Funeral provider Dignity’s profits slump as ‘cost of dying’ rises

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Funeral provider Dignity has been hit by the rising “cost of dying”, as larger vitality costs and labour prices weigh on profits.

The group, which operates greater than 700 funeral areas throughout the UK, mentioned enterprise had suffered from falling demise charges — as the Covid pandemic eased — and inflationary pressures.

It reported a pre-tax loss of £156mn within the six months to June, down from a revenue of £50.5mn the earlier yr.

Dignity mentioned it could think about a short lived gas surcharge on cremation operations to mirror rising vitality prices.

Chief government Kate Davidson mentioned the cremation aspect of the enterprise was a “gas heavy process,” on prime of vitality prices related to the corporate’s manufacturing plant and fleet of autos.

Dignity can also be affected by a staffing scarcity, with 400 vacancies nonetheless unfilled, larger labour prices and dearer supplies used to make coffins.

“We are aware that the funeral sector is perhaps not what people necessarily go to straight away when they’re thinking about finding a job, so we do have a challenge really to share with people the amazing work our colleagues do,” mentioned Davidson.

Dignity’s share worth was down about 8 per cent on Friday morning to round 36p.

Revenue fell by 12 per cent to £167mn. Operating revenue was additionally down by greater than 60 per cent, which the corporate partly attributed to the introduction of lower-priced companies to spice up competitiveness.

The Co-operative, the UK’s different main nationwide provider of funeral companies, has confronted related pressures.

Shirine Khoury-Haq, the group’s chief government, mentioned on Thursday that suppliers had been growing their costs, notably crematoriums which might be heavy customers of fuel.

Customers are additionally slicing again. “We are seeing massive trading down to entry level products from high-end funerals,” she mentioned.

Direct cremations, additionally identified as unattended funerals, accounted for nearly a fifth of funerals in 2021, in line with Sun Life’s annual price of dying report. They embrace the preparation of the physique, the cremation and the return of the ashes, however no hearse, procession or funeral service.

They can price lower than £1,000, in contrast with the common price of a cremation at round £3,700 and a burial at nearer to £5,000.

First-half revenues at Co-operative Funeralcare fell barely to £139mn whereas underlying revenue was additionally down by over a 3rd to £11mn, partly as a result of the corporate decreased the costs of its most elementary funeral companies.

The newest pressures on the trade observe two years of disruption from the Covid-19 pandemic and elevated scrutiny and regulation.

Since July this yr, suppliers of pre-paid funeral plans have turn into topic to Financial Conduct Authority regulation and funeral administrators can not obtain fee funds for promoting them. Both Dignity and the Co-op are among the many 26 plan suppliers who’ve been authorised by the regulator.

That adopted an intervention by the Competition and Markets Authority in 2021, which required funeral administrators to show standardised tariffs and banned them from soliciting enterprise via hospices, palliative care centres and care properties.



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