New Zealand Acquisition

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  1. 70.4k

    Propel Funeral Partners Limited (ASX: PFP) (Propel) is pleased to announce it has executed a conditional sale agreement (and
    related documentation) to acquire the business trading as Graham’s Funeral Services, and certain freehold properties, in the
    North Island of New Zealand.
    Graham’s Funeral Services was established in New Zealand in 1935 and is managed by the founder’s grandson, Mark Graham.
    The business conducts approximately 350 funerals per annum and generated approximately NZ$2.7 million of revenue in its last
    financial year1
    . As part of the proposed transaction, Propel will acquire four freehold properties, including:
    • a funeral home on circa 3,300 sqm in Tuakau;
    • a funeral home on circa 1,200 sqm in Waiuku;
    • a chapel, hall and residential property on circa 3,400 sqm in Pukekohe; and
    • a residential property and vacant land on circa 1,000 sqm in Tuakau.
    The purchase price payable on completion of the proposed transaction will comprise:
    • approximately NZ$7.28 million2
    in cash; and
    • 227,510 ordinary shares in the capital of Propel to be issued at A$3.07 (Issue Price) each (i.e. the Australian dollar
    equivalent of NZ$0.75 million) which will be subject to escrow arrangements for 3 years3
    In addition, an amount of up to NZ$0.50 million in cash will be payable if certain financial milestones are achieved during the
    3 years following completion of the proposed transaction.
    Graham’s Funeral Services is expected to increase Propel’s annualised revenue by circa 2.1%4
    . The business has historically
    generated consistent and attractive earnings margins and the proposed acquisition is expected to be earnings accretive in year
    Mark Graham, Managing Director of Graham’s Funeral Services said “We have been thinking carefully about how best to
    position the business for ongoing growth while continuing the service delivery excellence that has been provided to client
    families in our local communities. After spending time getting to know the senior management of Propel we felt their ‘business as
    usual’, partnership approach really resonated with us. As a family, we like that our future shareholding in Propel ensures a
    strong alignment and we’re pleased that our staff will be joining a supportive and growing funeral operator. I really see this as an
    exciting next step for the business.”
    Albin Kurti, Managing Director of Propel, said “Graham’s Funeral Services will expand Propel’s network in the North Island of
    New Zealand, which is a core market. The team and I are pleased that Mark will continue the Graham family’s 84 year
    association with the business. We look forward to partnering with Mark and welcoming his staff to Propel.”
    Completion of the proposed transaction is expected to occur in Q2 of FY20, following satisfaction (or waiver) of conditions such
    as confirmatory due diligence. Propel intends to fund the cash amount payable on completion from its debt facilities.

    courtesy of Bell Direct

    ( DYOR )

    i do not hold this share

    i note this ann. addresses some questions that deter me from investing in IVC

    looks like i have something to research this weekend

    take care

  2. 14.2k

    Didn't know this existed as competition to ivo

  3. 70.4k

    to Invocare yes but a relatively newly listed stock , and as such i have been watching ( and thinking )

    this sector SHOULD be a safe haven , that i don't have a bet in .. but Invocare seems to have a high D/E ratio which can be harmless or very worrying

  4. 14.2k

    Both good stocks by the looks. Steady growth single figure growth, year in year out

  5. 70.4k

    ideal for a defensive play ( if you can get a good price )

    the key is the debt and how it is secured

    property can usually be leveraged at lower interest rates , but if leverage on plant ( live vehicles or gasp ,unsecured ) that debt could become a real problem

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