Profits rise at funeral directors Dignity as concerns mount over possible price war
Rising death rates are continuing to benefit the UK’s only listed funeral directors, Dignity.
The Sutton Coldfield-based group saw healthy revenue and profits in the six months to June 30 – although it has warned of a possible price war in the sector.
Revenue rose to £169.8m (H1 2016: £158m), with underlying pre-tax profit up 9% at £46.1m (H1 2016: £42.4m). Underlying earnings per share were also up by 9%, to 74.1p (H1 2016: 67.7p).
The group said that following a very strong start to the year, with the number of deaths 7% higher than the first quarter of last year, the half year concluded with the number of deaths 2% higher than the same period in 2016.
It said the results for the first half of 2017 were in line with the board’s expectations with underlying operating profits increasing 7% to £59.5m (H1 2016: £55.6m).
The period saw the group acquire 14 funeral locations and one crematorium for an aggregate investment of £23.4m. It also opened seven satellite locations in the period. Since period-end, the group has acquired three further funeral locations and opened one satellite location.
The group said it was also keeping a close watch on competitors having noted some “aggressive pricing activity” on both funerals and pre-arranged funeral plans.
Mike McCollum, chief executive of Dignity, said: “The year has started well for the group, with good operational performance, continued excellent customer survey results and further acquisitions of established funeral businesses. The group’s expectations for the full year remain unchanged.
“We remain alert to the strategic challenges facing the group in a changing and increasingly competitive environment. This is reflected in the ongoing development of our digital strategy and the leadership we have demonstrated in calling for proper regulation of pre-arranged funeral plans.
“We will continue to review the scope of our service offering in the light of changing consumer demands and build on our strong market-leading position.”
