REPORTING SEASON: Invocare Limited (IVC)

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Figure 1: Invocare Limited 12 month chart

 

InvoCare Limited (IVC) reports record first half earnings but profit hit by expansions

– InvoCare (IVC) Largest funeral, cemetery and crematorium operator in Australia, New Zealand and Singapore posted a lift in revenue over the first half of 2015 helped by a 2.5% lift in funeral case volumes. InvoCare’s profit was hit by higher operational costs and the one off costs associated with the acquisition and transformation its new US chain.

– IVC’s new CEO Martin Earp, started on the 1st of May 2015, stated that: “The business remains robust, with good results in the comparable operations, in Australia and Singapore.

– Over the last 2 years Invocare has seen competition building in the industry as new entrants win market share and push service costs down. However the aging population (with the number of Australians aged over 65years expected to double by 2055) and an average annual increase of 1% in the number of deaths over last 30 years the market continues to grow. The introduction of prepaid services has also grown the business in Australian with approximately 15% of all IVC Australian funerals now being prepaid.

– The company stated that its comparable sales for July increased by 5.9%. IVC expects the losses from its US unit to grow to US$3M by the end of FY15 as it spends more on understanding the business. IVC expects FY15 CAPEX will reach approximately $24M.

– Invocare will pay an interim dividend of $0.1575, unchanged (Y/Y) on October 9 2015.

 

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Juliana Roadley, Market Analyst,