LONDON (Alliance News) - Dignity PLC on Monday said first-quarter performance fell short of its own expectations, due to far fewer deaths than forecast.
Underlying revenue in the first quarter of 2019 dipped 15% to GBP81.1 million, with underlying operating profit down 42% to GBP21.7 million.
The number of deaths in the period was 159,000, down 12% on the year before, Dignity said.
"Operating performance in the first quarter was below the board's expectations as a result of the significantly lower than expected number of deaths. Funeral market share and average income were in line with the board's expectations," said Dignity.
"Historical data indicates it is likely this proportional decrease will not continue throughout the remainder of the year and that the full year will finish within approximately 3% of the previous year," the firm added.
Divisionally, Funeral underlying operating profit fell to GBP18.4 million from GBP27.9 million, and Crematoria slipped to GBP10.9 million from GBP13.0 million.
Dignity's new Funeral service offering and pricing has continued to get a positive response, Dignity said, with Funeral market share broadly flat at 12%.
In Crematoria, market share was broadly flat at 11%, and Dignity said the "particularly strong" performance was mainly due to the rising popularity of direct cremations.
Looking ahead, performance for 2019 will rely on the number of deaths remaining stable on the year before. If the number of deaths in 2019 is 3% down on 2019, Dignity could post underlying operating profit between GBP3 million and GBP4 million lower than expected.
"Clearly, this would require a significant increase in the number of deaths compared to last year in the second half of the year and would result in the financial performance for the year being more heavily weighted towards the second half of the year," said Dignity.
Dignity's Chief Executive Mike McCollum commented: "Our primary focus for 2019 remains the execution of our transformation programme, which seeks to build a more coherent, cohesive and technology-enabled business, geared to meeting the changing needs of our customers, whilst remaining focused on excellent client service.
"This will deliver our vision to lead the funeral sector in terms of quality, standards and value-for-money."
Dignity shares were down 6.5% in early trade Monday, quoted at 632.00 pence each.
