The InvoCare Limited (ASX: IVC) share price has fallen sharply today after the funeral company provided an update in light of recent developments that will impact its business in the wake of the coronavirus outbreak. At the time of writing, InvoCare shares are down 17.25% to $9.26.
InvoCare's pandemic plan
InvoCare has announced today that it has put into place a coronavirus pandemic plan across its operations in Australia, New Zealand and Singapore to ensure that the company complies with all relevant government requirements and guidelines.
This plan incorporates minimising the health risk of the outbreak to its employees and client families while adhering to the strict guidelines on social distancing. In addition, the action plan will activate the company's reserve mortuaries to make sure that any coronavirus cases are kept separate from its main business.
InvoCare revealed that it has already witnessed an impact on its core business since the coronavirus outbreak began, due to the restrictive social distancing rules that have been put in place.
These restrictions are now set to only increase following Australia's decision last night to ramp up its restriction measures on a range of services. The number of people that can now attend funerals has been reduced from a maximum of 100 to a maximum of only 10.
The company acknowledged that it will no longer be able to provide a full range of services, and this will have an impact on its overall business performance. However, InvoCare believes it is too early to try to quantify the extent of the impact.
Strategy to mitigate the business impact
Strategies that InvoCare is putting into place to minimise the impact on its business include deferring all non-essential capital expenditure including its Protect & Grow Investment, as well as placing a hiring freeze on any further staff.
InvoCare's conservative approach to the crisis comes on the back of strong recent financial results for the 12 months to December 2019.
InvoCare emphasised that it will continue to conduct funeral and memorial arrangements despite the restrictions. It already has live streaming and webcasting facilities in many of its locations for family, friends and colleagues who are unable to attend services in person.
InvoCare noted that it will provide further market guidance at its AGM scheduled for May, however, further updates will be given before then if required.
Commenting on today's update, Martin Earp, Chief Executive Officer of InvoCare, said: "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."
"We are now focusing on implementing a series of contingency plans to both reduce the impact of COVID-19 on our business and allow us to continue to meet the needs of our client families during this unprecedented crisis," he added.
