Invocare Limited (ASX: IVC) has released its full year results to the market, for the period ending 31 December 2019. The business has accounted for the change in accounting standards and revised its results for FY18 as well, for comparison sake. Once normalised for AASB16, IVC delivered underlying EBITDA came in at $117.8m (with consensus expecting $141m) and revenue at $477.8m (with consensus expecting $519m). However, looking at the most relevant number, earnings per share, was a beat on consensus expectations at 51.7 cents per share. The business has also announced a full year dividend of 41cps – a 79% payout ratio, which compares to consensus expectations of 39cps.
Invocare Limited (ASX: IVC) has released its full year results to the market, which comprised of an EBITDA miss, but an earnings per share beat on consensus expectations. The market reacted favourably, with the share price surging 13%. (Credit: eziFunerals).
Invocare has embarked on a Protect and Grow project, which is now three years in. The business has spent a total of $106m of the guided $200m. IVC is closely monitoring its cost line and controlling underlying expenses growth at 2.8% - contributing to that EBITDA number.
A strong flu season can provide an uplift to IVC’s earnings, as the company derives operating leverage from carrying out more funerals. On the contrary, a mild winter can have the company see moderated earnings. This seasonality adds slight uncertainty and lumpiness to earnings, which investors are comfortable to see through.
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