re: overall a good result The good news, is that anyone reading...

re: overall a good result The good news, is that anyone reading this, is still alive and has not become a customer of IVC.

The bad news is that revenue has fallen a bit from $72.2 million (6 months to 30/6/04) to $71.745 million (6 months to 30/6/05). IVC attributed this to a fall in number of deaths and new competition from a crematorium in NSW.

NPAT rose from $6.664 M to $7.835 M for the respective periods, due to lower expenses.

EPS at 8.2 cents is better than the previous 7.1 cents.

Annualised, EPS of 16.4 cents means a P/E of 25 at the current price of $4.10. This is a high P/E but IVC expects the second half to be better, as it was during the previous financial year.

Nevertheless, the share price appears fully valued (IMO). The period of undervaluation was clearly a year ago.

Liquidity position has deteriorated a bit, using current ratios as a gauge, due to the rise in current liabilities.

Gearing has risen due to an increase in bank debt and a fall in equity, which was brought about by a switch to IFRS (accounting policy changes which have been non cash flow related). The gearing position is very high, but is still acceptable due to the strong cash flows and high prepaid future revenues.

Prepaid deposits have risen but the yield on investments has fallen, as the previous period was exceptional.

In summary, holding shares in IVC is unlikely to provide the high returns demonstrated in the past 12 months because the shares are no longer undervalued.

The demographic profile of the population and the size of IVC's market share is likely to continue to support the high P/E.