Two funeral companies are up for sale following the liquidation of a parent group, with both businesses combined turnover estimated at about $1.8 million.
The development is an unusual one for the funeral industry, as many businesses stay within families and are often profitable for years. Sales, or insolvency appointments, are rare.
Both Walters and Son Funeral Directors and Andrew Kennedy Funeral Directors are now up for sale, following the liquidation of the pair’s parent company, Spies Group Holdings.
Liquidator Ian Purchas of RMG Partners told SmartCompany this morning the liquidation did not occur because of any trade issues, but rather internal problems.
“This company, which is now in liquidation, is part of a group which forms a deceased estate,” he says. “It’s probably more to do with issues within the group that have led to my appointment.”
Purchas also acknowledges the unusual nature of the insolvency, commenting when parlours are “managed well…they can be fairly profitable businesses, and these are not an exception”.
Both businesses have continued to trade during the liquidation process.
Purchas say both perform about 220 funerals a year, which based on an average funeral cost of $8,000 results in annual revenue of approximately $1.8 million.
“The companies have always continued to trade, and they are part of a long-standing family group of funeral partners,” he says, adding he is confident a sale will take place.
The funeral industry has been evolving over the past few years. While the industry has largely remained profitable, the ageing population has also produced a gap in business, and in some cases, has forced funeral parlours to innovate.
More recently, funeral industry leaders have been selling “advance plans” to Baby Boomers. InvoCare chief executive Andrew Smith recently said the business has been dealing with families 10 to 12 years in advance.
“With the proliferation of funeral insurance and with InvoCare having a bit more publicity – funerals aren’t such a taboo topic anymore – we’ve seen an increase in people’s propensity to organise funerals in advance.”
“We collect the cash – and put that it into third-party trusts to protect it,” he said last month.