A surge in the death rate has helped fuel a sharp rise in first-quarter profits at Dignity, Britain’s biggest funeral director.
In the three months to the end of March, Dignity’s profit excluding one-off items jumped by 39% to £36m. Revenue increased by 24% to £85.5m as the number of deaths nationally rose 19% to 175,000, the company said in a trading update.
The rate of increase contrasted with a 7% decline a year earlier. Mike McCollum, Dignity’s chief executive, said he had no idea why the death rate was so high but pointed out that a big change in the first-quarter death rate usually evens out by the end of the year.
McCollum said: “The number of funerals and cremations we perform is a function of how many deaths there are in any given year. When you look at individual quarters, the numbers move around quite significantly. All I know is that over the 12 months things tend to even out a little bit so we don’t spend a lot of time thinking about why things happen like this.”
He added that the annual death rate had fallen from about 620,000 to 540,000 in the past 10 years as people lived longer but that the Office for National Statistics expected deaths to now start increasing as members of the ageing population start to die.
He said the declining death rate had put pressure on Dignity’s profitability because its 24-hour service creates high fixed costs. Clients’ ability to pay had held up during the economic slowdown and Dignity was considering putting up prices, he said.
