Australia’s largest provider of death care services, InvoCare, issued a statement on their 2021 Year End results last week.  In that statement they announced that they had returned to profitability with an after-tax profit of AUS $ 80.2 million (US$ 57.2 million) after going through the drastic Australian lock-down year of 2020 with a loss of AUS $11.5 million (US$ 8.42 million).

The company also announced that revenue grew 11% in 2021 to AUS $532.5 million (US $ 389.9 million).  That revenue number would make InvoCare the #2 death care services company in North America behind giant Service Corporation International  (US $ 4.1 billion in 2021 revenue).  For comparison sake, Carriage Services reported 2021 revenue of US $375.9 million and Park Lawn Corporation reported 2021 revenue of US $290.5 million.

It’s also interesting to note that while InvoCare reported funeral case volume up 2.2% for 2021 and revenue per case up 3.8% for 2021, the real drivers of the increased profitability seemed to be pet cremations and the amount of revenue the company is making on what they call FUM (Funds Under Management) on prepaid funeral contracts.

As for the pet cremation segment of their operations this article from Market Index states “Management flagged pet cremations as the fastest-growing segment in the business with a growing number of Australians wanting to “humanise” their pets by retaining their ashes, as opposed to disposing of a cat or dog with a shovel. . . . . .In 2021 the group undertook 87,440 pet cremations at an average price of $338.” According to our calculations at Funeral Director Daily that is over AUS $29 million in pet cremations (US $22 million).

Here is a 2020 article from Funeral Director Daily on a couple of large pet cremation acquisitions by InvoCare that totaled a reported acquisition price of AUS $49.8 million.

As for Funds Under Management with prepaid funerals, InvoCare reported a profit gain of AUS $44.1 million (US $32.3 million) on these funds.  The article from Market Index notes, “Once the company takes into account the cost of funerals it will eventually provide for those who have chosen to prepay, management notes it now has “headroom” of $109m in those FUM.”

Finally, it appears that death care personnel is difficult to find in Australia as well as in North America.  InvoCare notes in their report that they have 50 un-filled full-time positions available in their company.

Here is a video presentation of InvoCare’s 2021 Annual Report.

Funeral Director Daily take:  I have a couple of observations after seeing this press release.  The first one is that I think of one of my friends in the major brand car dealership business.  He once told me that he had six profit points — new car sales, used car sales, financing, auto repairs, leasing, and collision repair – to earn his profits from.  At any given time one or two would be performing at a high capacity to offset any poor areas of performance.  It helped to maintain profits as it was improbable that all divisions would be performing poorly at the same time.

Tom Anderson
Funeral Director Daily

With that line of thinking, it is interesting to me to see Australia’s largest death care services provider tell of profits in pet cremation and investment income leading to their profits instead of their “bread and butter” of funerals, cremations, and cemetery services.  I think something can be learned from this lesson about making sure we have alternative income sources as we move forward with our businesses.

The second thought that I have is “Will North America’s largest death care providers move into pet cremation?”  In December we told you of Service Corporation International’s acquisition of Schoedinger Funeral and Cremation of Columbus, Ohio.  The Schoedingers have been one of America’s leaders in “Pet Remembrance”.   I’m not even certain if the pet side of the business was included in the sale, but if it was maybe it will be a jumping off point in the business for Service Corporation International.

Access Holdings, the private equity company with finances behind funeral home and cremation operator, Foundation Partners Group is probably the closest thing at this time to being a national dual human/pet operator as since 2018 they have also been the driver behind Regency,  a budding national pet loss company.

More news from the world of Death Care:

• Helping families in time of need:  Albert Lea’s funeral homes have seen lots of changes in recent years.  Yahoo News
• What’s a “Natural Burial” and is it right for you?  KatieCouric.com
• Chicago Calling:  His career at a dead end, Irish centre dynamo “Geno” Cooney found a new life as a funeral director.  The Irish Echo (IL)
• Zelenskyy says Russians are carrying cremation chambers into the Ukraine.  HuffPost

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