Shares of Close The Loop Inc (ASX: CLG) are surging 24% into the green on Wednesday, now trading at 46 cents.
Investors might be bidding up the Close The Loop share price amid a company announcement upgrading its FY22 forecasts.
In broad market moves, the S&P/ASX 200 Index (ASX: XJO) has climbed 9 basis points into the green in today's session.
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Close The Loop boosts guidance
The company reports that it has realised strong organic revenue growth across all divisions, notably in the United States and Europe.
According to the release, "earnings [are] significantly ahead of plan" in each of these divisions, alongside strengths in its O F Pack, O F Flexo and Foster International segments.
As such, Close The Loop has upgraded its FY22 revenue and EBITDA prospectus forecasts by 11% and 10.5%, respectively.
It now forecasts $82 million and $13.6 million in FY22 revenue and EBITDA, respectively. That's up from $74 million and $12.3 million in previous estimates.
Not only that, but the company's current annual revenue run rate now exceeds $100 million including recent acquisitions, it says.
Separately, the company notes it has signed an MOU to produce its Resin8 structural and concrete product range in Australia. The decision comes after its launch "in other parts of the world".
Speaking on the release, Close The Loop CEO Joe Foster said:
In our first six months as a listed entity Close The Loop Group has enjoyed considerable organic revenue growth across all divisions and we are increasing our FY22 revenue and EBITDA prospectus forecasts by 11% and 10.5% respectively.
This is due to our ability to successfully integrate complementary businesses that strengthen our capability as the only ASX-listed company operating in all parts of the circular economy. From product design, manufacturing, collection and recycling and then eventually recovering it as new packaging or secondary products, or simply packaging to packaging. When you take our acquisitions of Crasti & Co and Oceanic Agencies into account, we now have annualised revenue of around $100 million.
What's next for Close The Loop?
The company is now looking to venture into the South African market via its sustainable packaging business. It is currently examining three possible "complementary acquisitions".
Foster added:
While FY22 is shaping up to be a great year for the company, Close The Loop Group is also ensuring that upgrading its ability to scale as demand for recycled products generated through the circular economy increases. These initiatives include production capacity increases, efficiency improvements, new product ranges as well as examining strategic acquisition opportunities.
Close The Loop Group will host its inaugural investor day tomorrow (2 June) at its facilities in Somerton, Victoria.
The Close The Loop share price has gained 50% after listing in December 2021. It is now up more than 40% for the past month of trade.
