Australia’s largest funeral services company, InvoCare, covering funerals, adult cremation urns, among others, reported its bottom line at 2018 suffered due to better vaccination and a mild flu season, described by the company as ‘soft market conditions’, but told its investors that the market is returning to normal, and more Aussies will likely die in 2019.
InvoCare is the parent company of Simplicity Funerals and White Lady Funerals, as well as owning several other businesses across Australia, New Zealand and Singapore, covering services and products like memorials, adult cremation urns, and funeral services.
InvoCare CEO Martin Earp made a statement to the Australian Stock Exchange late in February, saying that the soft market conditions that affect the company’s operating results for 2018 were unlikely to stay, based on a historical basis, and that the market would, eventually, swing back to the positive long-term trend.
The company released their full year results in a report to the ASX immediately following that statement, which explains that an unusually mild winter flu season and particularly effective vaccination programs resulted in Aussie death rates dropping, but that the expectation is expected to return to the long term trend.
The report notes that two consecutive years of reduced deaths is extremely uncommon, with the last incident occurring in 1990 & 1991. The report also points out the improved trading in the Australian funeral business in the last 3 months of 2018 and January 2019 forecasted that the market would normalize, which would result in annual Aussie deaths going up by 50% by 2034.
The report also talked about, in detail, InvoCare’s Regional Acquisition Strategy. The company’s been busy buying up small funeral homes across the regional areas of Australia, as part of their plans to capitalise on the trend of retirees moving to the country in their advanced age.
Under the new strategy, the company will focus on select regional areas in the AU, which amount to about 19,000 deaths per annum, which is 38% of the total regional opportunity. The regional areas of Australia account for about 33% of all the country’s death, with a per annum of about 50,000.