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Dignity PLC Q1 Underlying Operating Profit, Revenue Down; Warns On FY19 Profit

Dignity Plc. (DTY.L), a provider of funeral related services, reported Monday that its first-quarter underlying operating profit declined 42 percent to 21.7 million pounds from last year's 37.5 million pounds.

The company noted that operating performance in the first quarter was below the Board's expectations due to the significantly lower than expected number of deaths.

Underlying revenue fell 15 percent to 81.1 million pounds from prior year's 95.1 million pounds.

The absolute number of deaths in the quarter were 159,000, down 12 percent from 181,000 a year ago.

The company performed 19,200 funerals in the first 13 weeks of the year, down from 21,400 last year. Average income per funeral was approximately 190 pounds lower than the same period in 2018,.

Crematoria performed 18,000 cremations in the period, down from 19,100 last year.

On March 28, the Competition and Markets Authority or CMA confirmed its widely anticipated full market investigation into the funeral and crematoria sector. Dignity said it is cooperating fully with the CMA's enquiries, and has established a strong working group of internal and external resource.

Looking ahead, the company said that achievement of full year expectations will rely heavily on the number of deaths in the remainder of the year compared to 2018. Historical data over the last 20 years indicates that the final volume is likely to be within three per cent of the previous year.

If deaths were 580,000, approximately three percent lower, underlying operating profits for the full year could be approximately 3 million pounds to 4 million pounds lower than originally anticipated, the company noted.

The company continues to expect average income from funeral operations for the remainder of the year to be approximately 2,940 pounds as it continues its trials and plans to implement its tailored funeral nationally.

Mike McCollum, Chief Executive of Dignity, said, "Whilst the number of deaths in 2019 may mean that our short-term financial performance is lower than we originally anticipated, I am confident that the changes we are making will allow us to generate sustainable growth in the medium to long-term."

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