Wednesday 16th August 2017
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Invocare, the largest private funeral, cemetery and cremation operator in the Asia Pacific region, lifted its first-half earnings in New Zealand by 21 percent, assisted by a rising death rate.
Earnings before interest, tax, depreciation and amortisation increased to $4.8 million in the six months ended June 30, from $4 million a year earlier, the Sydney-based company said in a statement to the Australian Securities Exchange. Sales rose 7.3 percent to $23.9 million while expenses advanced 4.2 percent to $19.2 million, helping the operating margin increase to 20.2 percent from 17.9 percent.
Invocare operates 19 funeral home brands across New Zealand, which it counts as its second-largest market after Australia, and ahead of operations in Singapore and the US. In the latest period the company benefited from a 5.7 percent lift in case volumes to 2,785 and noted the number of deaths in New Zealand had increased 1.2 percent on a rolling 12-month basis, ramping up in the last six months.
"Overall performance has been strong with increasing case volumes and market share stable in a competitive market," the company said in presentation slides posted to the ASX with its first-half results.
The company noted that its market share remained stable in New Zealand and that its competitors continued to discount prices in regional areas.
Invocare said it had completed a major upgrade of its Christchurch Academy funeral facility in March, which contributed to its volume improvement. Its other brands in New Zealand include Beth Shan Funerals in Hawkes Bay; Gee and Hickton Funeral Directors in Lower Hutt, Upper Hutt and Porirua; Cleggs Funeral Services in Hawera; Elliotts Funeral Services in the Bay of Plenty; Forrest Funeral Services in East Coast Bays and the Hibiscus Coast; H Morris Funeral Services in Northcote, Auckland; James R Hill Funeral Directors in Hamilton; Sibun Funeral Directors in Auckland; Resthaven Funerals in Howick and Manurewa; Pellows Funeral Directors in Hamilton; Wairarapa Funeral Services; Lychgate Funerals in Wellington; John Rhind Funeral Services in Canterbury; Vospers Funeral Services in Taranaki; Geoffrey T Sowman Funeral Directors in Marlborough; Fountains, Funerals and Monuments in South Auckland; and the Simplicity Funerals chain.
Invocare's parent company in Australia posted a 14 percent lift in first-half operating earnings after tax, which excludes asset sales, asset impairments, impacts of undelivered prepaid contracts and non-controlling interests, to A$24.5 million.
Its operating ebitda lifted 9.9 percent to A$51.9 million, which it said reflected increases in the case averages of 5.7 percent and improved operating cost control, helping the group operating margin increase 180 basis points on the year earlier period. It will pay an interim dividend of 18.5 Australian cents per share on Oct. 6, up 1.5 cents on the year earlier period.
Its Australian listed shares rose 4.9 percent to A$14.88.
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