Propel Funeral Partners Bought All of Its Growth While Australia's Death Count Rose 13%

The claim#

Almost no listed company has its total addressable market counted for it, every month, by a statistical agency. This one does. Its market is the number of people who die.

That is the whole investment case, and the company makes it plainly. Slide 21 of the half-year presentation lodged on 24 February 2026 sets out the market opportunity: Australian death volumes grew 1.1% a year between 1990 and 2025, and are projected to grow 2.9% a year from 2026 to 2035 and 2.4% a year from 2036 to 2045. Slide 25 lists the reasons to own the shares, and the third is “growing and ageing populations in Australia and NZ (provide favourable demographic ‘tail winds’ over the long term)”. The first is a “strong growth track record” and “growth in key operating metrics (funeral volumes, Average Revenue Per Funeral and network size)”.

The market is paying for that. At $3.22 the shares are on about 21.4 times trailing earnings, with a consensus target of $4.76, some 46% above the last traded price, after a 32% fall over twelve months. The company is the second largest death-care provider in Australia and New Zealand, trading from 208 locations including 41 cremation facilities and 9 cemeteries, and it says it has taken its combined market share from about 1% in 2015 to about 10% in 2025.

Every part of that is checkable, because the denominator is public.

The constraint#

The Australian Bureau of Statistics publishes deaths by the month in which they occurred, from doctor and coroner certifications, in a data cube covering 2015 to 2025. It is compiled from certificates rather than from any operator’s records, the company does not control its reporting, and the monthly granularity means it can be cut to a 30 June financial year exactly.

The provisional series is close enough to the final registered count to rely on: provisional deaths for calendar 2024 come to 187,084 against 187,268 registered — a difference of 0.10%. Aligned to the company’s financial years, the count is:

Year to 30 June	Deaths in Australia	Change
FY18	163,687	—
FY19	162,960	−0.4%
FY20	164,326	+0.8%
FY21	165,619	+0.8%
FY22	183,390	+10.7%
FY23	188,310	+2.7%
FY24	185,045	−1.7%
FY25	185,109	+0.0%

Over seven years, +13.1%. The tailwind is real.

Now the company’s own measure of what it did with it. Every year since listing it has disclosed the growth in comparable funeral volumes — volumes at the funeral homes it owned throughout both the year and the year before, stripped of acquisitions. The figures come from the directors’ report in each annual report: −2.1% in FY19, −2.2% in FY20, −3.5% in FY21, +8.9% in FY22, about +1% in FY23, about −6% in FY24, −1% in FY25. Chained together, the estate the company already owned did −5.4% over the seven years in which the national death count rose 13.1%.

Blue: comparable funeral volumes, chained from the growth rate disclosed in each annual report. Grey: deaths in Australia in the year to 30 June, ABS provisional mortality statistics by date of occurrence. Both start at 100 in FY18.

Relative to its own market, the estate the company started with now performs 16.4% fewer funerals per death in Australia than it did in FY18.

The gap#

The cumulative number is the consequence. The finding is in the individual years, because there is no exception to it.

Blue: comparable funeral volume growth as disclosed. Grey: change in Australian deaths for the matching period (ABS). 1H26 is the half to 31 December 2025 against the half to 31 December 2024.

In all eight reporting periods since the company listed, comparable funeral volumes have grown more slowly than the national death count:

Period	Comparable volumes	Deaths	Shortfall
FY19	−2.1%	−0.4%	−1.7pp
FY20	−2.2%	+0.8%	−3.0pp
FY21	−3.5%	+0.8%	−4.3pp
FY22	+8.9%	+10.7%	−1.8pp
FY23	+1.0%	+2.7%	−1.7pp
FY24	−6.0%	−1.7%	−4.3pp
FY25	−1.0%	+0.0%	−1.0pp
1H FY26	0.0%	+3.2%	−3.2pp

The pandemic does not create this. FY22’s death spike was the best year of the eight in absolute terms — comparable volumes up 8.9% — and it is still a period in which the market grew faster. Nor does the pattern depend on where the window starts or ends: it is present in the two years before COVID, in the spike, in the two years of normalisation after it, and in the latest half.

The latest half is the sharpest of the eight, because it is the one in which the thesis the company sells actually happened. Deaths in Australia in the six months to 31 December 2025 were 97,943, up 3.2% on the 94,896 of the previous December half — close to the 2.9% a year the presentation projects for 2026 to 2035. Comparable funeral volumes over the same six months were, in the company’s own description, “in line with the PCP”. Flat. Total volumes rose 3.0%, from 11,549 to 11,898, and the entire increase came from businesses bought since the prior year.

