Trading Update for the First Quarter 2018

RNS Number : 2421L

Dignity PLC

18 April 2018

 

18 April 2018

Dignity plc

('Dignity' or 'the Group')

Trading Update for the First Quarter 2018

On 14 March 2018 Dignity, the UK's only listed provider of funeral related services, announced its preliminary results for the 52 week period ended 29 December 2017 and stated that, following the strategic decision to reduce some funeral prices and holding others in response to changing market conditions and increased competition, it expected trading in 2018 to be volatile as the relationship between funeral price, service and volume would take time to settle down.  In that preliminary announcement we indicated that, although too early to make any conclusions, the initial analysis of the mix of funerals in that first seven weeks, since the introduction of the reduced simple funeral price, had shown a step change in the number of simple funerals as a percentage of all funerals conducted by the Group but that this was at a run rate of approximately 15 per cent (lower than the 20 per cent originally anticipated by the Board).  Additionally, the absolute number of deaths in the first seven weeks of 2018 were approximately seven per cent higher than the prior year. The Office of National Statistics expects a decline of 0.2 per cent for the year as a whole.

The trend highlighted in that results announcement has continued throughout Q1 and overall deaths are up approximately eight percent to 181,000 from 167,000 in the comparative period last year. Additionally, the anticipated mix of simple funerals as a percentage of total funerals has continued at levels lower than the Board's initial forecast. 

Dignity's Q1 revenue was approximately £95 million compared to £93 million in the prior year and EBIT was approximately £37.5 million in line with the prior year, but significantly ahead of the Board's expectations.

Despite this positive start to the year, the Board still believes it is too early to conclude that the trading experienced in Q1 is indicative of the likely funeral price / volume mix going forward and the Group continues to conduct a significant number of price and service trials across its entire portfolio.  The data from these trials is still at a very early stage and it is not yet possible to draw any meaningful conclusions. The Board continues to believe that trading during 2018 will be volatile but based on the first quarter results believe that results for the full year will be ahead of current market expectations. In August 2018 the Board will be able to update the market as to results of these trials and the operational review being undertaken in conjunction with L.E.K. Consulting. The Board expects to announce the full first quarter results on 14 May 2018.

Ends

Market Abuse Regulation

The information contained within this announcement is deemed to constitute inside information as stipulated under the Market Abuse Regulations (EU) No. 596/2014. Upon the publication of this announcement, this inside information is now considered to be in the public domain.

For further information please contact:

Dignity
Mike McCollum, Chief Executive	[phone]
Steve Whittern, Finance Director
Buchanan Communications
Richard Oldworth	[phone]
Catriona Flint

 

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