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IVC, INVOCARE LIMITED
nipper
post Posted: Jan 6 2021, 07:05 PM
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QUOTE
Funeral homes and cemeteries operator InvoCare Limited (ASX: IVC) had a rollercoaster year in 2020. The InvoCare share price fell as low as $9.07 in March 2020, after climbing to its 52-week high of $15.79 only a month earlier.

The share price is currently trading at $11.44 ... which is still almost 30% off its highs of last year.

How did InvoCare do in 2020?
For its half year ending 30 June 2020, InvoCare produced revenue of $226 million which represented a 6.2% decline over the prior corresponding period. That resulted in a bottom line net loss of $18 million, compared to a $41 million profit in the same FY19 period.

The key driver in declining revenue was primarily COVID19 restrictions on the number of attendees at funerals.

The company also said that, ironically, social distancing and increased focus on hygiene in the wake of the pandemic led to a virtually non-existent flu season and significantly lower mortality rates in calendar 2020. This further drove down company revenue.

To keep the business steady in the first half of 2020, InvoCare completed a $274 million equity raising to reduce net debt and increase its liquidity.

Things were starting to look up in the second half however, with the company announcing the acquisition of two pet cremation and after life care businesses worth around $50 million.

Tailwinds for the InvoCare share price in 2021
Death is one of the few certainties in life, and InvoCare dominates the Australian funeral and death care industry.

As the largest provider of funeral, cemetery, and crematorium services, the company has taken a revenue market share of around 36% in Australia and 18% in New Zealand.

While death rates fluctuate from year to year, they tend to converge to a stable average over the long run. This is because mortality rates are a simple function of the population size, average age, and life expectancy of a country.

Given Australia’s ageing population, it is expected that the mortality rate in Australia will be around 2% per year over the next decade. This is expected to accelerate beyond 2030, providing InvoCare with a steady stream of future revenue.

InvoCare believes that conditions in 2020 represent a blip, and that death rates and revenues will return to normal over the near term.

Also underpinning InvoCare’s prospects is the belief that its customers, typically the family of the deceased, are relatively price insensitive given the highly emotional context surrounding the death of a loved one. This means people are less likely to shop around and compare prices for funeral services than they would be for other services.

...the Mottled Ones



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"Every long-term security is nothing more than a claim on some expected future stream of cash that will be delivered into the hands of investors over time. For a given stream of expected future cash payments, the higher the price investors pay today for that stream of cash, the lower the long-term return they will achieve on their investment over time." - Dr John Hussman

"If I had even the slightest grasp upon my own faculties, I would not make essays, I would make decisions." ― Michel de Montaigne
 
mullokintyre
post Posted: Aug 19 2020, 09:47 AM
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Now that reporting has started in earnest, we van see just how much COVID 19 has affected business.
IVC would, one might think, be somewhat immune from this.
But, kinda surprisingly, actual deaths in OZ are down about 2% from the previous year.
Perhaps COVID was getting people before something else did.
There was also a big fall in prepaid funerals.
Guess this was not surprising.
Revenue was down 6%, as they couldn't have the big funereals, with no Limo's, expensive glossy booklets. or the nice banquets for the mourners.
But after a capital raising, debt is well down, and they look poised to resume bisiness as usual sometime in the future.
Paying a reduced dividend, but that is hardly surprising.
Will continue to hold as along term investment.
Mick



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sent from my Olivetti Typewriter.
 
nipper
post Posted: Jun 20 2020, 04:57 PM
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Livewire Markets: Dean, death and taxes ... two of life's unavoidables. InvoCare manages to specialise in one of them. Buy, hold, sell?
QUOTE
Dean Fremder (Perpetual): It's a hold for us. Clearly, a very defensive and attractive industry. You don't need to worry about whether your customers will turn up, which is a nice thing. So InvoCare, they dominate the space, clearly something with great long-term earnings potential.

What keeps us a little bit at bay is, we're still waiting to see the returns from their big capex investment programme in recent years. You've seen some announced senior management turnover recently, and the stock's quite expensive still, so we'll sit on the sidelines for now.

