strategic viewpoint on IVC, page-17

No - it is not all doom and gloom. In fact there is a significant upside factor, though analysts seem to be missing it. And that is IVC's "float" - there Funds under Mgmt. At their half-year they had $600m of Pre-Paid funds, with only $488m declared as a liability (ie; the funds ear-marked to have to be paid out). Those who read Warren Buffett will know the value of Float - particularly where you are getting in more than you need - free money. As such, IVC are running approx 18% on the upside, with FUM Assets growing at a compounding rate of 9.5%, while FUM Liabilities are growing at a lesser compounding rate of 8%.

In addition, IVC are rather conservative on their FUM allocations (probably too much), with 19% in Equities, 23% in Property and the remaining 58% in Cash and Fixed Interest. Though the impact of each year's Net Profit will fluctuate as IVC will have to Mark-to-Market the value of their investment portfolio on the last day of their FY (something that Warren constantly complains about as it does not give a true representation of the Float return), IVC's returns on their FUM have been growing exponentially over the last 5 years with their goal to achieve around 12% per year (they did 11.6% on their last FY.

With Pre-Paid making up 14.5% of all new Funeral services - and which is growing approx. 5% y-on-y, as along as they continue to grow this (noting their goal is to increase their existing market-share from the mid-20% to mid 30% through their Protect and Grow plan, along with their Regional acquisitions pushing it upwards to 40%), the "gem" for IVC is their FUM.

And the best bit - even if their is a declining death rate in some years, that means IVC can hang onto the Pre-Paid FUM for longer and continue to earn good returns with someone else's money.

I have a significant position in IVC, and will grow it after it goes ex-Div (expect to see a price drop then). Also - note the 2% DRP discount rate that will be applied to the average share price between the 10th and 21st of Sept. That's a nice sweetner