Dignity profits despite fall in deaths
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Your support makes all the difference.Dignity, Britain's only listed funeral services company, unveiled a sharp rise in profits yesterday despite a decline in the national death rate. It plans to return £80m, or £1 a share, to shareholders in August while spending a further £10m to plug a £12m hole in the company pension scheme.
Dignity, which runs 519 funeral homes across the country, said underlying profits, stripping out asset sales and one-off financial charges, climbed 17 per cent to £25.9m last year. According to official estimates, deaths in Britain fell to 563,800 from 574,500 in 2004, although analysts cast doubt on the figures. Charlie Cottam, at Panmure Gordon, said: "Dignity's volumes have not been so low and there may be a statistical blip." The Office for National Statistics expects deaths to rise to 573,500 this year.
With a 12 per cent share of the funeral services market, Dignity ranks behind the Co-op, at 14 per cent. The company bought 10 funeral homes last year and shut down three that had become too small to be financially viable. It said its book of pre-paid and pre-arranged funerals had increased to 181,000 from 170,000 the year before, putting it in a strong position for this year.
Peter Hindley, Dignity's chief executive, said the company is looking to spend up to £10m on a further 10 acquisitions this year. He hinted there could be a further return of cash to shareholders if profits keep growing strongly.
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