Leadership Changes and Debt Focus Pose Challenges for Close the Loop
Close the Loop Limited reports stronger Q1 FY26 revenue and EBITDA, boosted by strategic asset sales and operational improvements, while navigating key board and CFO departures.
- Q1 FY26 revenue and EBITDA growth in Resource Recovery and Packaging
- Divestment of Alliance Paper and O F Flexo completed to focus on core businesses
- New product lines and cost rationalisation underpin improved margins
- Non-Executive Director Joe Foster retires; CFO Chris Dimitriadis to step down
- Board prioritises debt reduction alongside operational improvements
Strong Start to FY26
Close the Loop Limited (ASX – CLG), a leader in the circular economy sector, has kicked off the 2026 financial year with a promising trading update. The company reported higher revenue and earnings before interest, tax, depreciation and amortisation (EBITDA) in both its Resource Recovery and Packaging divisions for the first quarter ending 30 September 2025. This improvement reflects a combination of new product introductions, streamlined headcount, and tighter cost controls.
Resource Recovery, which includes the IT asset disposition (ITAD) segment, showed a notable turnaround with increased volumes and better margins. The company’s partnership with a key original equipment manufacturer (OEM) helped accelerate volume growth, while enhanced inventory and channel management contributed to improved profitability.
Strategic Restructuring and Asset Sales
Close the Loop has been actively reshaping its portfolio to sharpen its focus on core operations. The divestments of Alliance Paper, a thermal paper business, and O F Flexo, a Melbourne-based flexible packaging manufacturer, were completed during the quarter. These moves are part of a broader restructuring program aimed at concentrating resources where they can generate the most value.
The Packaging division also delivered solid results, supported by stronger performances in Australia and South Africa. The exit from loss-making operations has further strengthened this segment’s financial health, positioning it well for continued growth throughout FY26.
Leadership Transitions and Future Focus
The company announced significant leadership changes alongside its operational updates. Joe Foster, a founding member and inaugural CEO, retired from the board at the AGM, marking the end of an era for Close the Loop. Meanwhile, CFO Chris Dimitriadis will step down in December 2025, with the company actively recruiting to bolster its finance leadership.
Chairman Grant Carman expressed confidence in the new management team’s ability to sustain momentum. The board is also prioritising debt reduction as a key strategic objective, signalling a disciplined approach to financial management amid ongoing operational improvements.
Looking Ahead
With a clear strategic direction and a streamlined business model, Close the Loop appears well positioned to deliver continued operational and financial gains. The company’s focus on expanding ITAD volumes, maintaining packaging strength, and driving cost efficiencies will be critical to sustaining this positive trajectory.
Bottom Line?
Close the Loop’s early FY26 gains set the stage, but leadership changes and debt priorities will test its resilience.
Questions in the middle?
- How will the company’s debt reduction strategy impact future investment and growth?
- Who will fill the CFO role, and what changes might new financial leadership bring?
- Can Close the Loop sustain ITAD volume growth amid evolving market dynamics?
