Funerals provider's revenues drop as number of UK deaths declines
About 24,000 fewer people have died in the UK in the first half of this year – delivering a blow to revenues at funerals group Dignity.
The owner of West Midlands-headquartered funeral provider, which runs more than 800 undertakers around the country, saw revenues fall by 12 per cent to £153.3 million compared with the same period in 2018.
Operating profits nearly halved, sliding 46 per cent to £28 million for the six months to June 28, and its share price followed as the company suspended its shareholder dividend.
The Sutton Coldfield-based business has crematoria at Kidderminster, Lichfield, Emstrey in Shrewsbury and Telford, and runs the West Midlands funeral home chains Jennings and F W Collins.
Total deaths fell by seven per cent in the first six months of the year, and the funeral business said its forecasts for 2019 depend on there being a greater number of deaths than in the previous year.
The decline in profits and revenues drove Dignity to scrap its dividend payment temporarily until the "current uncertain competitive environment becomes clearer".
Dignity is in the midst of a transformation plan, having seen its share value fall by more than 75 per cent over the past two years.
It said it is currently piloting a programme to transform its branches to make its business more "technology-enabled", with plans to roll out improvements across its network next year.
The Sutton Coldfield-based business has come under significant scrutiny from the competition watchdog, the CMA, this year after it launched an investigation into the sector in March on the back of rising prices.
Dignity said it supports the CMA's 18-month investigation because it could improve standards across the sector.
Chief executive Mike McCollum said: "While the number of deaths in the first half meant that our financial performance for the period was lower than originally anticipated, we remain confident that the changes we are introducing will generate sustainable growth in the medium to long-term.
"As a board we are determined to seize the current opportunity to create a business that is clearly differentiated from the competition and gives customers a clear choice.
"We are building a more coherent, cohesive and technology-enabled business, one geared to meet the changing needs of our customers while remaining focused on excellent client service."
Shares in Dignity fell by 9.2 per cent to 558p in early trading on Wednesday.