InvoCare will include in its 2017 reported after tax profit the impact of the sale negotiated by Centuria Property Funds Limited (a wholly owned subsidiary of Centuria Capital Limited – ASX: CNI or Centuria) of an office building at 10 Spring Street Sydney for a headline price of $270 million.
This property was acquired in 2013 for $91 million by an unlisted property trust, Centuria 10 Spring Street Fund. InvoCare’s major independent prepaid funeral fund, Over Fifty Guardian Friendly Society (“Guardian Fund”), has held a 50.1% equity interest in this property trust. Non-cash fair value movements in prepaid funeral fund investments are included in InvoCare’s reported profits. Valuation uplifts for this particular building have been included in InvoCare’s reported profits over the years since the Guardian Fund acquired its interest in the building.
The sale of the building will crystallise past non-cash fair value movements and is expected to result in an approximate after tax profit of $30 million being recorded in InvoCare’s reported profit for the 2017 year, approximately $14 million of which was included in InvoCare’s reported profit for the half year ended 30 June 2017 through fair value movements.
Although impacting 2017 reported profit, InvoCare’s Operating Earnings and cash flow will only benefit from this transaction in future years when contracted prepaid funeral services are delivered and monies are redeemed from the Guardian Fund.
For immediate release. For more details, contact Fergus Kelly on (02) 9978 5290, 0412 922 029 or firstname.lastname@example.org.