Funeral firm Dignity has reported a “weak” performance over the past three months after a “drop in the death rate”.
Shares in the business slumped after it said UK deaths in the three months to March were below their average over the past five years as Covid-19-related deaths reduced.
It said death numbers tumbled by 19% to 166,000 over the quarter.
As a result, underlying revenues fell by 22% to £73.9 million, compared with the same period last year, while underlying operating profits slid 67% to £9 million.
Dignity said its performance was also affected by lower average revenues per funeral after the company reduced its pricing in September 2021 amid scrutiny over the sector by regulators.
Nevertheless, the company grew its market share in funerals and cremations, it said.
It comes after the firm sealed an agreement with its bondholders earlier this year to waive the financial covenants on its bonds.
Gary Channon, chief executive of Dignity, said: “Whilst the impact of the pandemic has made year-on-year comparisons difficult, the early signs of our new strategy are coming through.
“Increased competitiveness is showing up in across-the-board growth in market share at the cost of average revenue per funeral.
“The combined effect of the drop in the death rate following the pandemic during a time of strategic change for the group is what we were protecting against when we sought and agreed the deal with our bondholders.
“That gives us the ability to pursue the right long-term strategy whatever happens to the death rate this year.”
Shares in the company were 8.2% lower at 459p in early trading.