Search by ticker code:
Generic filters

Search by ticker code:
Generic filters

Search by ticker code:
Generic filters

Propel (ASX:PFP) share price jumps on acquisitions

The Propel Funeral Partners Ltd (ASX: PFP) share price is up around 5% after announcing acquisitions and a trading update.

Propel is one of the largest funeral operators in Australia and New Zealand. The major competition is InvoCare Limited (ASX: IVC).

The latest acquisitions

Propel announced it was entering Adelaide and expanding in Auckland after making acquisitions.

It is making three purchases for a total cost of up to $17.6 million. That includes $15.2 million of cash to be paid on completion.

The Adelaide exposure represents a new metropolitan area.

The first acquisition is Berry Funeral Directors, which is a fourth generation family business located in Norwood which has been supporting Adelaide families with personal, professional funeral services since 1934.

Next is Glenelg Funerals. This is a family owned business in Glenelg which has been providing funeral services for over 25 years.

Finally, there is a business called State of Grace. This is a funeral services provider which has a focus on enabling families to personally care and make specific home-based funeral arrangements for their loved ones. It operates from two locations in Auckland.

Together, those acquisitions perform around 1,200 funerals per annum. They generated revenue of approximately $9 million in the most recent financial year.

Of the five locations these businesses operate from, four are leased and Propel will be buying one freehold property which includes two chapels, a mortuary, commercial kitchen and so on. That freehold property has approximately 3,850 sqm of land in Norwood, South Australia.

Propel said that it would be essentially funding this from its expanded and extended debt facilities with Westpac Banking Corp (ASX: WBC).

Trading update and outlook

Another factor that may be influencing the Propel share price is the trading update that the company gave.

It said that death volumes are expected to revert to long-term trends after a benign period during 2020 and 2021 so far.

Propel revealed it has started FY22 with higher funeral volumes. In July 2021, it performed a record number of funerals, with total and comparable funeral volumes materially higher than the prior corresponding period. But it noted that death volumes can fluctuate over short-term horizons.

Aside from death volumes returning, Propel also pointed to acquisitions completed, announced and potential future acquisitions as drivers for growth in FY22.

The Propel share price has risen 44% over the last year – the market has noted the recovery and expected growth from here.

There are strong long-term tailwinds for the funeral industry, though I’d be cautious about buying a lot of shares at this stage, with Propel shares at an all-time high. It’s not a bad option among the ASX dividend shares though.

$50,000 per year in passive income from shares? Yes, please!

With interest rates UP, now could be one of the best times to start earning passive income from a portfolio. Imagine earning 4%, 5% — or more — in dividend passive income from the best shares, LICs, or ETFs… it’s like magic.

So how do the best investors do it?

Chief Investment Officer Owen Rask has just released his brand new passive income report. Owen has outlined 10 of his favourite ETFs and shares to watch, his rules for passive income investing, why he would buy ETFs before LICs and more.

You can INSTANTLY access Owen’s report for FREE by CLICKING HERE NOW and creating a 100% FREE Rask Account.

(Psst. By creating a free Rask account, you’ll also get access to 15+ online courses, 1,000+ podcasts, invites to events, a weekly value investing newsletter and more!)

Unsubscribe anytime. Read our TermsFinancial Services GuidePrivacy Policy. We’ll never sell your email address. Our company is Australian owned.

Information warning: The information on this website is published by The Rask Group Pty Ltd (ABN: 36 622 810 995) is limited to factual information or (at most) general financial advice only. That means, the information and advice does not take into account your objectives, financial situation or needs. It is not specific to you, your needs, goals or objectives. Because of that, you should consider if the advice is appropriate to you and your needs, before acting on the information. If you don’t know what your needs are, you should consult a trusted and licensed financial adviser who can provide you with personal financial product advice. In addition, you should obtain and read the product disclosure statement (PDS) before making a decision to acquire a financial product. Please read our Terms and Conditions and Financial Services Guide before using this website. The Rask Group Pty Ltd is a Corporate Authorised Representative (#1280930) of AFSL #383169.

At the time of publishing, Jaz does not have a financial or commercial interest in any of the companies mentioned.
Skip to content