9th May 2016 08:58
LONDON (Alliance News) - Funeral services provider Dignity PLC confirmed a decline in the UK's death rate is emerging in 2016, as had been expected following an exceptionally high number of deaths in 2015 which had boosted the group's results that year.
In Dignity's annual results announcement in March, the FTSE 250-listed company posted growth in profit and revenue and pushed up its dividend payout after the number of deaths in the UK rose to 588,000, up 7.0% year-on-year and the largest growth in the death rate in Britain for 60 years. This rise meant Dignity's funeral and cremation parlours were much busier than had originally been anticipated.
The growth in deaths in 2015 has not been fully explained, but experts have floated a number of possible explanations.
In the first months of 2015, the rise in the death rate has been at least partially attributed to cold weather and the flu season, but health experts said this does not explain the rise entirely.
Professor Dominic Harrison, an adviser to Public Health England and director of public health for Blackburn and Darwen, told the BBC earlier this year the rise was unlikely to be explained by winter infections or by growth in the elderly population in the UK.
He claimed cuts to local authority social care budgets in England in particular have affected preventative care services which would normally provide one-to-one contact for the elderly. Other issues blamed include cuts made to health budgets and the pressure this has put on the National Health Service.
Dignity had flagged it anticipated a return to a death rate similar to 2014 this year and that appeared to be borne out in its figures reported on Monday. The company said 156,000 deaths occurred in Britain in the 13 weeks to March 25, compared to 175,000 a year earlier and 147,000 in the same period in 2014.
In line with the company's expectations, this resulted in revenue declining 5.0% in the first quarter to GBP81.2 million from GBP85.5 million a year earlier. Underlying operating profit, which strips out one-offs, slipped to GBP31.1 million from GBP35.8 million.
Dignity reiterated the number of deaths in the first quarter of 2015 had been "abnormally high compared to long-term trends", which had helped it deliver an "exceptional result" in 2015. It continues to forecast the number of deaths in the UK in 2016 will decline broadly to levels seen in 2014.
Dignity said average income from its funerals remained "robust" in the first quarter, and it has good control of its overhead costs. Since the start of the year, Dignity has acquired one new funeral location
"I am pleased with the group's performance in the first quarter, which was consistent with our expectations and supported by surveys that continue to demonstrate the outstanding work being done by our staff. The group's expectations for the full year remain unchanged," said Chief Executive Mike McCollum.
Dignity shares were down 1.3% to 2,473.00 pence Monday.
By Sam Unsted; [email protected]; @SamUAtAlliance
Copyright 2016 Alliance News Limited. All Rights Reserved.
Related Shares:
DTY.L