(Alliance News) - Dignity PLC on Thursday said profit for 2021 is expected to have declined amid disruption from the Covid-19 pandemic.
The funeral services provider said it expects underlying operating profit for 2021 to be GBP54.7 million, 9.3% below the GBP60.3 million registered for 2020.
In the fourth quarter of the year, underlying operating profit was GBP11.3 million, down from GBP12.2 million a year before.
"The Covid-19 pandemic has been a period of significant disruption for the wider funeral market, with various government restrictions limiting the group's business activities, whilst the elevated death rate has driven a higher number of funerals and cremations in 2021 compared to the five-year average of 590,000 deaths per year," Dignity said.
Given uncertainty around the UK death rate in the near-term due to the distorting impact of the pandemic, Dignity has decided to seek a temporary covenant waiver. The firm said a special committee of bondholders have examined the proposal and found it acceptable.
"The group delivered a resilient performance in 2021 despite continuing market disruption from Covid-19. Whilst it is still early days, we are confident that the ongoing strategic changes at Dignity will position the business to grow and to best serve families for their end-of-life needs," said Chief Executive Gary Channon.
He added: "We are thankful for the support of our noteholders as we seek this covenant waiver which will allow us to continue to implement these important strategic changes despite the uncertain backdrop of the Covid-19 pandemic."
Shares in Dignity were down 1.4% at 645.00 pence in London on Thursday.
By Lucy Heming; lucyheming@alliancenews.com
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