Dignity’s (DTY) underlying operating profits grew by 6 per cent in the first half, as the company provided more funeral services during the pandemic.
The outbreak of Covid-19 pushed the number of deaths in the UK up by more than a fifth, compared with the same period last year. While this meant that Dignity met higher demand from the bereaved, average income per funeral fell as its services were restricted. The proportion of clients opting for the full service fell to just over a quarter in the second quarter this year, compared with over half in the same period in 2019.
Average revenue per cremation also fell to £151 from £273 last year, as crematoria were required to keep their grounds mostly closed and memorial sales dropped.
The group says it is planning for localised second peaks in the third quarter of this year, although the business has also prepared for the possibility of fewer deaths than first anticipated by the Office for National Statistics (ONS). As such, Dignity has restructured its trading assets, which should improve its covenant headroom in the coming quarters.
The company also noted that it was still awaiting the findings from an industry-wide investigation by the Competition and Markets Authority (CMA). A provisional decision report is expected by the end of August this year.
The consensus forecast EPS for the full year is 47.13p, rising to 42.51p in 2021.
| DIGNITY (DTY) | ||||
| ORD PRICE: | 252p | MARKET VALUE: | £126.1m | |
| TOUCH: | 246-252p | 12-MONTH HIGH: | 616p | LOW: 216p |
| DIVIDEND YIELD: | nil | PE RATIO: | NA | |
| NET ASSET VALUE: | * | NET DEBT: | £486.3m** | |
| Half-year to 26 Jun | Turnover (£m) | Pre-tax profit (£m) | Earnings per share (p) | Dividend per share (p) |
| 2019*** | 176 | 58.3 | 95.0 | nil |
| 2020 | 197 | -13.6 | -20.6 | nil |
| % change | +12 | - | - | - |
| Ex-div: | na | |||
| Payment: | na | |||
| *Negative shareholders' funds **Includes lease liabilities of £7.5m ***Restated | ||||
