Key facts about Propel Funeral Partners Limited's H1 FY24 report

Propel Funeral Partners Limited (ASX: $PFP) has reported a statutory profit of $8.3 million for the half-year ended 31 December 2023, down from $10.2 million in the same period in 2022. The company attributes this decline to a significant contraction in industry death volumes and higher interest and acquisition costs. Operating NPAT, a core earnings measure, was not prescribed by the Australian Accounting Standards and amounted to $11.7 million, reflecting a 6.7% increase from the prior corresponding period. The company's Interim Financial Report and the Investor Presentation released concurrently with this Appendix 4D Half-year Report provide detailed explanation and commentary on the results.

Executive commentary on H1 FY24 performance

The Group's performance in the first half of FY24 reflects the impact of a material contraction in industry death volumes and higher interest and acquisition costs. The increase in revenue and Operating EBITDA demonstrates the resilience of our business in the face of these challenges. We remain focused on our strategic initiatives and are confident in the long-term prospects of the death care industry. The completion of several acquisitions and the announcement of the Capital Raising demonstrate our commitment to pursuing further growth opportunities. We are optimistic about the outlook for the remainder of FY24 and reaffirm our guidance for revenue in the range of $200-$220 million and Operating EBITDA in the range of $54-$60 million, despite the short-term fluctuations in death volumes and expected inflationary impacts on pricing and costs.

Outlook and FY24 Guidance

Propel Funeral Partners Limited has reaffirmed its guidance for the remainder of FY24, expecting to benefit from favourable demographics in Australia and New Zealand, strong funding capacity, and completed and announced acquisitions. The company's historical experience suggests that the material contraction in industry death volumes in CY23 should be temporary, given the rebound from prior period declines, the unusually benign winter flu season, and the growing and ageing populations in Australia and New Zealand. The company has started 2H FY24 with positive trading momentum, reflecting strong growth in funeral volumes, contributions from acquisitions, and higher Average Revenue Per Funeral. Despite short-term fluctuations in death volumes and expected inflationary impacts on pricing and costs, Propel Funeral Partners Limited remains optimistic about its outlook for the remainder of FY24 and reaffirms its guidance for revenue and Operating EBITDA.