Facebook for the dearly departed? Funeral provider InvoCare is planning to digitally expand its business to the afterlife after announcing a full year profit rise of 65 per cent.
The largest private funeral, cemetery and crematorium operator in the Asia Pacific region, InvoCare in January this year invested $5 million in the HeavenAddress website.
InvoCare says the site already attracts one third of all funeral internet traffic in its three markets of Australia, New Zealand and Singapore, and will use the investment to finance the next phase of development to make HeavenAddress.com a global memorials website.
“Our industry is about as far removed from technology as you can get,” said chief executive Andrew Smith.
Younger generations had been alienated from the memorialisation process, he said, and were now able to use social media platforms they were comfortable with to leave a virtual message for a loved one.
“We’ve seen it grow from next to nothing to a million hits a year, and I can see it hitting two million hits a year before the end of 2013,” Mr Smith said.
The company reported its net profit rose to $44.5 million in the year to December 31 from $27 million in 2011, while sales revenue rose 14.8 per cent to $368.7 million.
It said the growth was driven by market share improvements, an increased number of deaths, annual price changes and higher funeral costs.
New Zealand market leader Bledisloe, which InvoCare acquired in June 2011, made a full year contribution of $69.3 million.
Other acquisitions include Geelong-based Tuckers Funerals and Bereavement Services in December 2012, and Auckland operator Resthaven Funerals in February, and plans are on track to open four new sites in Sydney, Adelaide, Brisbane and NZ.
Mr Smith said domestic acquisitions would continue, although breaking into the Asian market has proved difficult.
“Singapore is our foothold into the rest of Asia, but we need to find the right joint venture partner,” said Mr Smith.
“We’ve been looking for one for three years and we’ve been unsuccessful.”
He said markets such as Hong Kong were tough to crack as mainland Chinese operators charge commercially unviable prices.
The positive profit result came despite the company reporting increased funeral prices late in 2012, along with scheduled cemetery and crematoria price rises during the first quarter of 2013.
The number of deaths for the first six weeks of 2013 has been flat year on year, but Mr Smith said the overall death rate would rise.
“Populations are ageing in and the baby boomer generation is coming through in larger numbers every year,” he said.
“We’re currently at a death rate of around one to 1.4 per cent, and that will see an increase to 2.7 per cent by 2033.”
Subject to the death rate, InvoCare expects to continue growth of six to seven per cent in general revenue and eight to nine per cent in earnings before interest and tax.
Invocare declared a final fully-franked dividend of 19.0 cents per share, up from 16.25 cents in 2011.
