PFP - Propel Funeral Partners

[System]

Propel was established in FY2012. It is now the second largest private provider of death care services in Australia and New Zealand. Propel's property portfolio currently comprises 80 locations (46 freehold and 34 leasehold) in Australia and New Zealand, including 19 crematoria and 5 cemeteries.

Propel has a strong presence in regional areas of New South Wales, Victoria, Queensland, Tasmania, South Australia and New Zealand and an emerging metropolitan presence. Propel operates under a multi-brand strategy. Its location footprint is difficult to replicate given the majority of its funeral homes have been operating for many decades.

It is anticipated that PFP will list on the ASX during November 2017.

http://propelfuneralpartners.com.au

 

[JTLP]

If this is anything like IVC, I’ll buy in for the long term. 2 certainties in life, and this is one of them.

 

[Ann]

If this is anything like IVC, I’ll buy in for the long term. 2 certainties in life, and this is one of them.

Wise move I feel. Stuck it on my watch list.

 

[sptrawler]

Should have a pick up in business, as with IVC, if the corona virus becomes rampant.

 

[Dona Ferentes]

Should have a pick up in business, as with IVC, if the corona virus becomes rampant.

Naw, just like Afterpay, merely bringing forward 'consumption'.

(But both IVC & PFP best performing stocks today when market down 3%

 

[Dona Ferentes]

PFP hasn't been shown to be immune to the sell-off (in red, plotted against XJO)

 

[peter2]

We haven't discussed PFP since the COVID selloff. Pretty much all we posted in the IVC thread applies to PFP. (Flu deaths dropped 99%)
The daily traded volume is much lower than IVC and the price is a little jerky at times. This means it's tricky for short term traders.

Price has recently broken above the resistance at 2.90. This probably due to the easing of COVID restrictions.
NSW is allowed up to 100 people, Vic up to 20 soon (Nov 1st).

PFP shares were in demand and making new yearly highs before the COVID selloff. That would indicate good demand from the insto's at that time. How things have changed. Once death ends it's holiday and Vic gets back to the new Covid normal PFP's business will recover.

ps: Two things we can't avoid, death and taxes. I've loved the movie, Meet Joe Black.

 

[peter2]

I'm sticking with this macabre investing theme. Notes from the PFP AGM 2020.

 

[Dona Ferentes]

As the biggest operator in the industry, InvoCare enjoys considerable bargaining power when it comes to sourcing coffins, cars, flowers, and the other components that typically make up funeral services.

This has allowed the company to operate at a higher profit margin than its next biggest competitor, Propel Funeral Partners Ltd.

Propel is aiming to increase its market share through acquisitions, thus potentially presenting InvoCare with increased competition.

In November, Propel announced it had completed the acquisition of The Dills Group and MidWest Funerals, which will add around 800 funerals a year to its revenue stream

 

[peter2]

I didn't realise that Propel was being administered by an external Manager. The Manager gets quite a slice of the action. This arrangement is coming to an end and it seems that Propel is being rerated very favourably.

 

[divs4ever]

Trading Update – Q1 FY23

Propel Funeral Partners Limited (ASX: PFP) (Propel or Company) announces that its operating and financial performance for the three months ended 30 September 20221 was materially above the prior corresponding period (PCP), reflecting strong seasonal trading conditions and organic growth, combined with contributions from acquisitions.
In Q1 FY23 1 , Propel:
– generated revenue of ~$44 million, up ~33% on the PCP;
– achieved Operating EBITDA2 of ~$13 million, up ~40% on the PCP and reflecting a margin of ~30% (PCP: ~28%);
– maintained strong Cash Flow Conversion2 ;
– performed a record number of funerals in a quarter, up ~23% on the PCP, including material growth in comparable funeral volumes on the PCP; and
– experienced a higher mix of full service funerals compared to the lockdown impacted PCP and FY22, which contributed to Average Revenue Per Funeral2 growth of:
• ~9% on the PCP; and
• ~6% on FY22. The Company’s Q1 FY23 trading:
– included full period contributions from six acquisitions completed during FY22; and
– did not include contributions from two new acquisitions announced3 in Q1 FY23, which are expected to complete during Q2 FY23.
Death volumes can fluctuate over short time horizons, so caution is required when extrapolating historical data to forecast potential future performance.

ENDS

i hold PFP ( bought in December 2020 @ $3.00 )

 

[divs4ever]

Response to Media Speculation

Propel Funeral Partners Limited (ASX: PFP) (Propel or Company) refers to recent media speculation regarding possible corporate activity involving the Company.
Propel confirms that it has received inbound interest regarding a potential change of control transaction from multiple parties.

