Dignity's results reflect dip in death rate

The undertaking firm Dignity said yesterday that it has conducted fewer funerals in the first half of the year because the death rate in the UK has fallen.

It conducted 35,100 funerals in the first half, 3% fewer than in the corresponding period last year, and 19,800 cremations, 4% down on the year before.

The company said that the UK's death rate fell by 3.6% in the first six months of the year, which is much more dramatic than the predicted fall of 0.75% over the next 10 years.

"It is just a quirk," said Peter Hindley, the chief executive of Dignity. "By the end of the year we will have a much better half from that point of view."

The results were the first numbers reported by the firm since it floated on the stock market in April, raising £123m from investors. Despite the fall in the number of funerals, the company's turnover rose 4% to £69m, due to a 5% price rise in October. A fall in operating expenditure led to its underlying profits increasing 31% to £12m.

The cut in expenditure is due to the costs that are linked to volume, such as casual staff who drive a hearse. However one-off charges from paying off debt early meant that it made a loss before tax of £3.9m, compared with £1.3m the year before. The number of prepaid-paid funeral plans Dignity sold fell to 7,900 from 13,800, because one of its partners, Royal London, has stopped selling the plans.

The company holds the plans in a trust which has assets of about £150m. It made a surplus in the first half, which brought in £1.2m to the firm.

Dignity is building a new crematorium at Holytown, North Lanarkshire, which will open in August. The company has £11.3m in cash that must be used to acquire new funeral homes and assets. It intends to continue buying up small funeral homes.

Dignity and the Co-operative Group are the two biggest players in the sector.

It has 511 branches of funeral homes and 21 crematoriums. The company will pay a dividend to shareholders of 1.88p a share, a total of £1.5m.

Dignity's shares rose 3.5p to 278.5p .