Propel Funeral Partners Limited (ASX: PFP) provides services into funeral segment. The company for the six months ended 31 December 2018 reported a revenue hike of 20.9% from $38,942,000 in the first half of FY18 to $47,095,000 in the first half of FY19. This growth was due to a 15.0% hike in revenues from its funeral activity as well as income from the cemetery business. Besides this, crematoria and memorial gardens business doubled to come in at $5.17 Mn. This growth was predominantly credited to the purchase of Norwood Park Limited.
Average Revenue Per Funeral (ARPF) rose by 220 Bps, from $5,427 in the first half of Financial Year 2018 to $5,549 in the first half of Financial Year 2019. Over the years, the company has acquired and established death care assets, such as funeral homes, cemeteries and crematoria, and related properties and infrastructure which reinforced its growth momentum.
Operating Earnings Before Interest Tax Depreciation & Amortisation rose 6.4% from $10,961,000 in the first half of FY18 to $11,658,000 in first half of FY19. This rise in Earnings Before Interest Tax Depreciation & Amortisation on the back of full period contribution impact of acquisitions completed in Financial Year 2018 and the part period impact of acquisitions completed in 1H Financial Year 2019.
The 1H FY19 Operating Earnings Before Interest Tax Depreciation & Amortisation margin was 1.8% lower than FY18. The main cause behind this was the slumping death rates and the mix of freehold and leasehold properties. These factors led to a hike in occupancy costs.
The Board has announced that the shareholders shall be rewarded with a fully franked interim dividend of 5.7 cents per share. The dividend shall be distributed & credited to the beneficiary accounts on the 5th of April 2019, with a record date of 5 March 2019.
As regards the outlook, the management believes that the company is well positioned to gain the needed positive momentum from recently completed and announced acquisitions. The company has a strong and conservative balance sheet, also the company expects a recovery in death volumes going forward.
On the stock performance front, the company has posted the year-till-date return of 21.76%. The company also posted returns of 4.45%, 18.22% & 5.90% over the past six months, three months & one-month period respectively. At the time of writing (08 March 2019), the stock of the company is trading at a price of A$3.05, with a market capitalization of ~A$ 299.4m. The stock opened the day at A$ 3.040, reached the day’s high of A$ 3.060 and touched the day’s low of A$ 3.040, with an average daily volume of ~ 110,347. It had a 52-week high price of $ 3.260 and a 52 weeks low price of $ 2.420, with an average volume of 75,667 approximately.
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