Morning, everyone, and thanks for joining Propel's full year results briefing for FY 'twenty one. I hope that wherever you're listening to this, you and your family are safe and well. COVID-nineteen continues to impact the way we work, live and gather to honor and remember loved ones who have passed. So before we start today's presentation, I'd like to acknowledge and express my sympathies to bereaved client families, many of whom have farewelled loved ones in very challenging circumstances, especially in lockdown areas where strict funeral attendee limits and travel restrictions apply. Having to limit and choose who can attend a funeral is extremely distressing with many families significantly constrained and unable to grieve in a way that they ordinarily would, surrounded and supported by family and friends.
As you can imagine, this has placed additional pressure on families and our staff. So, I'd like to also acknowledge and thank Propel's dedicated staff for their hard work, professionalism, flexibility and commitment to providing essential and caring services to their communities despite the challenges of COVID-nineteen. Turning to today's presentation, joining me on the line are my colleagues, Lily Gladstone and Fraser Henderson, and together, we will take you through the presentation lodged with the ASX this morning. In terms of the agenda, I'll summarize the key highlights of FY 'twenty one, touch on COVID-nineteen impacts and responses, the recently completed management internalization, and I'll then provide a brief overview of the business. Lily will cover the financial results in more detail.
Fraser will touch on industry trends and acquisitions. And finally, I'll make some concluding remarks before taking questions. The 3 key takeaways from today's presentation are firstly, FY 'twenty one was another record year for PROPEL, despite below trend death volumes and COVID-nineteen impacts. Secondly, PROPEL stands to benefit from death volumes reverting to long term trends. And in that regard, following a resilient FY 'twenty one, Propel has started FY 'twenty two with higher funeral volumes.
However, COVID related disruptions are expected to continue. And thirdly, with a strong funding position, Propel remains well positioned to continue consolidating what is a highly fragmented and essential service industry with favorable demographic tailwinds. Please turn to Slide 6 for the key highlights. Revenue increased 8.7 percent to $120,400,000 on the back of a 4.6% increase in funeral volumes, including contributions from acquisitions, with average revenue per funeral up 4.3%. Propel continued to grow earnings with operating EBITDA up 11.9% to $36,300,000 and operating NPAT up 7.6% to 15,300,000 dollars Cash conversion remains strong at approximately 102%, which is pleasing.
From a capital management perspective, the Board has declared a final dividend of $0.575 per share fully franked, resulting in total dividends of CAD0.1175 per share fully franked in connection with FY 'twenty one, up 17.5% on the prior year and representing a payout ratio of 81%. Propel ended the year with a gearing ratio of approximately 30%, and we are pleased to announce today that the company has expanded its senior debt facilities by CAD 50,000,000 to CAD 200,000,000 a strong vote of confidence from our debt financier, Westpac. Available funding capacity now exceeds $100,000,000 which will support Propel's acquisition led growth strategy. Furthermore and importantly, the debt maturity date has been extended, the cost of borrowing has been reduced and a key covenant limit has been increased, which Lily will cover in more detail later in the presentation. In terms of growth, Propel added 6 locations during the year, bringing its total network to 136 locations as at year end.
Management has been focused on executing Propel's acquisition led growth strategy, deploying approximately $127,000,000 on acquisitions since the company's IPO in November 2017. During the year, we expanded in New Zealand, Western Australia, Queensland and New South Wales, and we purchased 2 freehold properties, one of which was previously tenanted by the group. Frazer will provide an acquisition update shortly. In terms of our outlook, the company expects to benefit from debt volumes reverting to long term trends, a growing and aging population, a strong funding position and acquisitions completed to date and other potential future acquisitions in what is a highly fragmented industry. I'll talk more about our outlook towards the end of the presentation and will now touch on key COVID-nineteen impacts and some of our responses.
