Funeral group InvoCare hit by coronavirus social restrictions

New social restrictions announced on Tuesday have devastated the share price of funeral provider InvoCare.

InvoCare chief executive Martin Earp. Picture: Lyndon Mechielsen

Funeral service provider InvoCare’s shares have plunged by almost 15 per cent after the company announced it would be forced to cut back capital expenditure in response to the extension of restrictions implemented by the emergency national cabinet.

Prime Minister Scott Morrison’s new COVID-19 measures limit the number of people allowed at funerals to a maximum of 10, forcing funeral directors to radically change the way funerals are run and to find ways through which mourners can attend from a distance.

In an ASX announcement, InvoCare CEO Martin Earp said the company was focused on implementing a “series of contingency plans”.

“The current restrictions issued by the federal and state governments on social distancing will affect our ability to offer a full range of services to our client families,” Mr Earp said.

“We have live streaming/webcast and recording capabilities available in many locations. We want to ensure those family, friends and colleagues who are unable to attend a funeral service due to the current social distancing and quarantine requirements that they feel part of the farewell.”

At noon, the company’s shares had plunged by nearly 18 per cent to $9.18.

In addition, the Sydney-company said it would implement a “conservative approach” due to the impact the restrictions were having on the ability to provide a full range of services. The measures included the deferral of non essential capex, in addition to a hiring freeze and workforce optimisation.

InvoCare, which is capitalised at $1.31bn, employs 1,800 people globally across 290 funeral locations and 16 cemeteries. The company behind well known brands such as White Lady, Simplicity, Le Pine and Tobin Brothers.

InvoCare has collected a growing share of the highly fragmented funeral market over the past decade, acquiring dozens of mostly family-based brands. It has also pushed into cremation services for pets.