InvoCare (ASX:IVC) share price jumps 9% after reporting strong first half growth

The InvoCare share price is on form on Monday…
The post InvoCare (ASX:IVC) share price jumps 9% after reporting strong first half growth appeared first on The Motley Fool Australia. –

The InvoCare Limited (ASX: IVC) share price has been a strong performer on Monday morning following the release of its half year results.

At the time of writing, the funerals company’s shares are up 9.5% to $12.25.

InvoCare share price jumps after profit rebound

Statutory Revenue up 13% to $260.9 million
Operating Revenue increased 13% to $257.3 million
Operating earnings before interest, tax, depreciation and amortisation (EBITDA) up 31% to $63.6 million
Operating EBIT up 46% to $39.4 million
Reported Profit After Tax of $44 million, compared to a loss after tax of $18 million
Operating earnings per share up 57% to 14.4 cents
Interim fully franked dividend of 9.5 cents per share

What happened in FY 2021 for Invocare?

For the six months ended 30 June, InvoCare returned to form thanks to a continued recovery in the value of its funeral case average, continued growth in memorialisation sales in the Cemeteries & Crematoria business, and a strong contribution from acquisitions in the Pet Cremations business.

This resulted in a 13% increase in operating revenue to $257.3 million during the half and an even better 46% lift in operating EBIT. Management notes that cost control was a particular feature in the half and underpinned a return to positive operating leverage.

Another positive boosting the InvoCare share price could be its strong cash balance. Thanks to actions taken at the height of COVID, the company ended the period with a sizeable cash balance of $131.2 million. It also reported a strong operating cash flow result, translating to a cash conversion ratio of 102%.

What did management say?

InvoCare’s CEO, Olivier Chretien, said: “While the operating conditions have not fully returned to pre-COVID levels, it is pleasing to see how resilient the business and our people continue to be, and the operational performance they can deliver when conditions allow.”

“We shared our strategy with investors in May, and we have hit the ground running, with a number of key achievements during the period. Our initial focus has been on further strengthening our business foundations, and we are pleased with the momentum that our teams have established in the half.”

What’s next for InvoCare in the second half?

Management notes that the emergence of the COVID Delta strain in June and the associated government response in Australia is expected to lead to a softening of the funeral services sector in the second half of 2021,

Given that the extent of restrictions remain uncertain, the company is unable to provide earnings guidance for the full year. Nevertheless, management remains confident about the long-term potential of the business, with future growth supported by population and ageing trends in its markets.

Mr Chretien said: “The persistent and sudden impacts of COVID restrictions on consumer confidence and our operating model, as evidenced in the past two months, will continue to restrict our businesses and people in realising the Group’s full potential, but our first half results demonstrate the strength of this organisation when conditions permit.”

“Our focus will be on what we can control, and we remain extremely confident in our team’s capability and the Group’s potential in maintaining the momentum on this phase of our strategy of Raising the bar,” he concluded.

The InvoCare share price is now up 5% in 2021.

The post InvoCare (ASX:IVC) share price jumps 9% after reporting strong first half growth appeared first on The Motley Fool Australia.

Should you invest $1,000 in InvoCare right now?

Before you consider InvoCare, you’ll want to hear this.

Motley Fool Investing expert Scott Phillips just revealed what he believes are the 5 best stocks for investors to buy right now… and InvoCare wasn’t one of them.

The online investing service he’s run for nearly a decade, Motley Fool Share Advisor, has provided thousands of paying members with stock picks that have doubled, tripled or even more.* And right now, Scott thinks there are 5 stocks that are better buys.

*Returns as of August 16th 2021

More reading

These are the 10 most shorted ASX shares

These are the 10 most shorted ASX shares

These are the 10 most shorted ASX shares

Motley Fool contributor James Mickleboro has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has no position in any of the stocks mentioned. The Motley Fool Australia has recommended InvoCare Limited. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.

Trade The World Anywhere & Anytime!

Mobile app platform with over 50,000 global listed securities across 12 markets (over 70% global market capitalisation), right from your Android or iOS device.

Integrated with exclusive trading idea and investment analysis tools to help you find actionable insight on virtually every financial instrument across our 12 global markets, to help you optimise your trading strategies.

Refer Your Friends

Tell your friends about Monex and gift them FREE access to our trading tools.

We respect your privacy and will only send this one email notification to your friends. 

Share With Your Friends

Share on facebook
Share on twitter
Share on linkedin

Monex Trading Tools Access and Usage Terms

The Monex Trading Tools (referred to as ‘tools’ hereafter) are available to you inside your client portal;

To activate access to the tools, you must have a verified and approved trading account and have made a deposit of at least AUD $1000.

An active and funded account with a positive trading balance is required to continue to have access to the tools;

Although the tools are available to you indefinitely, Monex Securities may at it’s discretion disable access to the tools in the future;

Monex securities reserves the right to change these terms and conditions from time to time, as it sees fit, without notice.

Important Notice
iOS & Android App - 12 International Markets & Over 70% Global Market Cap. $0 Brokerage On US Trades. Click Here!