Dignity says full-year to beat market expectations

Dignity’s results for the 39 weeks ending 23 September were slightly ahead of its expectations, driven by a higher number of deaths in the second and third quarters of the year, and the company said it expects operating profits for the full year to be ahead of market forecasts.

The FTSE 250 funeral services provider said that although as expected the deaths this year have been lower than the exceptional level seen in 2015, they have been higher than the group anticipated based on longer-term trends.

However, Dignity’s funeral market share, having been stronger in 2015, is lower than the group expected.

Taking these factors into account, it expects underlying operating profits to be slightly ahead of current market expectations for 2016, while its forecast for 2017 remains unchanged.

Underlying operating profit in the third quarter came in at £75.8m, down from £78.1m in the same period a year ago, but revenue grew to £229.3m from £227m. Meanwhile, the number of deaths fell to 434,000 from 446,000.

Chief executive Mike McCollum said: “Our objective is to lead the funeral sector in professional standards and service. I believe we do this and that we continue to improve. Our clients value this which is why they return to us and recommend us, allowing us to report strong financial results today. Our expectations are that 2016 will be a stronger year than previously expected and remain positive and unchanged for 2017 and beyond."