The InvoCare Limited (ASX: IVC) share price is trading lower on Wednesday morning.
At the time of writing, the funerals company’s shares are down over 1.5% to $10.59.
This latest decline means the InvoCare share price is now down over 8% since the start of the year.
Why is the InvoCare share price trading lower today?
Investors have been selling InvoCare’s shares following the release of an update this morning.
That update provided colour on current trading conditions, its expectations for the future, and its new strategy.
In respect to trading conditions, in the near term, management notes that underlying growth remains in the low single digits. As a result, it will require a focus on services and adjacencies to grow its addressable market and operating leverage in order to deliver satisfactory returns.
It does, however, believe the longer-term outlook is more positive due to Australia’s growing and ageing population.
InvoCare revealed that it is resetting its strategy so it can better leverage its core assets. This will result in a shift in its business focus to simplify, standardise, and control costs. It will also see InvoCare seek to prioritise “share of value” and profitable growth instead of volume market share.
This follows underwhelming results from its previous Protect and Grow strategy. Since its launch in February 2017, the InvoCare share price has lost approximately a fifth of its value.
Whereas over the same period, the S&P/ASX 200 Index (ASX: XJO) has gained around 24%.
The company also spoke about new growth opportunities. These include new product developments such as “Green memorialisation”, digital engagement, business to business opportunities, the expansion of its cremator network, entering new territories, and property options.
It also sees opportunities in the pet cremations market following its recent acquisition. Management notes that pet ownership rates continue to grow, the humanisation of pets is increasing, and the industry is highly fragmented.
Overall, management appears positive on its long term prospects. Though, based on the InvoCare share price performance today, it appears that some investors aren’t as confident that the new strategy will be enough to turn things around.