Competition continues to pose challenge for funerals group

Funeral director group Dignity has said its full year expectations remain unchanged, despite a solid third quarter trading period.

The Sutton Coldfield-based group – the UK’s only listed funeral directors – saw revenue and profits increase over the period but competition within the industry is proving to be challenging.

Expanding on the competition challenge, the group said whilst its pre-arranged and crematorium businesses were performing strongly, there was increased increasing price competition and new competitors had entered the core funeral business.

Whilst a drive towards digitisation was a priority, it said the group was likely to bear costs of £1m in relation to the improvements during the year, with this becoming a recurring expense in future years with costs likely to increase over time.

Q3 revenue for the 39 weeks to September 29, 2017 was £243.9m (2016: £229.3), an increase of 6%. Underlying operating profit rose 5% to £79.4m (2016: £75.8m). The number of deaths during the period rose 1% from 440,000 to 434,000.

Mike McCollum, chief executive of Dignity, said: “Following the group’s solid third quarter results expectations for the full year remain unchanged.

“The board recognises the increasingly competitive environment and the consequential challenges facing the group. Alongside the work being undertaken on the group’s digital strategy and our continued call for regulation of our markets, we are assessing other initiatives to help the group build on its strong market position.”