CBD
Andrew Smith, the chief executive of funeral business InvoCare, seems to have come down with a bad dose of Auric Goldfinger syndrome.
Spy flick fans may recall Goldfinger as the villain who uttered the immortal line "No, Mr Bond, I expect you to die," as a laser beam inches its way towards the groin of James Bond (played on this occasion by Sean Connery).
Despite Goldfinger's expectations, death did not claim secret agent 007 and it looks like a whole bunch of Australians have also succeeded in evading the Grim Reaper's scythe.
On Tuesday InvoCare said a lower than expected number of deaths, "particularly in Sydney and New Zealand", was partly responsible for a fall in profit.
In its slide pack, under "operational highlights", the company even provided a couple of handy graphs showing movements in the death rate. The stubborn resilience of the human spirit cost InvoCare $600,000 (after tax), with "increased costs" driving the rest of the fall in operating earnings, which fell from $19 million to $17.2 million.
End of discussion
Nothing like an elephant in a room to keep the discussion - or lack or it - lively. Taking their turn in front of analysts on Tuesday as part of the annual results show-and-tell were the managers of two Commonwealth Bank property funds, CFS Retail and Commonwealth Property Office Fund (CPA), that are the subject of an internalisation proposal. To try to pre-empt questions, Angus McNaughton of fund manager Colonial stated upfront that the subject was not going to be discussed.
Cue cranky analysts who tried their best to squeeze some information from the CBA stone. Simon Garing from Bank of America Merrill Lynch led the charge, saying that surely it (the internalisation) was the more pressing issue that should be given oxygen. John Kim of CLSA and Rob Stanton from JP Morgan backed him up - to no avail.
Garing conceded that CPA did have a lot of transparency in its annual results release, saying "it smacks of being a DD [due diligence] room in public".
"It is too early to talk about a preliminary, incomplete and indicative proposal" was the boilerplate response from fund management.
Hawk ruffles Pies
Feathers have been ruffled in the stoush between competition regulator Rod Sims and Eddie "Everywhere" McGuire (pictured), the president of AFL powerhouse Collingwood.
Sims turned McGuire even more puce than usual on Tuesday when the ACCC stung the Pies with a $20,400 infringement notice over a misleading membership offer.
The ad offered a three-game membership and a Collingwood guernsey for $20 - but on closer inspection fine print revealed the price was actually $120.
While McGuire is such a Magpie diehard he bleeds black and white, it's also true that Sims is a dedicated fan of the Hawthorn Hawks.
Although McGuire declined to comment about the Pies membership when BusinessDay's reporter called on Tuesday, he was rather more voluble about Hawthorn's members back in the day.
Referring to a recurring jibe that Hawthorn's membership figures were inflated by signing up pets, McGuire suggested that "maybe they should shut the zoo".
That was in 2000 and Sims yesterday poured cold water on any suggestion he was taking long-delayed revenge.
"Yes, I do admit I have been a Hawthorn supporter since 1957, but I cannot even remember Eddie's zoo comment, so there is no conspiracy here," he said. "This was a blatant breach of the act and we feel very strongly that consumers are making a purchase that they would not have otherwise made if they knew the full costs."
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Frequently Asked Questions about this Article…
InvoCare said a lower-than-expected number of deaths, particularly in Sydney and New Zealand, was partly responsible for the profit drop, alongside increased costs. Operating earnings fell from $19.0 million to $17.2 million, and the lower death rate cost the company about $600,000 after tax.
Funeral businesses depend on the number of deaths for demand. A lower-than-expected death rate reduces the number of services and revenue. InvoCare even included graphs in its results showing movements in the death rate, illustrating how sensitive earnings can be to demographic trends.
Not necessarily. The company attributed the fall to temporary factors — fewer deaths in certain regions and higher costs — rather than a structural problem called out in the article. Investors should watch upcoming death-rate trends, cost control measures, and future results to see if the weakness persists.
Managers from Colonial, which runs the funds, avoided discussing the internalisation proposal at the annual results presentation. Angus McNaughton said the topic was not going to be discussed, and fund management used the standard line that it was too early to talk about a preliminary, incomplete and indicative proposal.
While CPA's annual results contained a lot of information, some analysts felt detail around the internalisation proposal was limited. One analyst said the release smacked of being a due-diligence room in public, and fund managers declined to expand on the matter during the presentation.
The ACCC issued an infringement notice of $20,400 to Collingwood over a misleading membership offer. The ad promoted a three-game membership and a guernsey for $20, but the fine print revealed the actual price was $120, which the regulator called a blatant breach of the law.
The ACCC action highlights regulatory and reputational risk. Even a relatively small penalty signals that consumer protection rules are enforced and that misleading advertising can lead to fines and negative publicity. Investors should factor in potential compliance costs and reputational fallout when assessing such organisations.
Analysts will probe material issues like internalisation proposals, but management may refuse to comment if a matter is preliminary. For investors, this means reading the official disclosures closely, watching analyst questioning for implied concerns, and being prepared for periods of limited commentary on sensitive corporate actions.
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