Propel Funeral Snaps Up New Businesses In New Zealand

  • Dec 12, 2018 AEDT
  • Team Kalkine
Propel Funeral Snaps Up New Businesses In New Zealand

On December 12, 2018, Propel Funeral Partners (ASX: PFP) announced that they signed conditional sale agreements with multiple vendors to acquire the business, assets and specific freehold properties in New Zealand associated with: Dils Funeral Services, Schnapper Rock Cremations, Rowley Funeral Services, and Martin Williams Funeral Directions.

Propel Funeral Partners (ASX: PFP) is in death care services. The company was started in 2012 and listed in 2017. They possess funeral homes, cemeteries, crematoria, and related assets in Australia and New Zealand. 

These businesses generated approx. NZ$7.2 million of revenue in the last financial year and conduct approx. 800 funerals per annum. As part of the deal, Propel will acquire three freehold properties which include:

  • First, a full funeral service facility a circa of 14,600sqm in the North Shore of Auckland which consist of a chapel with a seating up to 200 people, an adjacent reception and refreshment lounge, three private viewing areas, two garden courtyards, a cremation facility, car parking, administrative offices and a circa of 6,600sqm parcel of vacant land.
  • A circa of 650sqm converted dwelling in Devonport, it includes a mortuary and a small chapel.
  • A circa of 440sqm funeral home in Birkenhead, it consists of a chapel, office and viewing room.

Propel is also planning to lease an office at Mangere Lawn Cementery in Auckland, from a third-party landlord. The total price payable for the deal on completion of the transactions will contain: approx. NZ$17.1 million in cash and 1,210,589 ordinary shares in the capital of propel to be issued at A$2.64 each which will be subject to arrangements for up to 3 years.

Also, there are certain financial milestones if those are achieved during the 3 years following completion of the relevant transactions then an amount of up to NZ$1.25 million in cash will be paid.

As stated by Propel Managing Director Albin Kurti, New Zealand will be a core market for Propel. These acquisitions will expand their footprint in metropolitan Auckland, especially on the North Shore where there is no presence of them, and it is expected that Propel’s annual revenue will increase by approx. 7%.

FY18 Financial performance: Propel’s revenue was up 76% to $80.9 million, on the back of a 67% increase in funeral volumes and a 5.5% increase in ARPF (Average Revenue Per Funeral). Operating EBITDA was up 75% to $21.5 million, and Operating NPAT more than doubled to $12.3 million, Cash conversion remained strong at 97%. In Q1, revenue was approx. $24 million, up 20% on the corresponding prior period, the Operating EBITDA margin remained above 26%. Cash conversion remained strong and observable market share was stable.

For FY19 outlook, death volumes of the first half of FY19 will be down. However, the company is expecting a reversal in the second half of FY19 based on historical data. Although there is no certainty about it, historical information shows a quick rebound in volumes in the second half of FY19.

In the last six months, the price of the company has shown a negative return of 18.77 percent as on 11 December 2018 and 4.56 percent down over the past one month. Propel Funeral Partners Limited’s shares are trading at $2.520 with a market capitalization of $246.39 million as on 12 December 2018.


Disclaimer

This website is a service of Kalkine Media Pty. Ltd. A.C.N. 629 651 672. The website has been prepared for informational purposes only and is not intended to be used as a complete source of information on any particular company. Kalkine Media does not in any way endorse or recommend individuals, products or services that may be discussed on this site. Our publications are NOT a solicitation or recommendation to buy, sell or hold. We are neither licensed nor qualified to provide investment advice.

 

All pictures are copyright to their respective owner(s).Kalkinemedia.com does not claim ownership of any of the pictures displayed on this website unless stated otherwise. Some of the images used on this website are taken from the web and are believed to be in public domain. We have used reasonable efforts to accredit the source (public domain/CC0 status) to where it was found and indicated it below the image.

 

There is no investor left unperturbed with the ongoing trade conflicts between US-China and the devastating bushfire in Australia.

Are you wondering if the year 2020 might not have taken the right start? Dividend stocks could be the answer to that question.

As interest rates in Australia are already at record low levels, find out which dividend stocks are viewed as the most attractive investment opportunity in the current scenario in our report.

CLICK HERE FOR YOUR FREE REPORT!
   
x
We use cookies to ensure that we give you the best experience on our website. If you continue to use this site we will assume that you are happy with it. OK