Dignity profits drop but revenues up in Q3
By Michele Maatouk
Date: Monday 12 Nov 2018
(Sharecast News) - Funeral provider Dignity posted a drop in profits on Monday as it continues to battle competition in the market.
In the 39 weeks to 28 September, revenue rose to £244.2m from £243.9m but underlying operating profit declined 14% to £68.6m as the number of deaths ticked up 3% to 455,000.
In the funeral division, underlying operating profit in the third quarter fell to £11.1m from £15.3m in the same period a year ago, while profit in the crematoria business was flat at £8.8m.
The company said the third quarter saw a drop in average income "as a consequence of the ongoing pricing trials". Although it did not mention it specifically, this was most likely a reference to the Co-op's announcement earlier in the year that it was cutting the cost of its funerals by £100.
Dignity said its funeral market share continued to show "good" momentum in the third quarter. It performed 55,700 funerals in the first 39 weeks of the year versus 52,100 in 2017, representing a market share of 12.1% versus 11.7% the year before.
The group said it continues to expect average income to be lower in the fourth quarter of 2018 but it continues to perform in line with current market expectations for the year ended 28 December.
Chief executive Mike McCollum said: "We are pleased with how the group has performed in the period and following these results our expectations for the full year remain unchanged. Our work on the transformation plan is critical and we are encouraged by the progress that has been made in the initial weeks.
"Alongside the expansion of our digital offerings, we continue to provide a greater choice for consumers and our focus on high standards and excellent client service remains central to our plans for the future. The group's significant research projects highlight the need for minimum professional standards and support calls for regulation that we have been making for some time."
At 1100 GMT, the shares were down 6.4% to 977p.
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