What the growth cost#

Total volumes have more than doubled. In FY18 the group performed 10,111 funerals; in FY25 it performed 22,602 — an increase of 12,491, or 123.5%. Because the comparable estate contracted over the same period, none of that increase was won.

Bars are total volumes as reported. Hover or tap for the comparable-estate change in each year: the growth in the bars and the direction of the comparable number are opposite for five of the seven years.

The presentation puts the cost at $306m of upfront cash and equity consideration since the FY18 listing, averaging about $38m a year, plus a further $50.3m of property purchased in connection with acquisitions and otherwise — $356.3m in total, excluding stamp duty and transaction costs. Set against 12,491 funerals added, that is about $24,500 of consideration per annual funeral, on an average revenue per funeral of $6,721.

What it produced: Operating EBITDA rose from $21.5m in FY18 to $56.2m in FY25, an increase of $34.7m. Against $356.3m deployed, that is a pre-tax return of 9.7% — 11.3% if property is excluded and only the acquisition consideration is counted. For comparison, the pre-tax discount rate the company itself applies to its goodwill is 10.8%.

The most recent capital has bought less than that. Operating EBITDA grew 1.4% in FY25, from $55.4m to $56.2m, in a year with three completed acquisitions and the full-year benefit of ten completed the year before. In the half to December 2025 it grew 1.3%, from $29.9m to $30.3m, with two more acquisitions completed and the Operating EBITDA margin down from 26.0% to 25.5%. Revenue in that half rose 3.1% and Operating NPAT 1.6%. Acquisitions are now roughly cancelling the comparable decline rather than adding to it.

Where the goodwill sits#

The obvious objection is that national deaths are not the deaths in the towns and suburbs where this network actually trades. It is a fair objection, and it can be tested, because note 14 of the FY25 annual report allocates goodwill across eight cash-generating units and the ABS publishes deaths by state.

Weighting state-level death growth by that goodwill allocation — New South Wales 27.0%, Queensland 28.2%, Victoria 14.7%, Tasmania 9.3%, South Australia 8.6%, Western Australia 7.7%, the ACT 4.4% of the Australian total — gives +13.8% over the seven years against +13.1% nationally, and +3.4% in the latest half against +3.2%. Every state grew, from +5.8% in the Northern Territory to +22.9% in Western Australia.

Weighting the market by where the company actually put its money makes the gap wider, by 0.7 of a percentage point over seven years. The footprint is not the explanation.

Corroboration#

These are secondary. They matter only because the primary finding is already established.

The growth rate inside the impairment model. Note 14 supports $203.7m of goodwill — 57.4% of shareholders’ equity, never impaired in any year — with a five-year discounted cash flow using revenue growth of 5.0% a year (FY24: 5.2%), cost-of-sales growth of 4.3%, overhead growth of 2.7% and a 10.8% pre-tax discount rate. The note says these rates are “broadly in line with historical trends and forecasts prepared by market analysts”, which is true of total revenue: it has compounded at about 16% a year, on acquisitions.

Comparable revenue growth is a different number, and it can be derived from the company’s own disclosures by compounding comparable volume growth with comparable average-revenue-per-funeral growth: +8.1% in FY23 (+1% volume, +7% price), −0.8% in FY24 (−6% and +5.5%), +1.3% in FY25 (−1% and +2.3%), and about +2.0% in the latest half. Across FY23 to FY25 that averages 2.8% a year.

All three are annual revenue growth rates. Assumed — the rate used in the note 14 value-in-use model. Comparable — comparable volume growth compounded with comparable price growth, FY23 to FY25 average. Reported — group revenue growth in the half to December 2025, acquisitions included.

This is a description of two different numbers, not an assertion that the carrying value is wrong. The note discloses that assumptions were flexed unfavourably by 10% and that material headroom remained in every CGU, and there is real asset backing underneath: 126 owned properties at about $246m of depreciated cost, and $312.1m of property, plant and equipment against $203.7m of goodwill. The point is narrower. An existing cash-generating unit is valued on the cash flows of the assets it already has. Getting from 2.8% to 5.0% has, on this record, required buying businesses the existing units do not yet own.

Distributions against retained profit. After nine years as a listed company, $380.8m of issued capital and $306m of acquisitions, the balance sheet shows accumulated losses of $26.4m. Cumulative statutory profit has been paid out roughly as fast as it has been earned, while acquisitions have been funded from new equity and debt. Net debt is $132.0m and gearing 27.1%, with $182m of stated funding capacity — which is the next $38m-a-year tranche, and the one after it, and the one after that.