The nature of this interest has been unsolicited, preliminary, highly conditional and non-binding.
The Board is committed to acting in the best interests of the Company and its shareholders and to ensuring that a transaction (if any) occurs on a basis that is compelling.
The Board has determined the interest received to date has not been compelling and has, therefore, elected not to engage with any party regarding its interest.
No action is required by shareholders at this time.
The Company has appointed Barrenjoey as financial adviser and Corrs Chambers Westgarth as legal adviser and will continue to update the market in accordance with its continuous disclosure obligations.


i hold PFP ( bought in December 2020 @ $3.00 )

 

[divs4ever]

Acquisitions and Expansion of Debt Facilities

Propel Funeral Partners Limited (ASX: PFP) (Propel or Company) is pleased to announce it has executed binding legal documentation to:
– acquire three long established funeral service businesses and related assets, infrastructure and real estate, which will expand and broaden Propel’s network into new regional markets in Australia and New Zealand;
– acquire the freehold property of a funeral home within the Company’s existing network that is currently leased; and – expand its senior debt facilities.
The total consideration payable on completion of the acquisitions is ~A$10.6 million1 .
Overview The new business acquisitions relate to:
– Norman J Penhall Funerals: which operates from one location and has been providing funeral and related services in and around Orange, New South Wales for over 40 years;
– IC Mark Funeral Directors: which operates from two locations (including a cremation facility) and has been providing funeral and related services in and around Levin, New Zealand for over 50 years; and
– Howard & Gannon Funerals: which operates from one location and has been providing funeral and related services in and around Taradale, New Zealand for over 10 years.
Together, the businesses:
– generated ~A$5 million of revenue from ~700 funerals in their last financial year; and
– operate from four locations, of which Propel will acquire three freehold properties (one of which includes a cremation facility).
Propel has also agreed to acquire the freehold property of a funeral home within its existing network, which is currently leased.
Consideration The total consideration payable on completion of the acquisitions is ~A$10.6 million1 , of which over 60% relates to the acquisition of real estate, comprising:
– A$10.5 million1 in cash; and
– A$0.1 million1 via the issue of 19,086 Propel ordinary shares2 on completion of the relevant acquisition.
In addition, up to A$1.0 million1 in cash will be payable if certain financial milestones are achieved during the five years following completion of the relevant acquisitions.
Expected Timing Subject to satisfaction (or waiver) of customary conditions (e.g. due diligence, consent to assignment of key contracts, etc.), the acquisitions are expected to be completed by 31 March 2024 and be earnings accretive in year one.
Expansion of Debt Facilities Propel and Westpac Banking Corporation have agreed to:
– expand the Company’s senior debt facilities to A$275 million (previously A$255 million), providing additional liquidity; and
– increase the net leverage ratio covenant limit to 5.0 times (previously 4.0 times), providing additional financial flexibility.
The maturity date of the debt facilities and the current pricing remain unchanged.
The cash required to complete the acquisitions will be funded from the Company’s debt facilities, following which Propel’s estimated:
– available funding capacity is expected to be ~A$90 million, noting that Propel has deployed an average of ~A$45 million per annum on acquisitions since the Company’s IPO in November 2017; and
– net leverage ratio is expected to be in the range of 2.9-3.2 times3 (versus the covenant limit of 5.0 times) as at 30 June 2024.

-END

i hold PFP ( bought in December 2020 @ $3.00 )

not so happy about increasing the debt load , but at least they bought some actual property in the deal

 

[divs4ever]

Propel Funeral Partners Limited (ASX: PFP) (Propel or Company) is pleased to announce it has executed binding legal documentation to acquire four long established businesses operating in the funeral industry and related assets, infrastructure and real estate, which will expand and broaden Propel’s network in Australia and in New Zealand.

The total consideration payable on completion of the acquisitions is ~A$12.0 million1 .

Overview

The new business acquisitions relate to:

– Brunswick Valley Funerals, which has provided funeral and related services in and around Mullumbimby, NSW for over 18 years;
– Gladstone Valley Funerals, which has provided funeral and related services in and around Gladstone, QLD for over 25 years;
– Osbornes Funeral Directors2 , which has provided funeral and related services in and around Rotorua, NZ for over 40 years; and
– Decra, which has supplied headstones and monuments in NZ for over 40 years.

Together, the businesses:
– generated ~A$6.0 million of revenue in their last financial year3 ;
– conducted ~350 funerals in their last financial year3 ; and
– operate from five locations (over multiple titles), of which Propel will:
• acquire two of the properties on settlement; and
• lease three of the properties, with options to acquire two of those properties.

Consideration

The total consideration payable on completion of the acquisitions is ~A$12.0 million1 , comprising: – A$11.5 million1 in cash; and – A$0.5 million1 via the issue of 84,534 Propel ordinary shares4 on completion of the relevant acquisition.
In addition, up to A$1.5 million1 in cash will be payable if certain financial milestones are achieved during the three years following completion of the relevant acquisitions.
The cash required to complete the acquisitions will be funded from the Company’s debt facilities, following which Propel’s estimated available funding capacity is expected to be ~A$155 million.

Expected Timing Subject to satisfaction (or waiver) of customary conditions (e.g. due diligence, third party lessor consent, consent to assignment of key contracts, etc.), the above acquisitions are expected to be:
– completed during Q4 FY24 and Q1 FY25; and
– earnings accretive in year one.

-END

i hold PFP ( bought in December 2020 @ $3.00 )