Propel Funeral Partners (ASX:PFP) reported a 0.3% year-over-year increase in total revenue to AUD 226.6 million for the fiscal year ended June 30, 2026, while operating EBITDA declined 1.6% to AUD 55.3 million, reflecting a 50-basis-point margin compression to 24.4%.
Operating net profit after tax fell 4.0% to AUD 20.7 million, though cash flow conversion improved by 150 basis points to 100.7%, generating AUD 54.9 million in operating cash flow before taxes and interest. The company maintained its dividend at 14.4 cents per share, fully franked, representing a payout ratio of approximately 97% of distributable earnings. The dividend has grown from 10.0 cents per share in FY20.
Total funeral volumes rose 1.1% to 22,854, though comparable volumes contracted by about 2% year-over-year. Gross margin edged up 10 basis points to 69.8%, while operating costs increased to 45.4% of revenue, driven by employment costs at 33.7% of revenue and occupancy expenses at 5.4%. Approximately 30% of headcount consists of casual labor.
Foreign exchange headwinds reduced revenue by AUD 3.2 million, primarily from New Zealand operations. Comparable average revenue per funeral increased roughly 2% in constant currency, aligning with the company's long-term compound annual growth rate of approximately 2.7% since FY15. Co-CEO Lilli Rayner noted that the metric remained "in line with the company's long-term compound annual growth rate."
The company operates 213 locations across Australia and New Zealand, including 130 owned properties, 42 cremation facilities, and 9 cemeteries. Geographic revenue is split 73% in Australia and 27% in New Zealand, with a roughly even split between regional and metropolitan markets. Propel holds an estimated 10% combined market share in an industry comprising over 500 independently owned businesses.
Net debt stood at AUD 151.2 million, with a net leverage ratio of 2.2 times, below the 5.0 times covenant limit. Total funding capacity reached AUD 169.1 million following a February 2026 refinancing that extended the senior debt facility maturity to October 2029 and established a new AUD 50 million accordion facility.
Demographic tailwinds remain a key focus, with the first baby boomers turning 80 in 2026 and the median age of death steady at 81–82 years. Death volumes are projected to grow at a 2.8% compound annual growth rate from 2026 to 2035, with annual deaths forecast to exceed 350,000 by 2045.
Shares of Propel fell 7.21% to AUD 3.09 following the results release.
