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UK funeral director Dignity's half-year results beat expectations as the death rate rises and the average cost of funerals holds steady.
July 31, 2012

Mike McCollum, chief executive of the only listed provider of funeral services, Dignity, said that results at the halfway stage were slightly ahead of the run rate for full-year expectations as the company posted an 11 per cent rise in underlying pre-tax profits to £27.5m. Mr McCollum noted that estimated deaths in Great Britain for the first half of 2012 were up from 281,000 last year to 285,000.

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The company's core funeral services segment added eight new locations at a cost of £5.1m and, combined with new satellite locations, this brought the network of funeral locations to 616. Dignity performed 33,300 funerals, slightly down on the prior period, but the company's market share was stable at 11.5 per cent and, with the benefit of improved margins, operating profit rose over 10 per cent to £30.3m.

Underlying operating profits rose 6 per cent to £12.3m at Dignity's crematorium division, which performed 26,200 cremations in the period, 800 more than in the first half of last year, and began operating services for Haringey Council alongside three cemeteries. The smaller pre-arranged funeral business, responsible for 10 per cent of group turnover and operating profits, benefited from a 4 per cent increase in funeral orders to 275,000.

Broker Panmure Gordon has edged up full-year forecasts slightly and now expects adjusted EPS of 60.7p (55.1p in 2010).

DIGNITY (DTY)

ORD PRICE:855pMARKET VALUE:£469m
TOUCH:854.5-855p12-MONTH HIGH:868pLOW: 726.5p
DIVIDEND YIELD:1.8%PE RATIO:13
NET ASSET VALUE:60p*NET DEBT:£304m

Half-year to end JunTurnover (£m)Pre-tax profit (£m)Earnings per share (p)Dividend per share (p)
201110824.533.84.87
201211727.238.75.36
% change+8+11+14+10

Ex-div: 26 Sep

Payment: 26 Oct

*Includes intangible assets of £198m, or 362p a share