Belfast Telegraph

Dignity profits in poor health as deaths fall to lowest level in five years

The funeral provider’s profit has fallen 30% so far this year, as it faces a sector-wide probe from the competition authorities.

The funeral sector is facing a probe by the CMA into pricing (Gareth Fuller/PA)
The funeral sector is facing a probe by the CMA into pricing (Gareth Fuller/PA)

By August Graham, PA City Reporter

Funeral provider Dignity has predicted fewer Britons will die this year than in any year since 2014, as it pinned its 2020 financial performance on changes to the figures.

Around 577,000 people are expected to die in 2019, according to the firm’s calculations, a 3.7% drop on the year before.

This has taken a 30% chunk out of Dignity’s underlying operating profit so far this year, which is down to £47.9 million.

However, even a 1% rise in the number of deaths in the third quarter was not enough to pump life back into Dignity’s profit, which fell 8.2% to £11.2 million in three months.

Although deaths are lower, market share remains robust Mike McCollum, Dignity

The board said it was sticking by predictions of its 2019 results made earlier this year.

“Operating performance in 2020 will rely heavily on the number of deaths, which may or may not revert to higher levels witnessed in previous years,” it added.

Dignity is a bellwether for a sector which has been put under stronger scrutiny in recent years.

As the country’s only listed undertaker, its results are often interpreted as the best sign of the sector’s health.

The company’s share price has taken a major haircut in the last two years, as the Competition and Markets Authority (CMA) investigates pricing in the sector.

The CMA has said that the cost of a funeral has increased 6% a year for the last 14 years, around double the rate of inflation.

Critics have long claimed that the £3,000 to £5,000 typical cost of a funeral is ripping off inexperienced family members at a time when they are at their most vulnerable.

Speaking after Dignity updated the market on Monday, chief executive Mike McCollum said: “I am pleased with the group’s progress so far this year. Although deaths are lower, market share remains robust, the transformation plan remains on track, and our journey to build a more modern, technologically-enabled business that offers clients a high-quality service at a variety of price points remains firmly intact.”

PA

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