Propel Funeral Partners reported a 6.2% rise in statutory net profit to $12.5 million for the half-year ended December 2025, supported by strategic acquisitions in New Zealand and a refinancing of its senior debt. The company also declared a 7.5 cent fully franked interim dividend.
- Revenue increased 3.1% to $118.8 million
- Statutory net profit after tax rose 6.2% to $12.5 million
- Completed acquisitions of Jones & Co Funeral Services, Broadway Funeral Home, and Jacobsen Headstones in NZ
- Refinanced $275 million senior debt, extending maturity to 2029 with improved pricing
- Declared fully franked interim dividend of 7.5 cents per share
Solid Financial Performance Amid Strategic Expansion
Propel Funeral Partners Limited has delivered a steady financial performance for the half-year ended 31 December 2025, with revenue climbing 3.1% to $118.8 million and statutory net profit after tax increasing 6.2% to $12.5 million. Operating net profit after tax, a key earnings measure adjusted for non-operating items, rose 1.2% to $12.4 million, reflecting the company’s core profitability.
The company’s growth was underpinned by a combination of organic improvements and strategic acquisitions in New Zealand, where it expanded its footprint through the purchase of Jones & Co Funeral Services, Broadway Funeral Home, and Jacobsen Headstones. These acquisitions, completed in the latter part of 2025, add complementary funeral and memorial services to Propel’s portfolio, enhancing its presence in the Tauranga, Matamata, and Auckland regions.
Operational Highlights and Cost Discipline
During the period, Propel performed nearly 11,900 funerals, a 3% increase on the prior corresponding period, with average revenue per funeral holding steady despite the impact of foreign exchange and acquisitions with below-average revenue per funeral. The gross profit margin remained robust at 69.7%, slightly down from 70.0% the previous year, influenced by the mix of services and recent acquisitions.
Operating costs rose modestly by $1.8 million, driven by acquisition-related expenses and inflationary pressures, but disciplined cost management kept operating costs at 44% of revenue, consistent with prior periods. Operating EBITDA increased 1.3% to $30.3 million, demonstrating resilience in the company’s earnings before depreciation, interest, and tax.
Balance Sheet Strength and Debt Refinancing
Propel maintained a strong balance sheet, with net tangible assets of $152.9 million and net debt of $142.8 million as at 31 December 2025. The company refinanced its $275 million senior debt facility with Westpac Banking Corporation shortly after the reporting period, extending the maturity to October 2029 and securing improved pricing terms, including a reduced risk margin. This refinancing also introduced a new $50 million accordion facility, enhancing Propel’s financial flexibility for future growth opportunities.
Financial covenants remain comfortably met, with a net leverage ratio of 2.3 times and a fixed charge cover ratio of 3.9 times, well within the limits set by lenders. The company’s cash flow conversion remained strong at 95.4%, supporting ongoing capital expenditure and dividend payments.
Leadership Changes and Dividend Policy
The half-year saw significant leadership changes, with co-founders Fraser Henderson and Lilli Rayner appointed as Co-CEOs, and Arash Noaeen joining as CFO following the retirement of co-founder Albin Kurti. These appointments signal a new phase of leadership as Propel continues to execute its growth strategy.
Reflecting confidence in its financial position, Propel declared a fully franked final dividend of 7.0 cents per share for the 2025 financial year and an interim dividend of 7.5 cents per share for the current period, representing approximately 83% of distributable earnings. The dividends underscore the company’s commitment to returning value to shareholders.
Outlook and Industry Context
Looking ahead, Propel expects to benefit from favourable demographic trends in Australia and New Zealand, including an ageing population that supports demand for death care services. The company also anticipates further growth through acquisitions in a fragmented industry, although timing remains uncertain. With a strong funding position and improved debt terms, Propel is well positioned to capitalise on these opportunities.
Bottom Line?
Propel’s steady profit growth, strategic acquisitions, and debt refinancing set the stage for continued expansion in a consolidating death care market.
Questions in the middle?
- How will recent acquisitions in New Zealand integrate and contribute to future earnings?
- What impact will demographic shifts have on Propel’s funeral volumes and pricing power?
- How might the new debt facility terms influence Propel’s capacity for further acquisitions?