Strict funeral attendee limits in lockdown areas of Australia and New Zealand during FY 'twenty one affected the company's ability to offer a full range of services to client families and temporarily resulted in a higher mix of lower value funerals performed across Propel's network. However, as can be seen from the chart at the top of this slide, unlike the widespread impacts of the in the final quarter of FY 2020, In FY 'twenty one, average revenue per funeral impacts were generally isolated to COVID hotspots that were in temporary lockdown and average revenue per funeral across Propel's network returned to pre COVID levels, which is encouraging. Funeral volumes have also been impacted during FY 2021, particularly in the first half, death volumes were below long term trends in key markets in which Propel operates. For example, total registered deaths in New South Wales and Queensland declined 4.2% compared to the prior year. Social distancing measures, travel restrictions and increased focus on personal hygiene and effective flu vaccinations have contributed to unusually benign flu seasons in 2020 year to date in 2021.
And as illustrated in the chart to the bottom right, reported flu cases in Australia were circa 99% below the prior 5 year average to 2019, which is expected to result in a deferral of debt volumes into future periods. Slide 8 sets out some of our responses to COVID-nineteen and how we, our staff and our client families have had to adapt. Our focus has been on people safety, essential service continuity and financial resilience. I won't go through each point listed on this slide, but the measures implemented range from reducing and rearranging seating capacity in our chapels, limiting attendance and increasing the scheduled time between services, increased online streaming of funerals, changing the way funerals are arranged, controlling operating costs, staff working from home where feasible and accessing government subsidies where eligible, enabling headcount to be maintained. With the support of our dedicated staff and the understanding of our client families, Propelis focused on continuing to trade effectively through COVID disruptions as they occur.
Slide 9 summarizes the recently completed management internalization. At a recent general meeting, Propel shareholders voted overwhelmingly in favor of a proposal to internalize the senior management functions of the company with the relevant shareholder resolutions being carried with over 98% of votes in favor. In summary, the management internalization was completed late last month and involved termination of the management agreement, a $15,000,000 termination fee paid to the manager, which was settled 50% in cash and 50% in shares, Lily Fraser and I becoming employees, the transfer of intellectual property to the company and changes to the constitution and escrow arrangements relating to approximately 14,700,000 Propel shares. The management internalization has aligned the company with more standard management structures for ASX listed operating entities, which is expected to increase investor participation, provide corporate governance and financial benefits, while ensuring continuity of the company's strategy, its board and management. I'll now provide a brief overview of the business.
Slide 11 illustrates how Propel's network has evolved over the past 8 years. We started with 1 funeral home in Queensland, and today, we operate from 100 and 36 locations across Australia and New Zealand, including 32 cremation facilities and 9 cemeteries. Of those 136 locations, the company owns 77 of the properties, which are held at cost on the balance sheet at approximately CHF 122,000,000 Slide 12 shows Propel's main operating brands in Australia and in New Zealand. Each brand has a distinct identity and is well known in their respective markets. Some have been around for many decades.
For example, in Tasmania, Millington's has been operating in and around Hobart for over 100 years. And in New Zealand, Davis Funerals has operated in and around Auckland since 18/75. The green dotted lines show those brands added to Propel's network during FY 'twenty one, and these brands are an important part of the goodwill of each business. The chart on Slide 13 illustrate Propel's historic growth in funeral volumes and revenue. As you can see on the left, the company performed over 13,900 funerals in FY 'twenty one, up 4.6%.
The chart on the right shows that Propel generated revenue of CHF120.4 million in FY 'twenty one, up 8.7%. The charts on Slide 14 illustrate Propel's historic growth in operating earnings. As you can see on the left, the company generated operating EBITDA of CAD36,300,000 in FY 'twenty one, a more than 10 fold increase since FY 'fifteen and up 11.9% on the prior year. The chart on the right shows the Propel generator operating NPAT of 15,300,000, up 7.6%. Moving to Slide 15.
The strength and resilience of Propel's earnings has enabled the Board to declare total dividends in connection with FY 'twenty one of $0.1175 per share, up 17.5% on the prior year. This represents a payout ratio of 81% and a gross dividend yield of 4.7%. A final dividend of CAD0.575 per share fully franked will be paid on the 5th October with a record date of the 2nd September. Since its IPO, Propel has declared fully franked dividends totaling approximately CAD0.40 per share or circa CAD0.57 per share on a pretax basis. The chart on Slide 16 shows Propel's average revenue per funeral since FY 'fourteen, which has grown at a compound annual growth rate of 2.7%.
