InvoCare (IVC) downgrades on a lower death rate

Stock

InvoCare (IVC) $11.50 as at 8/10/2018

Event

Funeral home operator InvoCare warned the market about weaker than expected trends so far this year, saying that… In August, IVC reported that the funeral case volume for H1 (in the markets it operates in within Australia) had been soft (down 1.5% in Q2) and that if this situation continued in H2, it would negatively impact full year results. In simple terms, IVC saying that there has not been the volume of deaths they had forecasted, which is clearly good for some, but not so for IVC.  A mild winter and an effective flu vaccine contributing to the falling number of deaths, down 5.9% between June & August.

The company went on to say that market share has been growing, working to offset some of the fall in deaths. Currently they’re  looking at a $17m fall in revenue, as well as falling margins while “IVC is managing its cost base to mitigate the impact of those factors on its result.”

InvoCare (IVC) Chart

Market Matters Take/Outlook

The funeral game is a tough market to play currently, with milder weather and improving healthcare working to reduce the death rate globally.  IVC is trading around -4% lower today. We are bearish IVC targeting an eventual move towards $10