7 Nov 2016 07:00
For immediate release 7 November 2016
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 2016.
39 week period ended 23 September 2016 | 39 week period ended 25 September 2015 | 39 week period ended 26 September 2014 | 2016 versus 2015 increase/ (decrease) (per cent) | 2016 versus 2014 increase (per cent) | |
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Revenue (£million) | 229.3 | 227.0 | 196.4 | 1.0 | 16.8 |
Underlying operating profit1 (£million) | 75.8 | 78.1 | 64.0 | (2.9) | 18.4 |
Number of deaths | 434,000 | 446,000 | 409,000 | (2.7) | 6.1 |
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1 Underlying operating profit is calculated as profit excluding profit (or loss) on sale of fixed assets and external transaction costs.
2 Amounts for 2014 are included in this announcement to provide a more meaningful comparative for 2016 performance following the unusually high number of deaths in 2015.
The results for the year to date are slightly ahead of the Board's expectations, driven by the higher number of deaths in the second and third quarters of the year. Underlying operating profits in the third quarter are £1.8 million higher than the same period in 2015.
The Group has acquired 11 funeral locations for an aggregate investment of £11.3 million and has opened nine satellite locations in the period to 23 September 2016. Since this date, the Group has acquired a further two funeral locations.
The Group is also pleased to confirm the acquisition of the remaining leasehold crematorium location from Funeral Services Limited (trading as Co-op Funeralcare) completed in October. As such, the entire acquisition of five crematoria (three freehold locations and two leasehold locations) from Funeral Services Limited has now completed for consideration of £43 million.
There have been no other significant transactions since the period end date.
Although as expected, the deaths in 2016 have been lower than the exceptional level seen in 2015, they have been higher than the Group anticipated based on longer term trends. At the same time, the Group's funeral market share, having been stronger in 2015, is lower than the Group expected. Taking these factors into account the Group expects underlying operating profits to be slightly ahead of current market expectations for 2016. Its expectations for 2017 and beyond remain positive and unchanged.
Mike McCollum, Chief Executive of Dignity, commented:
"Our objective is to lead the funeral sector in professional standards and service. I believe we do this and that we continue to improve. Our clients value this which is why they return to us and recommend us, allowing us to report strong financial results today. Our expectations are that 2016 will be a stronger year than previously expected and remain positive and unchanged for 2017 and beyond."
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 further information please contact:
Mike McCollum, Chief Executive
Steve Whittern, Finance Director
Dignity plc +44 (0) 121 354 1557
Richard Oldworth
Sophie McNulty
Catriona Flint
Buchanan +44 (0) 207 466 5000
www.buchanan.uk.com