DIGNITY, the UK’s only listed undertaker, beat expectations yesterday after a rise in the UK death rate helped increase sales at the business.
The FTSE 250 listed group, which famously buried Sir Winston Churchill, said profits and revenues rose on the back of a shock seven per cent rise in the UK death rate for the first three months of this year.
Underlying operating profits were 8.5 per cent higher at £25.4m, with revenues up to £67.8m from £61.1m last year, for the 13-week period ending March.
“This is a good performance by the group with the first quarter being ahead of our expectations,” chief executive Mike McCollum said.
Dignity, which buried 63,200 people and cremated 50,500 last year, gets about 65 per cent of revenues from funeral sales, 28 per cent from cremations and seven per cent from pre-arranged funerals.
The Birmingham-based company swooped for east Yorkshire-based rival Yew Holdings in January for £58m to add around 40 funeral homes and two crematoria.
Yesterday it said the buy had diluted growth in the key funeral business metric of average income per funeral, but management said the business had continued to trade in line with expectations.
“The integration of Yew Holdings is progressing well and the initial performance is encouraging,” McCollum added. “All three divisions of the business are performing strongly.”
Broker Panmure Gordon yesterday raised its target price for Dignity shares on the back of the results, but maintained full year guidance due to an assumption the higher death rates will normalise for the rest of the year.
The company, which has a market cap of £828m, closed up 1.1 per cent yesterday.
Prior to the Yew deal, Dignity had been acquiring rapidly, snapping up 93 funeral locations and 15 crematoria since its 2004 float.