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On the “plus” side, people are still dying at a decent pace. But tighter competition is a challenge to funeral company Dignity, hitting its shares today.
Most companies have the luxury of openly celebrating solid demand for their products and services. Dignity treads more carefully.
It said today that the number of deaths in the UK is holding up surprisingly “well”:
The number of deaths has been higher in 2016 than the Group originally anticipated following a significant increase in the number of deaths in 2015. Historical data would suggest that deaths in 2017 could be significantly lower than 2015 and 2016. Trading in the first few weeks of 2017 has however continued to be strong. As a result, the Board’s financial expectations are unchanged for the year ahead.
Pre-tax profits picked up a little in 2016 from the previous year, to £71.2m. Deaths – not a line item in most companies’ results – stood at 590,000, up by 2,000 on 2015. Intriguingly, the company said it was “starting to see potential opportunities from the use of digital technologies”.
Still, shares fell by 13 per cent at the open, and at pixel time they are 11.5 per cent weaker at £24.44. This likely reflects a note of caution from Dignity on the shifting nature of its industry. The company noted:
The Board remains positive about the future prospects for the Group. However, given the increased size of the Group and increasing competition in each of our markets the Board has revised its medium-term target underlying EPS growth rate to eight per cent per annum from the current 10 per cent.