In FY 'twenty one, average revenue per funeral was up 4.3% on FY 'twenty and up 2.8% on the pre COVID-nineteen period. Turning to Slide 17. Cash conversion continues to be a key focus. As you can see from this chart, Propel's cash conversion has remained consistently high, averaging approximately 99% during the last 7 years. In FY 'twenty one, cash conversion remained strong at approximately 102%, which is pleasing, particularly given the continued growth in operating cash flow and COVID-nineteen impacts.
Turning to Slide 18. Before I hand over to Lily, I want to briefly touch on the company's performance since its IPO. PROPEL listed on the ASX in November 2017. And as you can see from the chart on this slide, as at 30 June 2021, Propel's share price has materially outperformed the ASX 300 index and its only listed domestic peer. For investors who participated in Propel's IPO and who retained their shareholding as at 30 June 2021, Propel has generated a total shareholder return of approximately 57% on a pretax basis, including dividends.
This equates to total shareholder value accretion since the IPO of approximately RMB153 1,000,000 pretax. On behalf of everyone involved with PROPEL, I thank shareholders for their ongoing support. I'll now hand over to Lily, who'll provide some further detail on the FY 2021 financial results.
Thanks, Albin, and good morning, everyone. Propel's FY21 financial results proved resilient despite continued COVID-nineteen related disruptions. Today, I will cover off on 5 key areas. Firstly, I'll provide an overview of Propel's full year results by our analysis of the income statement. Secondly, I'll touch on key growth drivers of revenue, operating earnings and margin.
I'll then provide an analysis of the cash flows, the balance sheet and wrap up by touching on the extension of the senior debt facilities and other capital management matters. Please turn to Slide 20. PROPEL generated revenue of $120,400,000 in FY 2021, an increase of 8.7% on the prior year. The increase was driven by the full year impact of 2 acquisitions completed in FY 2020 and the part year impact of 3 acquisitions completed during the year. Furthermore, the performance was impacted by growth in average revenue per funeral, partially offset by below trend debt volumes in key markets.
PROPEL reported a gross margin of 72%, which was 20 basis points higher than FY 2020. The increase was primarily due to the financial profile of recent acquisitions, which included cremation facilities. The company generated operating EBITDA of $36,300,000 in FY 2021, an increase of 11.9% on the prior year. It was positively impacted by growth in average revenue per funeral, acquisitions, COVID-nineteen related mitigation measures, including recognition of government wage subsidies of $2,200,000 in the first half, partially offset by the low trend debt volumes. In terms of other items of note on the income statement, no performance fee was paid to the manager in respect of the 3rd calculation period.
Acquisition and transaction costs were lower than FY 2020 and included costs related to the internalization. The net financing charge increased partially due to acquisitions and the lower interest and lower investment returns due to the current interest rate environment. And despite lower interest rates, net interest expense was higher than FY 2020 as a result of increased borrowings. PROPEL generated operating NPAT of $15,300,000 in FY 2021, up 7.6% on the prior year, which translated to operating earnings per share growth of 6.7%. The adjusted effective tax rate for the year was 29.8%.
The waterfall on slide 21 sets out the sources of revenue growth on the prior year. The chart shows the full year impact of 2 acquisitions made in FY 2020, the part year impact of 3 acquisitions completed during the year, and organic, the businesses held for the comparable period. As you can see from the comments on the bottom left of the slide, average revenue per funeral increased 4.3% and funeral volumes increased 4.6%. In terms of organic, in the center of this slide, after reporting a decline in comparable revenue of $3,100,000 in the first half, the performance of the comparable businesses improved materially in the second half, up $3,600,000 on the PCP. For the full financial year, comparable businesses experienced a 3.7% increase in average revenue per funeral, which was primarily influenced by a significant improvement in funeral mix from the final quarter of FY 2020, which was heavily impacted by the first wave of COVID-nineteen lockdowns and pricing.
As Alwyn noted earlier, death volumes were below long term historical trends in key markets in which the company operates with PROPEL's comparable funeral volumes decreasing by 3.5%. As you can see from the bottom right of this slide, the operating EBITDA margin was 30.1%, 90 basis points above the prior year. The margin was influenced by the financial metrics of recent acquisitions, improved gross margin and COVID-nineteen mitigation measures, including government wage subsidies and good cost control, with comparable operating expenses approximately 1% higher than FY 2020. As you can see on Slide 22, cash flows from operating activities increased by circa 27 percent to $27,200,000 This increase was partially due to no performance fee being paid in the 3rd calculation period versus $4,100,000 excluding GST in the prior year. Cash flow conversion remained strong at 101.8%.
