Dignity grows as death rate rises

An unforeseen jump in the death rate made for a year of growth at listed funeral business Dignity, as the company published its preliminary results on Wednesday.

The FTSE 250 firm saw revenues rise 14% during the year to 25 December, to £305.3m from £268.9m.

Underlying operating profit was up 16% to £98.7m, and underlying profit before tax was up 23% to £72.2m. Dignity generated £125.2m cash from operations, a 20% increase over 2014.

On a statutory basis, the company's operating profit totalled £95.5m, a 15% increase. Its profit before tax was £69m, a turnaround from 2014's loss of £67.7m.

Dignity's underlying earnings per share rose 34% during 2015 to 114.8p, and its basic earnings per share were 115.2p, compared with a basic loss per share of 104p last year.

The board recommended a final dividend of 14.31p, up 10% on 2014, which would add to the interim dividend of 7.14p already paid.

"Our staff have performed tremendously in a year when we had to look after a lot more families than originally anticipated," said chief executive Mike McCollum.

"Our standards remained high, as reflected in the outstanding responses from our client surveys. Our financial performance was very strong as a result, helped by our continued focus on maintaining good cost controls alongside excellent client service and investment in the business," he added.

The company benefited from a growing market in 2015, with 588,000 deaths registered during the period, up 7% on 2014's 550,000 - a rate of change not seen for more than 60 years.

Dignity said there was strong operating performance from all three operating divisions, with client satisfaction remaining high. 99% of families said the company met or exceeded expectations, and 98% said they would recommend Dignity.

The company also said the 36 funeral locationa acquired from Laurel Funerals in July 2015 had been integrated well, and were performing in line with expectations.

Looking ahead, Dignity expected the number of deaths in 2016 to revert to the level seen in 2014, and its financial outlook was consistent with the group view throughout 2015.