Dignity Plc (LON:DTY) share plummeted in Wednesday morning’s deals as profit fell short of expectations and it warned over regulation.
Revenue reduced by 4% to £338.9mln from £353.7mln, and, operating profit dropped 41% to £44.8mln. Cash generation reduced to £64.6mln down from £104.2mln.
Pre-tax profit amounted to £44.1mln, compared to a £18mln loss in the previous year.
The company cautioned investors over regulatory pressure as the Competition and Markets Authority (CMA) undertakes a review of the funeral industry and the financial services attached to it.
As it braces for a negative impact, the company has today said it will delay “key aspects” of its business transition plans.
“Whilst we were pleased with the progress we made and the financial performance we delivered in light of the competitive environment, we need to be cautious in the coming months until the CMA's conclusions are finalised,”
“Their report could materially impact the industry and the size and shape of our business.”
Dignity shares fell 93p or 18.6% to trade at 406.76p each.
Stockbroker Peel Hunt said it expects to cut its forecasts for 2020. It already today repeated a ‘sell’ recommendation and lowered target prices to 300p from 500p.