Funeral firm Dignity blames rising costs for plunging profits
Delivering a funeral cost £1,925 in the year to September 30, up from £1,858 last year, Dignity said.
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Your support makes all the difference.The cost of funerals has gone up this year as a result of higher wages, raw materials and energy prices, funerals group Dignity said.
Delivering a funeral cost £1,925 in the year to September 30, up from £1,858 last year, Dignity said.
The group spent an additional £3.2 million on its workers’ salaries in the face of substantial staff shortages and rising living costs.
It also shelled out an extra £700,000 on coffin raw materials, additional £700,000 on utility costs and £500,000 more on fuel.
It is also promising to see tangible improvements to our workforce as we increase our headcount following the proactive steps we've taken
The group posted a £1.7 million underlying loss in the three months to September 30 after making £7.2 million in underlying profits the same time last year.
Across the first nine months of the year, its underlying operating profits were down 68% year-on-year to £14.1 million.
The firm said it has changed its pricing and introduced cheaper funeral options, such as direct cremations, lowering the average revenue for funerals by more than £400.
So while it is costing the business more to deliver a funeral, it is making less money from them.
Dignity is heavily impacted by the UK’s death rate, which it said has fluctuated this year, possibly as a knock-on effect of Covid deaths in 2020 and 2021.
There were 19% fewer deaths in the first three months of 2022, significantly impacting the firm’s revenues in that period as it took a £10 million hit.
But deaths were about 19% above the five-year average in the first few weeks of the fourth quarter, with Dignity saying the reason is unknown.
The firm’s new pricing strategy has helped to increase its share of the market and improve its recruitment challenges, it said.
Chief executive Kate Davidson said: “The third quarter continues to present some of the challenges we faced earlier this year, but with our new strategy well underway we are beginning to see positive indications of our market share growing.
“It is also promising to see tangible improvements to our workforce as we increase our headcount following the proactive steps we’ve taken.
“We remain focused on our long-term aims and we believe that our strategy will deliver sustainable growth and value for shareholders, colleagues and clients alike.”