An unusually high death rate in the first half of the year - up 5.6 per cent on the same period in 2012 - meant bumper results for funeral service provider Dignity (DTY).
The underlying operating profit rose 16 per cent to £45.3m as the group conducted 10.5 per cent more funerals and 15 per cent more cremations. That said, chief executive Mike McCollum cautioned that the death rate is likely to soften considerably in the second half and end the year roughly on par with 2012. Still, this means Dignity is on track to meet its full-year targets.
Funeral locations rose by a net 49, of which 40 were part of the Yew Holdings acquisition in January. Since then, Yew has contributed £2.1m in operating profit. There's no interim dividend, but the group has raised £97.7m through secured loan notes to repay a £34m term loan (debt is cheaper than equity for Dignity and makes financing more efficient), but the majority, £61.9m, will be returned to shareholders, equating to £1.08 a share. Meanwhile, a share consolidation will boost EPS.
Broker N+1 Singer expects pre-tax profit of £52.8m for the full year, giving EPS of 69.8p (2012: £46.2m and 62.4p).
| DIGNITY (DTY) | ||||
|---|---|---|---|---|
| ORD PRICE: | 1,493p | MARKET VALUE: | £855m | |
| TOUCH: | 1,490-1,495p | 12-MONTH HIGH: | 1,570p | LOW: 884p |
| DIVIDEND YIELD: | ** | PE RATIO: | 22 | |
| NET ASSET VALUE: | 149p* | NET DEBT: | £322m | |
| Half-year to 28 Jun | Turnover (£m) | Pre-tax profit (£m) | Earnings per share (p) | Dividend per share (p) |
|---|---|---|---|---|
| 2012 | 117 | 27.2 | 38.7 | 5.36 |
| 2013 | 133 | 32.0 | 42.1 | ** |
| % change | +14 | +18 | +9 | - |
*Includes intangible assets of £252m, or 440p a share **Cash return to shareholders in lieu of interim dividend of 108p a share to be paid in August 2013 | ||||
