The death rate rose 7 per cent last year, which makes funeral provider Dignity 's (DTY) full-year figures look pretty good. A greater number of funerals conducted at higher average revenue, in addition to tight cost control, left operating profit up 15 per cent at £95.5m. Statutory profit surged by comparison with the prior period, due to refinancing charges in 2014.
Roughly a quarter of the funerals performed last year were pre-arranged and chief executive Mike McCollum says rigorous customer service standards keep pre-bookings high. Approximately 38,000 new plans were sold last year (from 40,000 in 2014), taking the pre-arranged total to 374,000 (348,000 in 2014).
But historical trends tell us that a spike in the death rate is often followed by a decline, which has led management to forecast the number of deaths in 2016 will be "significantly lower" than in 2015. Hence the 7 per cent drop in the group's share price on results day.
For this reason, analysts at Investec Securities have forecast adjusted pre-tax profit of £70.3m for the 2016 financial year, giving EPS of 111p, compared with £72.2m and 114p in FY2015.
| DIGNITY (DTY) | ||||
|---|---|---|---|---|
| ORD PRICE: | 2,515p | MARKET VALUE: | £1.24bn | |
| TOUCH: | 2,513-2,520p | 12-MONTH HIGH: | 2,643p | LOW: 1,804p |
| DIVIDEND YIELD: | 0.6% | PE RATIO: | 22 | |
| NET ASSET VALUE: | * | NET DEBT: | £517m | |
| Year to 25 Dec | Turnover (£m) | Pre-tax profit (£m) | Earnings per share (p) | Dividend per share (p) |
|---|---|---|---|---|
| 2011 | 210 | 40.3 | 63.0 | 14.6 |
| 2012 | 230 | 45.4 | 65.0 | 16.1 |
| 2013 | 257 | 49.6 | 73.0 | 11.8 |
| 2014 | 269 | -67.7 | -104 | 13.0 |
| 2015 | 305 | 69.0 | 115 | 14.3 |
| % change | +14 | - | - | +10 |
Ex-div: 19 May Payment: 24 Jun *Negative shareholders' funds | ||||
