No-frills funer­als could help Dig­nity in ‘tougher’ mar­ket

The Daily Telegraph - Business - - Business - By Jack Tor­rance

SHARES in Dig­nity dropped 8pc yes­ter­day af­ter the boss of Bri­tain’s only listed fu­neral provider warned of an “in­creas­ingly com­pet­i­tive en­vi­ron­ment” that is cre­at­ing “chal­lenges” for the com­pany.

Chief ex­ec­u­tive Mike McCol­lum said: “As we’ve been say­ing for some time, in our fu­neral busi­ness we con­tinue to see in­creas­ing competition, both in terms of new peo­ple com­ing into the mar­ket, and in terms of price competition.”

Dig­nity has been at­tempt­ing to stave off this competition by ac­quir­ing some of its ri­vals, Mr McCol­lum said, and it has also spent an ad­di­tional £1m so far this year on dig­i­tal mar­ket­ing.

Last year it launched Sim­plic­ity Cre­ma­tions, a no-frills op­tion start­ing at £1,095, where the de­ceased is col­lected, placed in a sim­ple cof­fin and cre­mated with­out a fu­neral ser­vice. Their ashes can be re­turned to their fam­ily in a card­board con­tainer for an ex­tra £75.

That is now at­tract­ing 15 to 20 cus­tomers a week, Mr McCol­lum said, adding that Dig­nity could sell up to 1,000 of the di­rect cre­ma­tions next year.

The low cost of each such cre­ma­tion could sig­nif­i­cantly boost Dig­nity’s bot­tom line, he sug­gested.

“It’s pretty small but it’s in­ter­est­ing that an on­line-only busi­ness is im­me­di­ately prof­itable for us and we hope that we might be able to do a cou­ple of other new dig­i­tal-type busi­nesses.

“What is be­com­ing clear is that there is a grow­ing price-con­scious seg­ment in the fu­neral busi­ness.”

Mr McCol­lum was speak­ing af­ter Dig­nity re­ported its un­der­ly­ing prof­its grew 5pc to £79.4m in the 39 weeks to Sept 29, de­spite the num­ber of deaths climb­ing only 1pc. Rev­enues were up 6pc to £243.9m.

“The bot­tom line is the busi­ness is per­form­ing as ex­pected, our ex­pec­ta­tions re­main pos­i­tive and there’s no change to our think­ing for the rest of the year,” Mr McCol­lum said.

The com­pany ac­quired 20 fu­neral lo­ca­tions and one cre­ma­to­rium, and opened 20 satel­lite lo­ca­tions in the pe­riod. Dig­nity shares closed down 204p at £22.53.

Mike McCol­lum, chief ex­ec­u­tive of Dig­nity, says the com­pany is op­er­at­ing in an in­creas­ingly com­pet­i­tive sec­tor

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