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Coming Home Funeral Services

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by

Amelia Dean

on 25 November 2014

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Transcript of Coming Home Funeral Services

Introduction
Analysis and comparison of three different companies
Process of Valuation:
Comprised of the theories and frameworks
The conclusion was drawn ultimately from the strengths and weaknesses
Coming Home Funeral
3F AG
Yellowstone Cattle Bank
Empire Investment Decision
Comparison
Strengths
Market size is viable
Unique industry: Price insensitive, predictable data, reliable industry
Management risk very low: good operating margins, Mid 40's
Financing risk is low: Cash flows & management team
Exit risk is low: IPO
Weaknesses
Revenue growth was flat 2000-2003
Legal history
Retained ownership
The "resource problem"
Key Points
Largest consolidated provider of end of life care.
Largest operated in a fragmented market.
500 funeral locations, a number of cemeteries and pre-arrangement business serving 200,000 individuals.
Key Points
3F is a F&F subsidiary of a large conglomerate
One of the world's leading developers within its segment
Headquartered in Germany, develops, produces and sells worldwide
Key Points
Founded 1998, YCB broke-even after the first year and has exponentially grown ever since.
YCB's growth has stemmed from the overall industry growth
Provides processing services to regional and home businesses
Ranked as the 44th largest payment processing company by volume & 24th by number of merchant customers
Comparison
Strengths
Positive Financial Statements:
Break-even: After 1 year
Continual growth: $6.8m to $10.1m
Impeccable growth record has been attributable to the CEO
Technological advances within developing nations are increasing
Consumer based has increased due to industry growth:
From 12,000 to 40,500 with projections to reach 77,000
Exit risk is low
Weaknesses
Lower ranking on both volume and merchant customers in comparison to its competitors
Potential for competitors to flood the market
CEO mentality, openness to lower level ideas and ethical conduct.
Newness of the venture implies relatively limited financial history
Investment Decision
Coming Home Funeral Services
Keys Points
Well established business and leading market position.
Strengths of the management team.
Predictable industry, reliable deal
Capital expenditure $12 Million
Challenges
Flat growth in revenue and EBITDA.
Explained by legal history
Management persistent -> addressing these problems proving commitment
The " resource" problem
Help from other groups, e.g. German Group
Please collect your winnings..

The End
Comparison
Strengths
Large market, $670m revenue
Still growing, demand for consumer products increase in line with GDP
Strong customer relationships, critical in industry because of major clients' needs
Strong projected cash flows
Favourable terms with banks
Several exit opportunities
Boosting the German office business
Weaknesses
Management team risk high
Skilled, but lack of motivation - poor upper management.
Inward-looking business lines
Bad presentation
Inability to communicate to other levels and to upper management
Manufacturing risk: large and complex supply chain -> responding to clients
Uncertainty towards anticipated cost cutting goals
Price pressure -> reducing margins?
Full transcript