It is becoming increasingly common for private companies to own and operate cemeteries and crematoria.
Melbourne, Australia (PRWEB) December 23, 2014
The financial performance of the operators in the Funeral Directors, Crematoria and Cemeteries industry in Australia is strongly influenced by the number of deaths in the country each year. This statistic has risen modestly over the past five years as medical advances, higher living standards and improved attitudes to health have helped lift life expectancy. According to IBISWorld industry analyst Stephen Gargano, “The increasing popularity of cremations in place of traditional burials has stifled revenue growth, as cremations generally generate lower revenue per service.” Economic uncertainty over the past five years has increased price sensitivity among consumers, although service still remains the most significant demand determinant. Industry revenue is forecast to rise by an annualised 1.7% over the five years through 2014-15. This includes an increase of 1.0% in 2014-15, to $1.0 billion. Operators have sought to promote personalised services in an effort to boost revenue, as many customised options have higher margins.
The majority of funeral directors are small, family businesses, with many having limited access to capital and operating with low profit margins. These operators are paid a professional services fee for conducting and managing core funeral services, such as collecting the body and preparing it for viewing, running the ceremony and transporting the body to the burial site or crematorium. Most cemeteries and crematoria are owned by councils or not-for-profit trusts. However, it is becoming increasingly common for private companies to own and operate these facilities. “InvoCare currently dominates the industry, accounting for over one-third of total revenue,” says Gargano. InvoCare's highly profitable business model revolves around a vertically integrated supply chain, providing services from coffin manufacturing to funeral directing and crematorium and cemetery operation. Consolidation in the industry is expected to rise as more companies aim to replicate the economies of scale and profitability achieved by InvoCare. The industry exhibits low levels of market share concentration. Major companies include InvoCare Limited.
Over the next five years, the Funeral Directors, Crematoria and Cemeteries industry is expected to benefit from a slightly higher number of annual deaths as the population ages. More people are expected to choose cremation over burial, which will curb revenue growth to some degree.
For more information, visit IBISWorld’s Funeral Directors, Crematoria and Cemeteries industry in Australia report page.
Firms in this industry operate funeral homes, cemeteries and crematoria. This includes the management of funerals, cremations and burials.
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