20 May, 2022
The Insider: Meet the Fund Manager sessions are a great way to hear directly from leading fund managers. They share their approach to investing, favourite companies and their market view for the year ahead.
BlackRock partner Ellen MacArthur Foundation refers to the circular economy as a solution to climate change, biodiversity loss, waste and pollution – issues governments and corporations are keen to correct, according to Altor Capital CIO Benjamin Harrison.
During a Reach Markets The Insider: Meet the Fund Manager session in May, Mr Harrison highlighted three of his favourite investment themes, one of which revolved around the circular economy, decarbonisation and the environmental sector.
“There is a big drive for decarbonisation, so that is a huge driver for the industry and the companies that participate in it,” he said.
The Altor Capital founder elaborated further, naming two companies he thought were “quality players” within the sector, which McKinsey estimates to be worth $21 trillion through 2050.
(Watch the full The Insider: Meet the Fund Manager session.)
One of those companies was Close the Loop (ASX: CLG), which operates in the plastic packaging, processing and recycling space with the backing of what Mr Harrison deems is a strong board and management as well as significant industry growth drivers.
“The key strategic growth drivers lie in the global collection infrastructure, which will help extend its offering to multiple verticals, including e-waste, batteries, cosmetics, power tools and other plastic items,” Mr Harrison said.
Across FY22, the company built itself into a group of 10 divisions, claiming to be the only ASX-listed offering focused on cross-selling opportunities around the circular economy and sustainability.
[Close the Loop] is ideally placed to execute on growth strategies and acquisitions that they’ve made since listing in December (2021),” Mr Harrison said.
The company’s acquisitions included Ocean Agencies (a commercial seafood packaging and transport company), Crasti & Company (an industrial size and strength bulk bags and packaging business) and Alliance Paper (a leading supplier of paper-based products and rolls to major Australian retailers).
The gamble appears to have paid off for Close the Loop as the company wrapped up FY22 with $89.2 million in revenue (20.7% above forecast), $14.3 million EBITDA (16.3% above forecast) and $7 million NPBT (17.2% above forecast) while sitting on $10.3 million in cash.
On the boards, the company closed its first day at $0.30 and climbed to a high of $0.48 at the start of June before rounding up the financial year at $0.405.
Follow-through into FY23
In the first quarter of FY23, Close the Loop announced “better than expected” business performance and the acquisition of The Pouch Shop – the largest stockist of off-the-shelf readymade food packaging pouches in Southern Africa.
In the same quarter, Close the Loop commenced a ‘take back’ trial with Hewlett Packard (HP) Indigo, a company that develops, manufactures and markets digital printing solutions, including printing presses, proprietary consumables/supplies and workflow solutions.
The trial aims to leverage Close the Loop’s supply chain knowledge in reverse logistics to collect products from HP channel partners in China and ship them to Israel for remanufacturing – in line with the company’s expertise, among others, in refurbishing print toner cartridges.
Click here to view more videos from Benjamin Harrison’s Meet the Fund Manager session.
Reach does not assume responsibility for the accuracy or completeness of any information provided, and the views expressed are not reflective of Reach Markets’ position. Any advice contained within this presentation is general advice and does not consider your personal circumstances, you should consider whether it is appropriate for you.
The information we are giving you is for educational purposes only. “Investing is about understanding your risk” and every time you invest in the share market there is a risk of loss.
Past performance is not a reliable indicator of future performance.
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Past performance is not a reliable indicator of future performance.
The CEOs of all the companies chosen as Fund Manager favourite stocks are invited to present at our Meet the CEO series. Reach does not assume responsibility for the accuracy or completeness of any information provided, and the views expressed are not reflective of Reach Markets position.
Any advice contained within this presentation is general advice and does not consider your personal circumstance, you should consider whether it’s appropriate for you.
The information we are giving you is for educational purposes only. “Investing is about understanding your risk” and every time you invest in the share market there is a risk of loss.