In respect to investing activities, Propel deployed approximately $27,000,000 in cash in connection with acquisitions, including 2 separate property purchases, one of which was previously leased for $4,400,000 and incurred capital expenditure of $7,200,000 Maintenance CapEx amounted to 3.6 percent of revenue for the year. The financing activities largely reflect the net repayment of funds drawn down in Q4 of FY 2020 to increase the company's liquidity position during the initial wave of COVID-nineteen and dividends paid during the year. Moving to Slide 23, there are 3 main points on the balance sheet. One, as at year end, Propel had net debt of approximately $79,000,000 2, the 77 freehold properties owned by Propel are held at cost at approximately $121,700,000 dollars And 3, Propel's prepaid contract funds totaled approximately $46,000,000 The funds associated with prepaid contracts are largely invested with 3rd party friendly societies, who primarily invest the funds in cash and fixed interest. In accordance with accounting standards, the asset increases by the investment return generated during the reporting period and the liability increases by the financing charge.
The difference between those two amounts is recognized in the income statement. The contract turns atneed when the service is delivered at that time revenue is recognized and the liability is extinguished. During the year and consistent with FY 2020, prepaid contracts that turned at need in Australia accounted for less than 10% of the group's Australian funeral volumes. It should be noted that there are no prepaid funeral contracts in the New Zealand business. As Alwyn mentioned earlier and on Slide 24, we are pleased to announce that Propel has expanded its senior debt facilities with Westpac by $50,000,000 to 200,000,000 dollars and extended the maturity of all the facilities to October 2024.
The refinance of the senior debt includes an amendment to the net leverage ratio covenant, which must be less than 3.5 times unless the company elects to increase the covenant limit to 3.75 times, which endures for 3 consecutive testing dates, following which the covenant limit will reduce to 3.5 times. The group's current interest rate on drawn senior debt is below 2%. Turning to Slide 25, in respect of other capital management matters, as at 30 June 2021, Propel had total debt facilities of $150,000,000 and net debt of $79,000,000 After allowing for the additional $50,000,000 of debt raised and funds required for binding commitments, Propel has available funding capacity of approximately $108,000,000 In respect of its debt covenants, Propel remains comfortably in compliance as at 30 June 2021, reporting a net leverage ratio of 2.2 times. Earlier today, the Board declared a final dividend of $0.575 per share fully franked, resulting in total fully franked dividends of $0.1175 per share in connection with FY 2021, representing a payout ratio of approximately 81%. I'll now hand over to Fraser, who'll cover industry trends and acquisitions.
Thank you, Lily, and good morning, everyone. Some of you may be familiar with the graphs on Slide 27, which show that the number of deaths is forecasted both increase and accelerate in the countries in which PROPEL has operations, namely Australia and New Zealand. Debt volumes is the most significant driver of revenue in the death care industry. In Australia, the ABS forecasted debt volumes will increase by 2.7% per annum from 2019 to 2030 and 2% per annum from 2030 to 2,050, whereas in New Zealand, stats and that forecasted debt volumes will increase by 2% per annum from 2020 to 2,031 and 1.9% per annum 2,031 to 2,050. Few industries have the benefit of the certainty of that sort of tailwind.
However, debt volume growth is not necessarily linear and can fluctuate from time to time. As Alvin mentioned, social distancing measures, travel restrictions and increased focus on personal hygiene and effective flu vaccinations since the start of the pandemic may result in a deferral of death volumes into future periods. The funeral industry is highly fragmented in both Australia and New Zealand, with Propel the 2nd largest in both countries. Slide 28 shows how Propel's estimated market share in Australia based on reported number of funerals performed and estimated Australian deaths in 2020, has grown in the last 5 calendar years from circa 1.2% in 2015 to circa 7% in 2020. However, it is worth noting that notwithstanding that significant increase, approximately 70% of the market is still owned by entities other than Propel and the largest operator.
