Covid-19 creates revenue jump for funeral provider

Dignity conducted 10,000 more funerals in the first half of the year as it dealt with the tragic consequences of the coronavirus pandemic.

However conditions of lockdown meant there was a significant drop in the average revenue from a funeral.

The average revenue from a funeral fell by £750 in the second quarter of the year, which reduced the financial uplift for the business of the increase in the number of funerals.

Dignity said: “Limitations on attendance at funerals, closures of places of worship and the Group’s decision to withdraw limousines from service in the interest of the welfare of our staff and clients all served to reduce average income on full service funerals.”

Revenues were up 12% to £197.1m and operating profits increased by 21%, to £42.7m.

However the group holds assets of £920m in Trusts and a “remeasurement of financial assets” resulted in it recording a pre-tax loss of £13.6m.

Clive Whiley stepped up to executive chairman in April, seven months after being appointed into a non-executive role, when chief executive Mike McCollum left the firm with immediate effect after 20 years.

Whiley had initiated a strategic review of the business when he joined, which was addressing several challenges.

An investigation by competition authorities into the industry, ironically launched at a time when increased competition led to a profit warning by Dignity, sparked a fall in its share price that has continued for more than two years.

Last night’s close is 90% lower than its levels in late 2017, while it has failed to bounce back from the pre-lockdown drop that hit the wider market.

Whiley said: “The turbulent trading conditions experienced in recent months have reinforced the need for businesses to be managed proactively in order to respond promptly to unexpected events.

“In the interim, our focus on controlling discretionary spending will enhance covenant headroom, which together with appropriate cash management will provide the time necessary to implement those plans without the need for external capital.”

The CMA’s long-running investigation is due to publish its provisional decision in August with a final decision scheduled for March.