Livewire Markets: Okay. Simon, the company did raise more than $200 million recently to strengthen its balance sheet, pursue some potential growth optionality. Is there fun in funerals? Buy, hold, sell?
QUOTE
Simon Conn (Investors Mutual): Fun in funerals, well, at least you can go to a funeral now whereas for a couple of months, you couldn't, which I think was making for huge uncertainty. But look, actually, I think I'm quite positive on the new management team. There's a new chairman who I know from previous other companies. There's a new CFO, just been announced today, who I have high regard for.

Look at the low $10s, when you can get a 4 per cent yield on a pretty solid balance sheet and a pretty recurring predictable business, I think it was a buy. Around the mid $11s, it's probably a hold. But if you can buy it in that low $10 price range, I think it's a good business. They have been spending a lot of catch up capex, but that will come to an end in 12, 18 months time. And I think when that comes through that business will start generating more cash going forward. Pretty defensive business, pretty boring, but pretty safe in these times.




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"Every long-term security is nothing more than a claim on some expected future stream of cash that will be delivered into the hands of investors over time. For a given stream of expected future cash payments, the higher the price investors pay today for that stream of cash, the lower the long-term return they will achieve on their investment over time." - Dr John Hussman

"If I had even the slightest grasp upon my own faculties, I would not make essays, I would make decisions." ― Michel de Montaigne
 
mullokintyre
post Posted: Jun 15 2020, 10:44 AM
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Funerals can have up to 100 people in Queensland as of tomorrow according to the QLD Premier..
Won't be long before the others follow suit.
Will be good for IVC, as more mourners mean bigger rooms, more staff, more afternoon tea etc.
Down today which is perhaps a little surprising.
Might add some more.
Mick



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sent from my Olivetti Typewriter.
 
mullokintyre
post Posted: Apr 14 2020, 09:17 AM
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IVC in trading halt pending a capital raising. SPP to follow.
Bet it won't be the only co strengthening its balance sheet in this environment.
Mick



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sent from my Olivetti Typewriter.
 
mullokintyre
post Posted: Mar 25 2020, 11:13 AM
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In Reply To: nipper's post @ Mar 25 2020, 11:09 AM

Ask me next week.
Have been sent a link for teamviewer to livestream a funeral on Saturday or a young 23year old killed last week.
At least I won't have to wear a suit.
Mick



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sent from my Olivetti Typewriter.
 


nipper
post Posted: Mar 25 2020, 11:09 AM
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In Reply To: mullokintyre's post @ Mar 25 2020, 10:13 AM

social gathering restrictions clearly will affect them!
Just how do you livestream a funeral?




--------------------
"Every long-term security is nothing more than a claim on some expected future stream of cash that will be delivered into the hands of investors over time. For a given stream of expected future cash payments, the higher the price investors pay today for that stream of cash, the lower the long-term return they will achieve on their investment over time." - Dr John Hussman

"If I had even the slightest grasp upon my own faculties, I would not make essays, I would make decisions." ― Michel de Montaigne
 
mullokintyre
post Posted: Mar 25 2020, 10:13 AM
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In Reply To: mullokintyre's post @ Mar 10 2020, 09:15 AM

Well, I got that wrong!
Down 17% today following a announcement that CV is impacting their business (but they dont know how much).
So I bought some more.
Mick



--------------------
sent from my Olivetti Typewriter.
 
mullokintyre
post Posted: Mar 10 2020, 09:15 AM
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Bought in to IVC this morning.
Their business will not slow down, on the contrary there will be a spike in business courtesy of coronavirus.
Has fallen sharply with the big sell off, so reckon its got some value/
Mick



--------------------
sent from my Olivetti Typewriter.
 
nipper
post Posted: Aug 15 2019, 07:06 PM
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In Reply To: henrietta's post @ Aug 15 2019, 05:18 PM

Paws for thought, though.



--------------------
"Every long-term security is nothing more than a claim on some expected future stream of cash that will be delivered into the hands of investors over time. For a given stream of expected future cash payments, the higher the price investors pay today for that stream of cash, the lower the long-term return they will achieve on their investment over time." - Dr John Hussman

"If I had even the slightest grasp upon my own faculties, I would not make essays, I would make decisions." ― Michel de Montaigne
 
 


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