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13 Nov 2017 07:00
For immediate release 13 November 2017
Dignity plc
Third quarter trading update
Dignity plc (Dignity or the Group), the UK's only listed provider of funeral related services, announces its trading update for the third quarter of 2017.
39 week period ended 29 September 2017 | 39 week period ended 23 September 2016 |
Increase (per cent) | |
| |||
Revenue (£million) | 243.9 | 229.3 | 6 |
Underlying operating profit(a) (£million) | 79.4 | 75.8 | 5 |
Number of deaths | 440,000 | 434,000 | 1 |
| |||
Non-GAAP measures
The Board believes that whilst statutory reporting measures provide a useful indication of the financial performance of the Group, additional insight is gained by excluding certain non-recurring or non-trading transactions. These measures are defined as follows:
(a) Underlying operating profit is calculated as profit excluding profit (or loss) on sale of fixed assets and external transaction costs.
Following a very strong start to the year, the number of deaths in the third quarter was flat on the previous year. The Group's results for the period were in line with the Board's expectations with underlying operating profits increasing five per cent to £79.4 million (2016: £75.8 million).
As described in our interim report published in August, we continue to see significant competition across the business. Whilst our pre-arranged and crematorium businesses are performing strongly, we continue to see increasing price competition and new competitors in our funeral business. We remain focused on providing the highest level of service to our clients and improving our digital presence. The Group continues to anticipate incremental costs of up to £1.0 million in 2017 in relation to this evolving strategy. This is expected to be a recurring expense in future years, with costs likely to increase over time.
The Group has acquired 20 funeral locations and one crematorium for an aggregate investment of £28.8 million and has opened 12 satellite locations in the period to 29 September 2017. Since this date, the Group has acquired four funeral locations and opened one satellite location.
There have been no other significant transactions since the period end date.
Taking these factors into account, the Group's overall expectations for the year are positive and remain unchanged.
Mike McCollum, Chief Executive of Dignity plc commented:
"Following the Group's solid third quarter results expectations for the full year remain unchanged. The Board recognises the increasingly competitive environment and the consequential challenges facing the Group. Alongside the work being undertaken on the Group's digital strategy and our continued call for regulation of our markets, we are assessing other initiatives to help the Group build on its strong market position."
Dignity (2002) Limited (the holding company of those companies subject to the securitisation) has today issued reports to the Rating Agencies (Fitch and Standard & Poor's), the Security Trustee and the holders of the Secured Notes issued in October 2014 in connection with the securitisation.
Copies of these reports are available at http://www.dignityfuneralsplc.co.uk.
For more information
Mike McCollum, Chief Executive
Steve Whittern, Finance Director
Dignity plc +44 (0) 121 354 1557
Richard Oldworth
Catriona Flint
Buchanan +44 (0) 207 466 5000
www.buchanan.uk.com Dignity@buchanan.uk.com
Notes
An analysts' briefing will be held at 9:00 am this morning by telephone. Please contact Buchanan for dial in details if you wish to attend and have not already been invited to the call.
A recording of this conference call will subsequently be available at http://www.dignityfuneralsplc.co.uk.
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