Turning to Slide 29. Propel remains focused on executing its core strategy of acquiring assets and social infrastructure, which operate in the death care industry. During the financial year 2021, PROPEL deployed approximately $30,000,000 on business acquisitions and properties in New Zealand with the Dils Group, Western Australia with Midwest Funerals, Queensland with pets our IP and in New South Wales. Since its IPO in November of 2017, Propel has deployed approximately $127,000,000 on acquisitions. The team remains very active in exploring both organic and inorganic growth opportunities.
The acquisition pipeline is strong, and with over $100,000,000 of available funding capacity, Propel is well positioned to continue consolidating what is a highly fragmented industry. I'll now hand back to Alvin.
Thanks, Fraser and Lily. As you can see from our presentation today, despite COVID-nineteen impacts, PROPEL has reported resilient results in FY 'twenty one and achieved growth in key financial and operating metrics. The company continues to operate in what is a stable, highly fragmented and essential service industry with assets and infrastructure that are difficult to replicate, which stands to benefit from favorable demographic tailwinds. Propel remains well funded to continue its acquisition led growth strategy and its founder led management team own approximately 19% of the company, ensuring a strong alignment with our fellow shareholders. As I flagged earlier, shareholders who participated in Propel's IPO have benefited from significant shareholder value creation through dividends and share price accretion, and again, we thank them for their continued support.
In summary, Propel has a strong track record, a stable and aligned management team, a defensive market position in a favorable sector thematic and is well funded. In terms of the outlook, PROPEL continues to be well positioned to generate sustainable long term growth and value creation. Although debt volume growth is certain, unavoidable and predictable over the longer term, it's not linear and it fluctuates over time. In other words, debt is certain, but its timing is not. Historical experience suggests that the below trended volumes in FY 'twenty one, particularly during the first half, should be temporary, given prior period declines have rebounded quickly, the unusually benign flu seasons in 2020 year to date in 2021 and the growing and aging population.
In that regard, PROPEL's comparable funeral volumes turned positive in the second half of FY 'twenty one, and this trend has continued into the start of the new financial year, with Propel starting FY 'twenty two with higher funeral volumes. In the month of July, the company performed a record number of funerals with total and comparable funeral volumes materially above July last year. However, it's still early in the new financial year and death volumes fluctuate over short time horizons, so caution is required when forecasting. In terms of the company's financial results, we expect to benefit from debt volumes reverting to long term trends, acquisitions completed to date and other potential future acquisitions, the company's strong funding position. That said, employment costs will increase primarily due to the recently completed management internalization and COVID related impacts are expected to continue, especially in hotspot areas where temporary lockdowns are implemented and strict funeral attendee limits are applied, as is currently the case in New South Wales, Victoria, the ACT and New Zealand.
However, our experience since the start of the pandemic indicates that the financial impacts of strict funeral attendee limits have been temporary, with funeral mix and average revenue per funeral generally rebounding quickly as restrictions have eased. This not only reinforces the value that society places on physical attendance at a funeral service as an important part of the grieving process, it also highlights the defensive nature, diversification and the social infrastructure characteristics of Propel's network of funeral homes, cremation facilities and cemeteries. In conclusion, and as I summarized at the outset, I think the 3 key takeaways from our presentation today are: 1, FY 'twenty one was another record year for PROPEL despite below trend debt volumes and COVID-nineteen impacts 2, PROPEL stands to benefit from death volumes reverting to long term trends. And in that regard, following a resilient FY 'twenty one, PROPEL has started FY 'twenty two with higher funeral volumes. However, COVID-nineteen related disruptions are expected to continue.
And 3, with a strong funding position and recently expanded debt facilities, Propel remains well positioned to continue consolidating what is a highly fragmented and essential service industry with favorable demographic tailwinds. With that, I'll hand back to our moderator, Rachel, to invite questions. Thank
There are no questions at this time. I'll now hand it back to Mr. CooTee for closing remarks.
Thanks, Rachel, and thank you all for joining today's call. Lily Fraser and I hope that you and your loved ones stay safe, And we look forward to catching up with some of you virtually over the coming days and to provide further updates on the company's progress as and when appropriate. Thank you.