Funeral provider remains cautious despite strong performance
Funeral provider Dignity remains cautious about the impact of changes to its pricing and service offer despite delivering a strong performance in the first quarter of the year.
The Sutton Coldfield-based group has introduced a “simple service” price in response to competition. Take-up of that was lower than expected, although Dignity increased its market share overall.
The stronger-than-expected margin mix meant its underlying operating profit nudged up slightly, to £37.5m, and confirmed its April announcement that its performance was ahead of analysts’ forecasts. Revenues for the 13 weeks to March 30 also increased, up 2% to £95.1m, although this was helped by an 8% rise in the number of deaths during the period.
Dignity’s chief executive Mike McCollum said: “While the first quarter produced a much stronger result than we had anticipated when implementing the price changes in January, the current year is all about completing our review of our funeral business and ensuring we provide the excellent service our clients expect from us.”
The company said it took time for the run rate of 15% simple service funerals to become established and it expects the average mix of full service funerals for the remainder of the year will be lower than that seen in the first quarter.
However it reiterated previous statements that data from its ongoing price and service trials are “still at a very early stage and it is not yet possible to draw any meaningful conclusions”.
Dignity also announced that non-executive chairman Peter Hindley plans to retire from the board in 2019 after 10 years in the role. It will look to appoint a non-executive director this year who can step up to become chairman when Hindley finishes.
