Funeral provider Dignity’s operating performance for the first quarter of the year was below the board’s expectations as a result of the “significantly lower than expected number of deaths”.
For the 13 weeks to 29 March 2019, the company recorded 159,000 deaths, 12% less than last year’s figure of 181,000.
The firm said reaching its full year expectations would “rely heavily” on the number of deaths in the remainder of 2019.
Historical data over the last 20 years indicates that the final volume is likely to be within 3% of the previous year. If deaths were 580,000 (approximately 3% lower), underlying operating profits for the full year could be approximately £3m to £4m lower than originally anticipated.
During the period, the company’s underlying revenue came in at £81.1m, 15% lower than last year’s £95.1m. It’s underlying operating profit was recorded at £21.7m, a 42% drop from £37.5m in the same period last year.
Mike McCollum, chief executive of Dignity, said: “Our primary focus for 2019 remains the execution of our transformation programme, which seeks to build a more coherent, cohesive and technology-enabled business, geared to meeting the changing needs of our customers, whilst remaining focused on excellent client service. This will deliver our vision to lead the funeral sector in terms of quality, standards and value-for-money.
“Whilst the number of deaths in 2019 may mean that our short term financial performance is lower than we originally anticipated, I am confident that the changes we are making will allow us to generate sustainable growth in the medium to long term.”