Dignity revenues up 2% in Q1, says 2018 trading to be volatile

Funeral services provider Dignity reported a 2% rise in first-quarter revenues on Monday as the number of deaths increase 8%, but underlying operating profit was flat at £37.5m.

In a trading update for the 13 weeks to 30 March, the group said revenues increased to £95.1m from £93.3m, while underling profit was steady at £37.5m and the number of deaths rose to 181,000 from 167,000 in the first quarter of last year.

Despite the positive start to the year, Dignity said it is still too early to conclude that the trading experienced in the first quarter is indicative of the likely funeral price and volume mix going forwards.

The company, which issued a profit warning back in January due to intense competition, said the outcome of its ongoing price and service trials across its entire portfolio is crucial in determining its future market position. However, data from these trials is still at a very early stage and it is not yet possible to draw any meaningful conclusions, it said.

It said trading this year is likely to be volatile but based on the first quarter results, the full-year outturn should be in line with market expectations following the upgrades made in April.

Chief executive Mike McCollum said: "While the first quarter produced a much stronger result than we had anticipated when implementing the price changes in January, the current year is all about completing our review of our funeral business and ensuring we provide the excellent service our clients expect from us. We will also continue to demonstrate industry leadership by calling for stronger regulation in the funeral plan sector to protect customers."

At 1040 BST, the shares were up 2.4% to 1,244.85p.