Dignity sees profit growth on acquisition

LISTED funeral directors Dignity has seen an increase in full year sales and pre-tax profits, boosted by continuing acquisitions.

The Sutton Coldfield-based group saw revenue increase 8% last year from £184.7m to £199.1m. Pre-tax profits rose 6%, from £37.5m to £39.8m.

Basic earnings per share were up 12% to 46.9p and the group has proposed a final dividend of 8.88p. Return on value was £63.9m, equating to £1 per ordinary share.

The group said there had been a strong trading performance from all areas of the business, with cash generation remaining good.

It said customer satisfaction results were excellent, with 99% of families saying the firm met or exceeded their expectations and 98% said they would recommend the firm to others.

The ongoing acquisition strategy saw the group invest £5.8m to take on an additional six funeral location. A further £6.4m has been invested this year to acquire three further locations.

In addition, 18 satellite locations opened within the funeral business, three additional crematoria have been added in the year, with two more crematoria set to open during 2011.
Sales of pre-arranged funeral plans were strong, with unfulfilled pre-arranged funeral plans increasing to 238,000.

The group also raised £81.8m from additional long term securitised debt, the majority of which has been returned to shareholders.

Mike McCollum, Dignity chief executive, said: “We have delivered on all areas of our strategy. Customer service is excellent. We have added locations in both the funeral and crematorium business and sold more pre-arranged funeral plans than ever before. The net result is a 15% increase in EPS.

“The return of value in the year means that an investor at the time of the IPO will have had nearly all their initial investment returned in cash and still hold shares in Dignity which, at the current market price, are worth approximately twice their original investment.”

He added that 2011 had started well and the board remained confident in the group’s prospects.

For the latest Dignity share value click here