Dignity reports an 8% decline in underlying profit due to higher overhead costs

Dignity reports an 8% decline in underlying profit due to higher overhead costs
Written by:
Wajeeh Khan
November 9, 2020
  • Dignity reports an 8% decline in underlying profit due to higher overhead costs.
  • The funeral services provider's underlying revenue was 4% higher than last year.
  • The UK firm says 44% of the funerals it conducted in October were full-service.

In a report on Monday, Dignity plc (LON: DTY) said that its revenue in the first three quarters of the ongoing fiscal year combined, came in 4% higher. The funeral services provider attributed the increase to the ongoing Coronavirus pandemic that saw it conducting more cremations and burials this year. Dignity also said that it was no longer looking for a new CEO.

Shares of the company were less than 1% down in premarket trading on Monday, but jumped 4% on market open. On a year to date basis, shares of the company are now close to 6% down in the stock market. Confused about choosing a reliable stockbroker to trade online? Here’s a comparison of the top few to make selection easier for you.

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Dignity plc reports £234.5 million of underlying revenue

According to Dignity plc:

“Following the terrible impact of COVID-19 in the second quarter this year, the number of deaths in the third quarter was broadly flat on the prior year.”

The COVID-19 crisis has so far infected more than 1.1 million people in the UK and caused over 49 thousand deaths.

In the first nine months that concluded on 25th September, one of the largest providers of funeral services in the United Kingdom said that it conducted 61,700 funerals countrywide, versus the year-ago figure of a much lower 52,100.

Its underlying revenue in the period printed at £234.5 million. Underlying profit, on the other hand, posted an 8% year over year decline due to higher overhead costs.

Dignity says 44% of the funerals in October were full-service

As per Dignity, people opted for simpler funerals in accordance with social distancing in recent months. Before the government announced new COVID-19 restrictions, 44% of the funerals it conducted in October, however, were full-service.  

A funeral, therefore, cost £2,480 in October on average, versus a slightly lower £2,381 in Q3. In separate news from the United Kingdom, travel retailer On the Beach Group plc said that cancellation rates were more than 90% across summer this year as the Coronavirus pandemic brought the demand for travel and tourism to a near halt this year.

Dignity plc performed fairly downbeat in the stock market last year with an annual decline of more than 10%. At the time of writing, the funeral services provider is valued at £281.61 million and has a price to earnings ratio of 21.49.