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Dignity sticks with full-year outlook despite strong second quarter

Published: 08:51 07 Jun 2018 BST

Funeral director
The board continues to believe that trading during 2018 will be volatile

Dignity PLC (LON:DTY) said in a trading statement ahead of its annual general meeting (AGM) that trading in the second quarter had remained strong.

The funeral services provider started the year with a profit warning as a result of increased price competition but responded with price cuts of its own, cutting the price of a simple funeral by an average of 25% while the group’s traditional funeral service has seen a price freeze in the majority of locations.

READ: Dignity shares surge as it predicts full-year results ahead of market expectations​

The action taken seemed to do the trick because in April the group raised profit expectations for the full-year; attendees of the AGM hoping for another increase in profits guidance will be disappointed, however, as the group stuck with its current outlook guidance.

Dignity said it was too early to conclude that the trading experienced in the year-to-date was indicative of the likely funeral price and volume mix for the full-year.

The results of the ongoing price and service trials across the group's entire portfolio will play a big part in its future market position but the AGM statement said the trials are still at a very early stage and “it is not yet possible to draw any meaningful conclusions”.

The board continues to believe that trading during 2018 will be volatile.

Last Friday, the share price was hit by news that the Competition and Markets Authority (CMA) is to review the UK funerals market to ensure that people are not getting ripped off but in the AGM statement, the group once again said it welcomed the investigation.

READ: Dignity shares buried as CMA launches investigation into funerals market​

“We support the Treasury consultation on the funeral plan sector and the Competition and Markets Authority market study of the funeral and crematoria industries,” the statement said.

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