Drop in death rate hits Dignity profits

Dignity has 831 funeral locations including in the Shropshire, Black Country and Staffordshire. It also operates 46 crematoria including at Lichfield, Stourport, Telford and Shrewsbury.

Shares in the Sutton Coldfield-based business slumped after it said UK deaths in the three months to March were below their average over the past five years as Covid-19-related deaths reduced.

It said death numbers tumbled nationally by 19 per cent to 166,000 over the quarter.

As a result, underlying revenues fell by 22 per cent to £73.9 million, compared with the same period last year, while underlying operating profits slid 67 per cent to £9 million.

Dignity said its performance was also affected by lower average revenues per funeral after the company reduced its pricing in September 2021 amid scrutiny over the sector by regulators.

Nevertheless, the company grew its market share in funerals and cremations, it said.

It comes after the firm sealed an agreement with its bondholders earlier this year to waive the financial covenants on its bonds.

Gary Channon, chief executive of Dignity, said: "Whilst the impact of the pandemic has made year-on-year comparisons difficult, the early signs of our new strategy are coming through.

"Increased competitiveness is showing up in across-the-board growth in market share at the cost of average revenue per funeral.

"The combined effect of the drop in the death rate following the pandemic during a time of strategic change for the group is what we were protecting against when we sought and agreed the deal with our bondholders.

"That gives us the ability to pursue the right long-term strategy whatever happens to the death rate this year."

Shares in the company were 8.2 per cent lower at 459p in early trading.

The group performed 21,200 funerals in the first 13 weeks of the year –12.7 per cent of total estimated deaths in Great Britain. It conducted 20,800 cremations.