Funeral operator Dignity achieves higher half-year profit

31st Jul 2013 10:40

UK funeral services provider Dignity unveiled a 17.6 per cent increase in pre-tax profit in the first half to 32m pounds, buttressed by a 5.6 per cent rise in the number of deaths.Revenue in the 26 weeks to June 28th jumped 14.3% to £133.2m while underlying earnings per share rose 17.6% to £44m.Underlying operating profits came to £45.3m, up 15.6% and slightly ahead of the company's expectations. The group said funeral operations have performed strongly, with client satisfaction high and average incomes robust. The crematoria division experienced volume growth as recently opened locations continue to mature. While the number of pre-arranged funeral plan sales were slightly down on the prior year, good cost control resulted in operating profit before recoveries growing year on year. Since the acquisition of Yew Holdings in January, the business achieved operating profits of £2.1m in line with expectations. Mike McCollum, Chief Executive of Dignity, said: "The first half of 2013 has seen a strong operating performance from our established operations and our largest single acquisition. Since the period end, we have announced a proposed third return of cash since flotation. "The group remains on track to achieve the board's expectations for the full year."No interim dividend was issued due to its fundraising on July 30th when it completed an issue of further secured notes. It raised £97.7m of gross proceeds which will be used to repay the firm's £34m term loan obtained on the acquisition of Yew Holdings and to provide shareholders with a £61.9m return of cash equating to £1.08 per ordinary share. Shares fell 2.08% to 1,505p at 11:17 on Wednesday. RD