Propel Funeral Partners (PFP) H1 2026 earnings summary

Executive summary

• Revenue for 1H FY26 rose 3.1% year-over-year to $118.8 million, with operating EBITDA up 1.3% to $30.3 million and operating NPAT up 1.2% to $12.4 million.

• Funeral volumes increased 3.0% to 11,898, with average revenue per funeral at $6,729, up ~2% on a comparable basis.

• Cash flow conversion remained strong at 95.4%, and the interim dividend increased to 7.5 cents per share, fully franked, with a payout ratio of ~83%.

• Two acquisitions completed in the first half, including Jones & Co, Broadway, and Jacobsen in New Zealand, plus four freehold properties acquired for $6.2 million.

• The business continues to benefit from favorable demographics and a highly fragmented industry, supporting further acquisition opportunities.

Financial highlights

• Gross profit margin was 69.7%, in line with the prior year.

• Operating EBITDA margin was 25.5%, slightly down from 26.0% in 1H FY25, mainly due to recent acquisitions.

• Operating costs as a percentage of revenue improved to 44.2% from 45.0% in 1H FY25.

• Net leverage ratio stood at 2.0x, with $182 million in funding capacity including a new $50 million Accordion Facility.

• Cash flow conversion averaged ~99% since FY15, with 1H FY26 at 95.4%.

Outlook and guidance

• Management expects to benefit from favorable demographic trends, improved debt pricing, and further industry consolidation opportunities.

• Easier volume comparables are anticipated in the second half, following a prior period contraction in organic funeral volumes.

• Gross margin is expected to remain around 70% in the second half.

• Acquisition pipeline remains robust, with multiple ongoing discussions, though timing is uncertain.