UK funeral director Dignity sank to a loss last year even though the coronavirus pandemic caused a sharp rise in the death toll in the country.
The company fell to a loss before tax of £19.6m in the 12 months to December 25, compared with a profit of £44.1m in 2019, despite the pandemic causing a 14 per cent rise year on year in the number of UK deaths.
While revenue increased 4 per cent to £314.1m, higher personal protective equipment costs and government limits on how many people can attend funerals had contributed to weaker performance, Dignity said.
Government guidance continues to restrict the attendance at funerals to 30 people in England, 20 in Scotland and 25 in Northern Ireland. There is no limit on attendees in Wales as long as the venue respects social-distancing rules.
Dignity has not paid a dividend since 2019 and does not expect to do so until it has returned to a “sustainable and stable financial footing”.
Shares in the group have almost doubled in the past 12 months and jumped 5 per cent in early morning trading on Wednesday.
The company said the most difficult period of the year had been during the second quarter, when there was a 47 per cent year-on-year rise in deaths.
The UK’s total 663,000 deaths during 2020 was the most in a single year since 1918, according to Dignity.
The company has added more than 300 funeral locations in the past 20 years but said its share of the market had fallen from 11.8 per cent in 2001 to 11.7 per cent in 2019.
Dignity’s share of the cremation market, however, has grown 70 per cent over the same period and the company said recent investments in audiovisual equipment at the majority of its crematoria had “proven to be a timely and invaluable addition to the services we offer” as the pandemic limited attendance.
About three-quarters of all funerals result in cremation, with the remainder opting for burials, the company said.
In addition to having to contend with the pandemic, the UK’s only listed funeral director has been under scrutiny from the Competition and Markets Authority, which was seeking to establish whether consumers were being provided with a fair deal by the wider industry.
A report published in December recommended that all funeral directors and crematorium operators “disclose prices in a manner that will help customers make more informed decisions” and that “payments which may incentivise hospitals, care homes or hospices to refer customers to a particular funeral director” should be prohibited.
Martin Coleman, CMA panel inquiry chair, said the watchdog “will be keeping a close eye on this sector to make sure our remedies are properly implemented”.