Dignity first half profits down as death rates stabilise

(ShareCast News) - Funeral company Dignity said first half results were slightly ahead of expectations, boosted by a stronger second quarter, but added that it expected death rates to return to 2014 levels after an "abnormally high" 2015 helped produce an "exceptional result".Pre-tax profits fell 7.8% to £41.5m while revenues fell slightly to £158m from £158.7m, as Dignity said it expected full year numbers to be in line with expectations.Deaths across the UK fell by 4.7% to 302,000 which led to a 6.9% fall in underlying operating £55.6m. Underlying earnings per share decreased 8.5% to 67.7 pence per share, reflecting the impact of a fixed finance charge on reduced operating profits.Basic earnings per share were 65.9p a share, down 7.2%.Dignity said although this would mean reported underlying operating profit in 2016 slightly below the prior year, it remained committed to its target of increasing earnings per share by an average of 10% over the medium-term."Compared to long term trends, the number of deaths in 2015 was abnormally high, helping the group deliver an exceptional result in 2015. The group continues to expect this unprecedented increase in deaths to reverse in 2016. Its current assumption remains that the number of deaths in 2016 will be broadly comparable to 2014," Dignity said.Although as expected underlying operating performance in the first half of the year was lower than in 2015, underlying operating profit was approximately 22% higher than the same period in 2014, when the group reported £45.6m, and underlying earnings per share was approximately 45% higher than 2014's 46.7p.