Christchurch crematoriums fire up InvoCare's annual income

Tue, 17th Feb 2015

FYI, this story is more than a year old

InvoCare, Australia's largest undertaker, said its New Zealand unit earnings jumped up 24 percent after it bought two Christchurch crematoriums.

The ASX-listed company's New Zealand earnings before interest, tax, depreciation and amortisation was A$7.7 million in the year ended Dec. 31, up from A$6.2 million a year earlier, the company said in a statement. Sales rose 17 percent to A$37.6 million, while margins increased to 20.4 percent form 19.3 percent.

Last July, the Commerce Commission cleared the way for the Sydney-based funeral parlour, cemetery and crematorium operator to buy the 70-year old Cremation Society of Canterbury via its Bledisloe New Zealand business, and adding two crematoriums to its local network. InvoCare set up its New Zealand subsidiary in 2007 and bought Bledisloe in 2010 for an enterprise value of A$114 million. The group has been expanding its New Zealand holdings, acquiring four funeral parlours in 2013 and bringing its total to 30 businesses across the country.

InvoCare expects the number of New Zealand "fiscal deaths" to increase to more than 52,500 annually by 2050, from around 30,250 now.

Overall, InvoCare's group Ebitda rose 8.7 percent to A$46.2 million, while profit rose 12 percent to A$54.5 million. Sales increased 7.2 percent to A$413 million, which were "primarily related to higher number of deaths and InvoCare's overall market share has remained relatively flat since December 2013, after arresting some of H2 2013 declines," the company said.

The company claims to be the largest private funeral services operator in the Asia Pacific region, with operations in Singapore. InvoCare entered the west coast of the US as a small operation, which it said "represents a low cost and low risk entrance into a new market, with potential significant future upside."

The board declared a final dividend of 20.75 Australian cents per share, payable on April 2 with a March 12 record date. That takes the annual payout to 36.5 Australian cents per share.

Shares of InvoCare fell 0.2 percent to A$13.24 and have gained 9.7 percent since the start of the year.