Why did the Propel (ASX:PFP) share price climb higher on Thursday?

The company’s AGM seems to have gone down well with investors

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Two funeral workers with a laptop surrounded by cofins.

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The Propel Funeral Partners Ltd (ASX: PFP) share price finished the day higher on Thursday, up 3.06% to $4.38.

Propel’s shares took off from the open as the market responded positively to its annual general meeting (AGM).

Here are the key takeouts from the annual shareholder address by the second-largest private provider of death-care services in Australia and New Zealand.

What did Propel Funeral Partners announce?

The company reiterated its FY21 results, which reflected another record year for Propel. It grew revenue by 8.7% to $120 million, driven mainly by an increase in funeral volumes.

Average revenue per funeral was also up 4.3% for the year, which contributed to operating earnings before interest, taxes, depreciation, and amortisation (EBITDA) growth of 12%. At the bottom line, Propel recognised an operating net profit after tax (NPAT) of $15.2 million.

Aside from this, cash-flow conversion was 102% for FY21, which the company was pleased about. All of this activity occurred as Propel performed more than 139,000 funerals in the year, up 4.6%.

Shareholders enjoyed an 11.7 cents per share dividend in FY21 from these results, growing their dividend income by 17.5% over the year.

The company has also added 2 new locations since the start of FY22, bringing its total network to 138 locations. The Propel share price jumped 5.8% on August 25 when the FY21 results were announced.

Today’s address follows Propel’s Q1 F22 trading update released last month, which outlined several investment highlights.

In the first quarter, the company generated revenue growth of approximately 13% on the prior quarter. Funeral volumes grew 5% from the previous quarter as well.

In light of this, the company believes it is well-positioned to generate sustainable long-term growth and create value for its shareholders, according to its management.

Speaking on value creation to date, Propel Funeral Partners’ chair Brian Scullin gave a breakdown of its efforts since listing in 2017. He said:

Since listing on the ASX in November 2017 with an IPO issue price of $2.70, the company has paid fully franked dividends totalling 39.65 cents per share, or circa 57 cents per share on a grossed up basis. At yesterday’s closing share price of $4.25, this equates to total shareholder value accretion of approximately $215 million since the IPO, before tax.

Propel Funeral Partners share price history

In the past 12 months, the Propel share price has climbed more than 43% into the green. It has also rallied around 53% this year to date.

However, in the past month, it has lost steam and is around 1.5% in the red. Despite this, in the long-term, the company is ahead of the benchmark S&P/ASX 200 Index (ASX: XJO)’s return of around 13% in the past 12 months.

Propel Funeral Partners has a market capitalisation of $486 million.

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The author Zach Bristow has no positions in any of the stocks mentioned. The Motley Fool Australia's parent company Motley Fool Holdings Inc. has no position in any of the stocks mentioned. The Motley Fool Australia has recommended Propel Funeral Partners Ltd. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.

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