Propel Funeral Partners Locks in Three NZ Acquisitions and Issues FY26 Guidance
Propel expands New Zealand footprint with three acquisitions and issues FY26 guidance
Propel Funeral Partners (ASX: PFP) has announced three completed and/or binding acquisitions across regional New Zealand, alongside the release of its FY26 financial guidance. The three businesses, Evans Funeral Services (including Gisborne Tairawhiti Cremation Services), Leishman Funeral Services, and Collingwood Funeral Home, carry a total consideration of up to ~A$9.1 million and together generate ~A$4.0 million in revenue across more than 700 funerals per year. The announcement reflects continued execution of Propel’s regional growth strategy in New Zealand.
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Three regional NZ businesses join Propel’s growing network
What Propel is acquiring
The three acquisitions span distinct regional markets across New Zealand, adding four operating locations to Propel’s network:
- Evans Funeral Services (including Gisborne Tairawhiti Cremation Services): A funeral services provider and crematorium operating in and around Gisborne, NZ. Notably, this acquisition includes a cremation facility, adding scarce infrastructure to Propel’s regional NZ footprint.
- Leishman Funeral Services: A funeral services provider operating in Balclutha, NZ.
- Collingwood Funeral Home: A funeral services provider operating in Rotorua, NZ.
All four operating locations will be acquired by Propel on settlement. Completion is expected across Q4 FY26 and/or Q1 FY27, subject to the satisfaction or waiver of customary conditions, including third-party lessor consents, consents to assignment of key contracts, and due diligence (including in respect of regulatory matters).
Deal structure and financials
The total consideration of up to ~A$9.1 million is structured as follows:
- A$8.3 million in cash payable on completion, funded from Propel’s existing debt facilities.
- Up to ~A$0.8 million in cash, contingent on certain financial milestones being achieved during a four-year earn-out period.
All three acquisitions are expected to be earnings accretive in year one. Figures are estimates, exclude completion adjustments and transaction costs, and are subject to NZD/AUD exchange rate movements.
| Business Name | Location | Key Feature | Combined Revenue Contribution | Completion Timeline |
|---|---|---|---|---|
| Evans Funeral Services (incl. Gisborne Tairawhiti Cremation Services) | Gisborne, NZ | Includes cremation facility | ~A$4.0M combined (700+ funerals/year; individual splits not disclosed) | Q4 FY26 and/or Q1 FY27 |
| Leishman Funeral Services | Balclutha, NZ | Regional funeral services operator | Q4 FY26 and/or Q1 FY27 | |
| Collingwood Funeral Home | Rotorua, NZ | Regional funeral services operator | Q4 FY26 and/or Q1 FY27 |
Understanding the funeral services consolidation model
Funeral services consolidators like Propel grow by systematically acquiring independent regional operators, typically retaining the acquired business’s local brand identity to preserve community trust while applying group-level operational efficiencies across procurement, administration, and staffing.
Regional New Zealand markets are particularly attractive for this model for several reasons. Lower competitive intensity relative to metropolitan centres means acquisition multiples can be more favourable. Real estate ownership, which Propel secures across all four locations in this transaction, provides long-term cost stability and balance sheet value. Cremation infrastructure is also relatively scarce in regional markets, making operators such as Evans Funeral Services strategically valuable assets.
Earn-out structures, such as the ~A$0.8 million contingent payment included here, are a common feature in this sector. They align the selling vendor’s incentives with post-acquisition performance, ensuring business continuity during the transition period, while simultaneously reducing the acquirer’s upfront capital outlay and financial risk.
For investors, the scale benefits of this model become visible over time. Propel now operates from 209 locations, including 41 cremation facilities and 9 cemeteries. At that scale, the group can negotiate more favourable supplier terms, share fixed costs across a larger revenue base, and deploy management capability more efficiently than any single independent operator could achieve.
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FY26 guidance signals resilient performance despite FX headwinds
Guidance at a glance
Propel’s FY26 guidance reflects broadly stable operational performance, with revenue and Operating EBITDA ranges sitting close to FY25 actuals. The primary drag on the midpoint relative to FY25 is a significant AUD/NZD foreign exchange movement, not a deterioration in underlying business conditions.
| Metric | FY25 Actual | FY26 Guidance (Low) | FY26 Guidance (High) |
|---|---|---|---|
| Revenue ($m) | A$225.8m | A$225.0m | A$230.0m |
| Operating EBITDA ($m) | A$56.2m | A$54.5m | A$56.5m |
Key assumptions behind the numbers
Propel’s FY26 guidance is underpinned by four key assumptions:
- Propel performs approximately 22,850 funerals (±200), reflecting a ~1% increase on FY25 volumes.
- Comparable Average Revenue Per Funeral annual growth of ~2%, with the NZD/AUD exchange rate held constant with the prior corresponding period for this calculation.
- A stable gross margin and annual operating cost growth of ~2.5%.
- A greater than 10% strengthening of the AUD against the NZD, generating an unfavourable FX translation impact of approximately ~A$4.0 million to revenue and ~A$1.0 million to Operating EBITDA.
The FX headwind is the primary reason the guidance midpoint for Operating EBITDA sits marginally below FY25 actuals. Underlying operational performance, as measured by funeral volumes, average revenue per funeral, and cost control, remains on a stable trajectory. Guidance is based on unaudited management accounts for the ten months ended 30 April 2026, plus estimates for May and June 2026, with no unforeseen events assumed.
Long-term revenue growth context
Propel’s revenue trajectory over the past eight years illustrates the cumulative impact of its acquisition-led model. Revenue has grown from A$80.9 million in FY18 to A$225.8 million in FY25, with FY26 guidance pointing to continued growth in that range. This reflects a consistent, repeatable strategy of regional consolidation rather than organic market expansion alone. The three New Zealand acquisitions announced today represent the latest step in that ongoing programme.
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