Propel Funeral Partners share price dips despite 'another record year'

Propel Funeral Partners reports FY22 earnings today.

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Key points

  • Propel Funerals' shares are on the move in early trade on Wednesday 
  • The moves come following the release of the company's FY22 earnings results 
  • In the last 12 months, the Propel share price is up 43% 

The Propel Funeral Partners Ltd (ASX: PFP) share price is on the move this morning following the release of the company's FY22 full-year results.

At the time of writing, the Propel share price is fetching $4.92 apiece, already down 0.41% from the open.

Propel secures another record performance

Key takeouts from the company's FY22 include:

  • Revenue of $145.2 million, up 20.6% on the prior year
  • Adjusted operating EBITDA of $39 million, up 25.2% year on year
  • Adjusted operating net profit after tax (NPAT) of $16.9 million, up 45.0% on the prior year
  • Adjusted NPAT of $16 million, up 53% from the previous year
  • Full franked total dividend of 12.25 cents per share (cps) – final dividend of 6.25cps

What else happened for Propel last period?

The company recognised a record year in terms of its financial performance. Funeral volumes increased by 18% from the previous year, backed by a 2% increase in average revenue per funeral.

It also booked revenue from 6 acquisitions that were completed during the financial year, seeing an impact on revenue shortly following their completion.

In addition, it saw a full year of income contribution from 3 acquisitions that were completed back in FY21.

The Propel board also authorised a fully franked final dividend of 6.25cps, representing a payout ratio of approximately 81% from NPAT.

Management commentary

Speaking on the results, both Propel's chairman and managing director, Brian Scullin and Albin Kurti commented:

During FY22, the funeral industry continued to experience operational disruptions (including increased absenteeism) due to COVID-19. However, the Company's diversification in providing essential funeral and related services across seven States and Territories of Australia and in New Zealand, including regional and metropolitan markets, delivered considerable resilience in earnings and operating cash flow.

What's next for Propel?

The company has started the new financial year well and notes that in the first 6 weeks of FY23, "total and comparable funeral volumes were materially higher than [last year]".

Moreover, it said that during July, average revenue per funeral was up 6% versus July last year, whilst operating EBITDA margin "reflected strong seasonal trading conditions".

In the last 12 months, the Propel share price is up more than 43%, having clipped a 11% gain this year to date.

Motley Fool contributor Zach Bristow has no position 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 Scott Phillips.

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