Ann: Change of Director's Interest Notice, page-10

@CaptainBarnacles

I do agree with you that the growth numbers on the pilot sites look encouraging.

What I find slightly concerning, in today’s updated guidance, is that ten weeks ago Management were still guiding “low single digits” (whatever that means, 3% shall we say?) EBITDA growth for CY2018; now they are guiding flat EBITDA, and heavily back-loaded on the second half as well.

What has happened over the past few weeks that the Company were not already aware of back then? Surely the number of planned facilities to refurbish/renovate hasn’t changed? Can they really blame it all on a slight drop in the number of deaths in Q1 (which they didn’t even try to quantify)?

I hate to say that, but what it looks like to me is that there is an ongoing deterioration in market share (and/or pricing power) even on a like-for-like basis, i.e. regardless of site closures.

How do they otherwise justify the “lower volumes in the core Australian / NZ funerals business” (see slide 19 of today’s presentation), which according to them explains 43% of the drop in case volume and is (if I am reading the slide correctly) unrelated to closures?

Don’t get me wrong, I do fundamentally like this business and would like to buy into it at the right price. I am just no longer sure if a 12.5x EV/EBITDA affords a sufficient margin of safety, in the present situation, also given the relative abundance of reasonably/attractively valued alternatives currently available in the broader market.

So I guess I will just keep watching it, for the time being…
Just my two cents as usual, cheers