Total shareholder return. The presentation puts total shareholder return since the IPO at about 88%. Over the roughly eight and a half years from listing in November 2017 to February 2026, that is about 7.7% a year.

What would explain this instead#

Four explanations do not involve anyone doing anything wrong, and each one has evidence that would settle it.

1. Cannibalisation. This is the strongest of them. When the group buys a competitor in the same town, some volume moves from the funeral home it already owned to the one it just bought. The comparable estate loses funerals the group keeps. On this reading the comparable series is a measurement artefact of the acquisition strategy, not a signal about it, and the right denominator is same-market volume, not same-site.

Two things bear on it. The strategy has been mostly geographic extension rather than in-market consolidation: metropolitan revenue fell from 50% to 48% of the total in FY25 “due to the impact of recent acquisitions”, and the FY26 acquisitions were in Tauranga, Matamata and Auckland. Cannibalisation of that kind requires overlapping catchments. And the effect would have to be large and sustained enough to convert −5.4% into something above +13.1% across seven consecutive years, in a network that grew from 22 funeral businesses to 208 locations. It cannot be dismissed, and it is not quantified anywhere in the public record. What would settle it: volumes disclosed on a same-market basis, and the count of locations closed or consolidated each year. Both are internal numbers management monitors. Both are in the field-work list.

2. Volume traded deliberately for price. Comparable average revenue per funeral grew about 7% in FY23 and 5.5% in FY24, well above the 2.1% CPI the company itself cites as the benchmark. A business that walks away from the cheapest cremation-only work and holds price on full-service funerals will show exactly this pattern: falling comparable volumes, rising comparable revenue per funeral. That is a strategy, and on FY23 and FY24 numbers a profitable one. What weakens it is FY25 and the latest half, when comparable price growth fell back to 2.3% and about 2% while comparable volumes kept underperforming the market. Trading volume for price stops working when the price stops rising faster than costs. What would settle it: funeral mix — full service against cremation-only — on a comparable basis, and current list prices against local independents.

3. Geography and catchment. National deaths are not the deaths in the specific suburbs and country towns where these funeral homes sit; an ageing coastal town and a growing outer suburb behave differently. This is the objection the state-level weighting above was built to test, and at state level it makes the gap wider rather than narrower. But states are coarse. SA4 or SA2-level death counts matched to the actual location list would be a real test, and are field work rather than a desk result. What would settle it: deaths by statistical area matched to the location register.

4. New Zealand. The comparable-volume metric is group-wide; the ABS series is Australian. New Zealand holds $56.98m of goodwill, 28% of the total, and if New Zealand deaths grew much more slowly than Australian deaths, part of the gap is geographic mix rather than share. The company’s own presentation, footnoted to Stats NZ, points the other way — New Zealand deaths grew 0.9% a year from 1990 to 2025 and are projected at 2.0% a year from 2026, and its market-share slide implies New Zealand deaths rose from 31,638 in CY15 to 37,695 in CY25, about 19% against roughly 18% for Australia over the same span. That is the company’s citation of Stats NZ, not this desk’s reconstruction of it, and it is the single largest soft spot here. What would settle it: the Stats NZ monthly series rebuilt directly on a 30 June year, which is the third field-work assignment.

Kill criteria#

The thesis is wrong, and this desk should say so, if any of the following happens.

• Comparable volumes match the market. Comparable funeral volume growth reaches or exceeds the change in the ABS death count for two consecutive reporting periods. The FY26 result, due 25 August 2026, is the first test: deaths in the December half rose 3.2%, so a comparable figure at or above the full-year death change breaks the run of eight.
• Same-market volumes are disclosed and show organic growth. If the company publishes volumes on a same-market basis and they track the death count, the comparable series was measuring cannibalisation and the central finding dissolves.
• The mix explanation is documented. Comparable funeral mix showing a deliberate and profitable retreat from low-value work, with comparable gross profit per funeral rising faster than costs, converts falling volumes from a symptom into a choice.
• The acquisitions start compounding. Operating EBITDA growth returning to double digits, or the Operating EBITDA margin recovering through 26%, would mean the recent tranches are adding operating leverage rather than replacing lost volume.
• New Zealand breaks it. If the Stats NZ series shows New Zealand deaths grew far more slowly than Australian deaths over FY18 to FY25, the group-wide comparable figure is being measured against the wrong denominator and the size of the gap is overstated.

Conversely, the thesis strengthens if the FY26 accounts show a ninth consecutive period of comparable volumes below the death count, or if the note 14 revenue growth assumption is held at 5.0% for a third year.