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

27/08/2024

1

Buy

$0.70

258.97%

Shaw and Partners pushes back against the -25% decline in the Close the Loop share price post the FY24 results announcement which revealed lower-than-expected earnings and higher debt.

Packaging business was the earnings drag in FY24 not the resource recovery business.

The analyst acknowledges the treatment of the earn-out to the former owners of ISP Tek was a major factor for the earnings miss. Post this one-off the broker's cashflow estimate for FY24 was "close".

In FY25 free cashflow should bring down the $28m debt, by $14m. The company has $41m cash on the balance sheet.

Target price of 70c and Buy rating (High risk) unchanged.

FORECAST
Shaw and Partners forecasts a full year FY25 dividend of 0.00 cents and EPS of 5.30 cents.
Shaw and Partners forecasts a full year FY26 dividend of 0.00 cents and EPS of 5.90 cents.

04/09/2024

1

Buy

$0.53

171.79%

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.