Earnings at Australia’s InvoCare, the largest private funeral operator in the Asia Pacific, have suffered because of a lower than expected death rate.
The company says it was operating in a challenging environment with a “slow down in growth of deaths in all key markets”.
The news sent InvoCare’s shares down 4% to $13.99.
Overall sales, including acquisitions, were up 3.1%, $6.4 million, to $214.5 million in the half year. Reported profit after both tax and outside equity interest increased 50.6% to $27.8 million.
In the six months to June, the number of deaths was down 0.3% for Australia, Singapore and New Zealand compared to the same period in the previous year.
This meant the number of funerals fell by 2.2%.
However, deaths for Australia are forecast to increase, peaking in 2034 at a growth rate of 2.8%. The trend for both New Zealand and Singapore is also for growth.
Here’s the forecast death rate in Australia:
“The business has performed well in challenging trading conditions,” says CEO Martin Earp.
“The focus for the second half of the year will be on continuing to manage our costs and putting in place revenue generating activities, whilst also continuing to fund initiatives for longer term value creation.”
The company declared a fully franked interim dividend of 17 cents a share, up 1.25 cents, or 7.9%, from 2015.