The UK’s largest listed funerals firm has reported a leap in revenue and profits as the coronavirus crisis prompted a surge in UK death rates.
Dignity said it handled funeral arrangements for 368,000 people – a rise of 23% on the first six months of 2019.
But underlying profit before tax was just 11% up at £26.5m compared to the same period last year, on total sales of £169.1m.
That figure was only 6% higher and explained, the company said, by the fact that families chose cheaper, more simple services during the lockdown as attendances were restricted to limit the spread of COVID-19.
Dignity, which owns around 800 funeral locations and operates 46 crematoria, had also stopped providing church services or funeral cars for mourners.
As a result, it reported an average income per funeral of £2,461 compared with £2,919 a year earlier.
Dignity said it had not furloughed any workers and the only form of financial benefit it was receiving from the government was through business rates relief, with the £5.5m in proceeds being reinvested in further personal protective equipment (PPE) for frontline staff.
The company had been enduring tough times before the coronavirus pandemic arrived to complicate its strategy – with a transformation plan put on hold pending the outcome of a sector-wide pricing investigation by the Competition and Markets Authority.
It suspended its dividend last year following a fall in profits, but was then hit in April by the abrupt resignation of its chief executive of 11 years, Mike McCollum, who left the business with immediate effect.
The company on Wednesday said that the search for a new CEO was still progressing – as was a “root and branch strategic review” of the business.
Executive chairman Clive Whiley told investors: “The turbulent trading conditions experienced in recent months have reinforced the need for businesses to be managed proactively in order to respond promptly to unexpected events.
“In particular, I would like to pay tribute to our staff, whose tireless efforts to support each other and our clients during these testing times has gone some way to allowing adequate closure for the bereaved.”
He added: “Their resilience leaves me in no doubt that the conclusion of our root and branch review of the business will ensure the group is ready for any challenge in the future.”
Shares rose more than 13% in the wake of the trading update.