Dignity profits dip in line with drop in death rate

 
Hayley Kirton
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People walking a dog in a graveyard
Fewer deaths means lower profits at Dignity (Source: Getty)

Dignity announced today that its profits have slipped slightly as the country's death rate dropped.

The figures

The listed provider of funeral related services revealed underlying operating profits for the 39 weeks to 23 September of £75.8m, down 2.9 per cent from £78.1m for the same period last year.

Revenue nudged up slightly to £229.3m, up one per cent on last year's £227m.

Dignity has also snapped up 11 funeral locations during the period.

Shares in the company are currently up 1.4 per cent at 2,665p.

Why it's important

Thanks to the nature of its work, Dignity's profits tend to rise and fall with the country's death rate, and the company noted in its results that the number of deaths for the most recent reporting period had fallen by 2.7 per cent compared with the year before.

The company also revealed that its profits for the year so far were slightly ahead of board expectations, thanks to deaths, particularly in the second and third quarters of the year, being "higher than the group anticipated based on longer term trends". However, market share is also lower than anticipated.

With that in mind, Dignity announced underlying operating profits for 2016 were likely to be slightly ahead of market expectations, while its forecast for 2017 and beyond remained "positive and unchanged".

What Dignity said

Mike McCollum, chief executive of Dignity, said:

Our objective is to lead the funeral sector in professional standards and service. I believe we do this and that we continue to improve. Our clients value this which is why they return to us and recommend us, allowing us to report strong financial results today.