Dignity reveals spend-per-funeral increases
Funeral homes business Dignity has revealed it has seen the amount spent on each funeral increase but the number of deaths fall.
Bosses also suggested the high death toll from the Covid-19 pandemic could see the number of funerals fall in the coming two years.
Spending on each funeral rose from £2,461 in the first half of last year to £2,628 in the first six months of 2021.
But Dignity only conducted 41,400 funerals, compared with 46,000 a year earlier. Prior to the pandemic the number of funerals was 36,200.
The company said: “Covid-19 has had a distorting impact on the business both in terms of operations and the financial results, making comparisons to the prior years difficult. The death rate in quarter one (January to end of March) was 22% above the five-year average (2015-2019), which reduced to 4% below the five-year average in quarter two (between April and end of June).”
It added: “Amongst all this turbulence market share is much harder to judge because the differences between time of death and time of funeral change.”
As a result of the falling death rate, revenues fell from £197.1 million to £189 million, although pre-tax profits for the six months to June 25 hit £50.5 million, compared with a pre-tax loss of £12.1 million a year earlier.
On an underlying basis, which strips out one-off costs, pre-tax profits fell 14% to £23.2 million.
Looking forward, the company said it continues to implement new procedures and pricing structures ahead of new Competition and Markets Authority (CMA) rules on transparency.
Dignity said: “In advance of that deadline, we applied learnings from our trials to introduce new products and price points which we believe position us to be the best value for money in the communities we serve.”
It added: “We have also moved away from restrictive packages to individually tailored funerals which we believe are what clients prefer and which we are well positioned to provide.”
New rules by the Financial Conduct Authority (FCA) to regulate funeral plan selling will also see Dignity apply for a licence, the company said.
Dignity said: “We are also working to bring our existing funeral plan trusts into the new FCA regime.
“We have ended our relationship with those third party telephony partners who sold plans on our behalf.”
On the future number of deaths and the likely impact in the future, the company said: “The impact of Covid-19 deaths in 2020 and 2021 could possibly mean we experience a lower number of deaths than originally anticipated by the Office for National Statistics (ONS) in 2022 and 2023. The group will not speculate on the most likely outcome.”
