Spike in deaths gives Dignity the best first quarter since 2018

Funeral provider Dignity has had its strongest start to a year since 2018, the company reported on Monday, just weeks after a shareholder coup.

The UK’s only publicly traded undertaker said that 43,000 more people died in the first quarter of 2021 than a year earlier.

It meant that the company had a market of 204,000 deaths to drive demand for funerals, more than expected. Underlying revenue jumped 14% to £94.7 million.

Average revenue at each funeral was lower than expected over the past three months, Dignity said, and it did not capture as much of the funeral market as the board had hoped.

However, operating performance was better than expectations, as profit grew 35% to £26.1 million over the three months.

It was up from £19.4 million in the first quarter of last year and £21.7 million at the start of 2019.

Dignity struggled during large parts of the pandemic, despite a surge in deaths in the UK which would in normal circumstances have boosted its bottom line.

But with lockdown restrictions in place, the normal added extras that Dignity sells as part of its funerals have given way to smaller and cheaper services.

Before the pandemic around half of Dignity’s customers opted for what the company calls a “full service”.

This fell as low as 26% during the height of the pandemic, and levels have only partially recovered to 41% in the opening months of 2021.

It means that the underlying average revenue for every funeral fell from £2,823 a year ago, to £2,565 in recent months.

And there were signs of more trouble to come for the funeral sector in Monday’s update.

Throughout the pandemic Dignity has warned shareholders that the past year’s many excess deaths among the elderly and vulnerable population were likely to mean that death numbers will be lower over the next couple of years.

And, since the beginning of April, the UK’s deaths have fallen below their five-year average, the company said.

Three weeks ago Dignity’s chairman was ousted in a coup led by the company’s largest shareholder, Phoenix Asset Management. He was replaced for the time being by Phoenix’s Gary Channon.

Mr Channon promised to give shareholders a fuller picture of his plan for the future of Dignity at its annual general meeting next month.

“As we navigate out of the pandemic, and in light of regulatory changes in our industry, our hope is to lead positive change in our sector and become the true market leader with an unrivalled focus on quality, standards and choice,” he said on Monday.