Slower death rate adds to Dignity’s problems
A marked fall in the number of deaths in the first three months of the year threatens to have a big impact on the financial performance of Dignity, the funeral provider that is already battling problems on several fronts.
There was a 12% drop in deaths – 22,000 fewer than a year earlier – which was the main driver in first-quarter revenues falling 15% and underlying profits being down 42%.
Although the company still expects the annual number of deaths to get within 3% of last year’s total, it forecasts that would result in profits being hit by up to £4m.
Mike McCollum, chief executive of Dignity, said: “Whilst the number of deaths in 2019 may mean that our short-term financial performance is lower than we originally anticipated, I am confident that the changes we are making will allow us to generate sustainable growth in the medium to long-term.”
The Sutton Coldfield-based group embarked on a transformation plan last year in response to significant disruption and price pressures in the sector.
It has seen the average income per funeral was approximately £190 lower than the same period in 2018, a 6% drop and slightly below the amount it had previously forecast.
The Competition and Markets Authority is investigating the funerals and crematoria sector – a move that was welcomed by Dignity – examining how customers are treated at a time when they are vulnerable to anti-competitive practices.
McCollum added: “Our primary focus for 2019 remains the execution of our transformation programme, which seeks to build a more coherent, cohesive and technology-enabled business, geared to meeting the changing needs of our customers, whilst remaining focused on excellent client service.”
Although Dignity’s share price has been fairly stable in 2019, it remains a long way below its previous levels. In November 2017 it was 2457p, after more than two years trading above 2000p. On Friday it closed at 676p, more than 70% below its price 18 months ago.
