LONDON (Alliance News) - Funeral services provider Dignity PLC saw its shares rise in early trade on Wednesday after the company said its pretax profit surged higher in the first half on the back of improved revenue and said it will beat its expectations for the full year thanks to the high number of deaths in the first half.
The FTSE 250-listed company said its pretax profit for the 26 weeks to June 26 was GBP45 million, up 43% from the GBP31.5 million it posted a year earlier as revenue rose to GBP158.7 million from GBP133.1 million. It said it will pay an interim dividend of 7.14 pence, up 10% from the 6.49 pence it paid a year earlier.
Dignity said the number of deaths in the UK was up by 13% year-on-year, maintaining the high level it had flagged in its first quarter trading update. The group has acquired 46 funeral locations and opened one satellite location since the start of the year, including the GBP38 million acquisition of 36 locations from Laurel Funerals, which it completed in July.
As a result of the higher number of deaths seen in the first half, Dignity expects its results for the full-year will be ahead of its previous forecasts, though it keeps its outlook for 2016 the same on the possibility that the high number of deaths in the first half of this year will not repeat.
"This has been a very strong half year for the group. Client service standards remain excellent and I am delighted with our performance. We have invested GBP47.2 million in acquisitions so far this year from cash on our balance sheet which should help to create further value for our shareholders in the future," Mike McCollum, Dignity's chief executive, said.
Dignity shares were up 4.2% to 2,469.5 pence in early trade on Wednesday, one of the best performers in the FTSE 250.
By Sam Unsted; samunsted@alliancenews.com; @SamUAtAlliance
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