The UK’s only stock-market-listed funerals provider Dignity has a problem: fewer people are dying.
The undertakers firm today blamed a plunge in deaths over a mild winter for a surprise profit warning, which sent the shares tumbling.
The group, which buried Sir Winston Churchill in the Sixties, said the number of deaths between January and March fell 12% to 159,000, wiping £6.8 million off underlying profits in the first quarter.
Lower spending on funerals also hurt revenues, with the average price spent on Dignity’s funerals down £190. The company is locked in a price war with the Co-op. The industry is also facing a competition probe over high prices.
It warned that its plans to hit full year profit expectations would hinge on how many people die for the remainder of the year.
Data over the past two decades suggest the worst-case scenario would be a 3% fall in the death rate, which would take up to £4 million off underlying profits.
The shares dropped 6% to 638.5p. Overall underlying operating profits were down 42% to £21.7 million.
Chief executive Mike McCollum said: “I am confident that the changes we are making will allow us to generate sustainable growth in the medium to long term.”
