Dignity earnings tumble as it implements turnaround plan
Funeral services provider Dignity announced its preliminary results for the 52 weeks ended 28 December on Wednesday, reporting a 3% fall in revenue to £315.6m.
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The London-listed firm said its underlying operating profit was off 23% at £80.2m, while underlying profit before tax slid 30% to £54.4m.
Underlying earnings per share slid 33% to 85.8p, and underlying cash generated from operations was £101.9m, off 12%.
The company’s operating profit was down 32% at £66.3m, and its profit before tax was 43% smaller at £40.5m.
Basic earnings per share fell 46% to 63p, and the total amount of cash generated from operations was 16% smaller at £94.9m.
The board proposed a final dividend of 15.74p, in line with that paid in the prior year, which would add to the 8.64p interim dividend, which was also the same as 12 months earlier.
In the year, the number of deaths was 2% higher at 599,000, which was as Dignity’s board had expected.
Dignity said its comparable funeral market share increased slightly following “significant declines” in 2016 and 2017.
During the year, the company completed a ‘simple funeral pricing reset’, and expanded its ‘Simplicity’ service offering.
It said its transformation team was now in place, with a three-year detailed transformation plan established.
Good performance was reported from crematoria, although Dignity said its ‘pre-need’ environment remained challenging.
“2018 marked the beginning of a period of radical change for Dignity,” said chief executive officer Mike McCollum.
“We reduced our funeral prices, created a broader range of choices for clients and embarked on plans to transform the business by the end of 2021.
Our vision is to lead the funeral sector in terms of quality, standards and value-for-money.”
To achieve that, McCollum said the company was building a more coherent, cohesive and technology-enabled business, geared to meeting the changing needs of its customers.
“I am pleased with the progress we made during the year, we built momentum and our transformation plan is on track.
“A lot of work remains to be done, but I am confident that with our highly experienced staff and the new transformation expertise we have brought in, we will achieve our goals.
“2019 is likely to mark the start of the Competition and Markets Authority's investigation into our industry.”
McCollum said Dignity’s surveys demonstrated that the majority of clients assumed the funeral industry was regulated, when it was not.
“Some may assume that they will receive the same quality of service from different operators irrespective of price - they will not.
“I am proud that underpinning all of the changes we are making to our business is a continued, relentless commitment to the highest levels of client service.
“This commitment makes me confident that we have the quality necessary to achieve our ambition of getting ahead of the competitive curve, leading the industry and providing sustainable growth.”