the AGM tomorrow, the analyst anticipates a trading update indicating flat earnings (EBITDA) and potential debt reduction of -$1-2m for 1H FY25.

FORECAST
Shaw and Partners forecasts a full year FY25 dividend of 0.00 cents and EPS of 4.80 cents.
Shaw and Partners forecasts a full year FY26 dividend of 0.00 cents and EPS of 5.10 cents.

04/09/2024

1

Buy

$0.53

146.51%

Close the Loop posted revenue and earnings that were in line with expectations and guidance. Canaccord Genuity suspects that net debt, which increased by $16m in the June half year, was the main driver of the drop in the share price.

The broker believes the business should be able to convert closer to 90% of EBITDA into cash noting the shares continue to trade at very low multiples.

Buy rating is retained as the current valuation appears to compensate investors for the risk in the business. Target is reduced to $0.53 from $0.65.

FORECAST
Canaccord Genuity forecasts a full year FY25 dividend of 0.00 cents and EPS of 5.10 cents.
Canaccord Genuity forecasts a full year FY26 EPS of 6.10 cents.