Close the Loop’s FY25 results underline how shifts in the cartridge recycling market and IT asset disposition (ITAD) mix cut earnings, with new plant investment expected to restore growth.
Close the Loop (CLG) reported FY25 revenue of AUD $195.1 million ($128m/ €118m), down 6.7% on last year, with net profit after tax slipping to a loss of AUD $16.5 million ($10.8m/ €10m) from an AUD $11.4 million profit in FY24. Gross profit fell 26% to AUD $58.3 million ($38.3m/ €35.2m), while adjusted EBITDA dropped 59% to AUD $18.4 million ($12.1m/ €11.1m).
The company blamed an unfavourable shift in IT asset disposal (ITAD) product mix, combined with start-up costs at new facilities in Kentucky and Mexicali, as key drivers behind the margin squeeze.
Printer cartridge collection remains a cornerstone of Close the Loop’s business. The group operates a network of 260,000 collection points across the US, Europe and Australia, processing around 50 million cartridges per year. OEM contracts typically operate on a fixed fee per cartridge, supplemented by managed services, while returned printers and hardware are refurbished and resold through established channels.
The company said that, globally, 1.3 billion inkjet cartridges are sold each year, but only 15–20% are recycled. This gap leaves significant scope for expansion. In FY25, however, lower volumes of higher-value devices and weaker 30-day customer returns depressed earnings.
One-off costs also hit the bottom line, including the shutdown of O F Resource Recovery and start-up expenditure at the new Mexicali ITAD facility.
Cash on hand fell to AUD $32.3 million ($21.2m/ €19.5m), while net debt rose to AUD $53.5 million ($35.2m/ €32.3m), partly due to weaker operating cashflow. Net assets declined 14% to AUD $121.5 million ($79.9m/€73.4m).
Operating cashflow was AUD $4.8 million ($3.2m/ €2.9m), down 78% year-on-year. Capital expenditure of AUD $3.3 million ($2.2m/ €2m) focused on bringing Mexicali online.
The company confirmed that bank covenants were breached during the year but were compliant at 30 June, with its core facility in place until 2029.
Management expects new OEM ITAD programmes to support volume growth in FY26, with the Mexicali plant now approved to recycle cartridges and computer hardware under the IMMEX scheme. This Mexican government programme allows companies to import used goods duty-free for refurbishment or recycling, provided the outputs are exported again, lowering costs and improving efficiency.
Volumes are forecast to increase through FY26 as more business shifts from North America to Mexicali, where refurbishment and recycling lines are now established.
Close the Loop said it will also prioritise expanding OEM relationships globally, cross-selling packaging and ITAD services, and improving cash conversion to reduce debt.
Executive Director and CEO Australia Kesh Nair noted: “Our focus is on organic growth. With the Mexicali plant ramping up and new OEM programs coming on stream, we see opportunities to build volumes and strengthen margins in FY26.”
For the cartridge sector, the results show how sensitive profitability remains to product mix and returns — and how investment in end-to-end reverse logistics is becoming critical to long-term recovery rates.
