Shares in Dignity fell sharply on Friday, after the funeral services specialist said it swung into the red.
Underlying revenues in the 26 weeks to 1 July fell 17% to £141.2m, while underlying operating profits slid 61% to £14.7m. The pre-tax loss came in at £156m, compared to a pre-tax profit of £50.5m a year previously.
Dignity – which operates 46 crematoria and 24 cemeteries, alongside a network of 776 funeral directors – said it had been affected by fluctuations in the death rate, with a lower rate reducing revenue by £8.6m across the group. The number of deaths fell to 319,000 from 340,000 a year previously.
The implementation of its turnaround strategy, which includes cutting prices to boost market share, also weighed heavily on profitability, as did higher costs. As a result, Dignity – which also sells pre-paid funeral plans – said it was now considering a temporary fuel surcharge across its crematoria.
As at noon BST, shares in the Dignity were down 8% at 362.66p.
Kate Davidson, chief executive, said: “Over the past few years our business has risen to the challenges presented by Covid-19.
“We have continued to deliver excellent customer service while also implementing our new strategy as well as preparing and achieving Financial Conduct Authority regulatory approval for new funeral plan rules, while recognising the short-term adverse impact on our financial impact.”
The firm is not currently providing guidance, due to the unpredictable death rate post pandemic, the introduction of its new funeral plan proposition, which came into effect on 29 July, and the impact of the turnaround strategy.
