Dignity shares plunge as it suspends dividend
Funeral company Dignity’s shares plummeted today as it continued the suspension of its dividend following a 31 per cent drop in underlying pre-tax profit to £37.7m for 2019.
That fell short of an expected £38.7m to send Dignity’s shares crashing 23 per cent to 385.8p.
The UK’s only listed funeral provider said fewer people dying had hurt profit.
Deaths dropped three per cent last year from 599,000 in 2018 to 584,000.
Revenue declined five per cent to £301.3m from £315.6m due to the lower death toll.
Meanwhile, Dignity also offered a gloomy update on 2020 as it awaits the outcome of a competition review of the funeral market.
Funeral market probe could hurt Dignity
The Competition and Markets Authority (CMA) announced an investigation into the funeral industry in 2019.
“Their report could materially impact the industry and the size and shape of our business, non-executive chairman Clive Whiley said today.
“We are therefore for now, delaying key aspects of our transformation plan.”
“However, the need to maintain the highest levels of customer service through modern, efficient ways of working remains.”
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The CMA opened its report following concerns over rising funeral costs, which reportedly grew
T at twice the rate of inflation from 2005 to 2019.
The watchdog is due to report its market findings in April or May.
Dignity warned the probe could affect its operations in addition to falling income per funeral and cremation.
However, it stressed the business is strong and it remains too early to be sure of the impact.
This news came on the day it was announced the UK economy had produced zero growth in January, even before the coronavirus outbreak struck the UK.
Chancellor Rishi Sunak is under pressure to alleviate the pressure of coronavirus in his Budget today.