MENU

InvoCare Limited (ASX:IVC) makes yet another acquisition

Market-leading funeral business InvoCare Limited (ASX: IVC) has continued its acquisition streak by announcing yet another purchase today.

Today it announced that it would be acquiring Grafton & District Funerals and Clarence Valley Funerals in New South Wales, together known as Grafton & District Funerals.

The two locations serve the Clarence Valley region of New South Wales and conducts around 300 funeral services and generates revenue of approximately $2 million per year. The assets purchased include two fully equipped funeral homes with mortuaries, freehold properties and prepaid contracts.

Grafton & District Funerals has been serving the local region for 35 years and gives InvoCare the opportunity to acquire a quality business to support its expansion into regional markets.

InvoCare will fund this acquisition from existing financing facilities.

The CEO and Managing Director of InvoCare, Martin Earp, said “Grafton & District Funerals provides InvoCare with a strategic opportunity to enhance our business and continue the growth of our regional strategy on the North Coast of NSW. We are excited that Jim Summers, General Manager, has selected InvoCare to continue the legacy of Grafton & District Funerals in the Clarence Valley region and welcome the team and the local community to our business.”

Is InvoCare a buy?

As a reminder, this means InvoCare has now acquired:

  • English Rose with $0.7 million of revenue
  • Lester & Son with $3.5 million of revenue
  • Hope & Sons with NZ$5.8 million of revenue
  • Whitestone with NZ$1 million of revenue
  • Southern Highlands with $0.7 million of revenue
  • J A Dunn with $1 million of revenue
  • Archer & Sons with $2.4 million of revenue
  • And now Grafton & District Funerals with $2 million of revenue

This means InvoCare has acquired annualised revenue of around $16 million, which suggests perhaps a 3.5% increase on FY17’s revenue, which could be a nice boost to FY19.

InvoCare is trading at 25x FY18’s estimated earnings. This isn’t cheap. Rising interest rates and a worse-than-expected report this month could send the share price backwards. I won’t be buying until after the report, but there’s a good chance that I will buy for the long-term tailwinds.

Another growth share on my radar is this top stock which is predicting profit growth of 30% this reporting season.

The best dividend stock to buy in August

Financial year 2019 is here and The Motley Fool’s dividend detective Andrew Page has revealed his must buy dividend share to grow your wealth in FY19.

You might not know this market leader's name, but it's rapidly expanding into a highly profitable niche market here in Australia. Even better, the shares boast a strong, fully franked dividend that should balloon in the years to come. In other words, we're looking at the holy grail of incredible long-term growth potential AND income you can watch accruing in your account in real time!

Simply click here to grab your FREE copy of this up-to-the-minute research report on our #1 dividend share recommendation now.

Motley Fool contributor Tristan Harrison owns shares of InvoCare Limited. The Motley Fool Australia has recommended InvoCare Limited. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

Two New Stock Picks Every Month!

Not to alarm you, but you’re about to miss a very important event! Chief Investment Advisor Scott Phillips and his team at Motley Fool Share Advisor are about to reveal their latest official stock recommendation. The premium “buy alert” will be unveiled to members and you can be among the first to act on the tip.

Don’t let this opportunity pass you by – this is your chance to get in early!

Simply enter your email now to find out how you can get instant access.

By clicking this button, you agree to our Terms of Service and Privacy Policy. We will use your email address only to keep you informed about updates to our website and about other products and services we think might interest you. You can unsubscribe from Take Stock at anytime. Please refer to our Financial Services Guide (FSG) for more information.