* Britain’s only listed funeral firm says confident for 2013
* 2012 profits up 11 pct supported by unusually high death rate
* Average income per funeral has increased, sales of pre-paid plans doubled
By Isla Binnie
LONDON, March 6 (Reuters) - Dignity Plc, Britain’s only listed funeral services firm, forecast a profitable 2013 on Wednesday and raised its dividend in a sign of confidence that customers would not cut spending on their last rites.
Dignity, which owns 636 funeral locations and 36 crematoria in the UK, reported pre-tax profit of 46.1 million pounds ($69.7 million) in 2012, an 11 percent increase on the previous year and in line with broker expectations.
While the funeral business was supported by an unusually high death rate, around 2 percent above predictions, Dignity said average income per funeral also rose, despite widespread economic gloom.
“What’s interesting is that people even during the recession don’t seem to have traded down, they haven’t changed their behaviour,” Chief Executive Mike McCollum told Reuters. “I think very much what drives their behaviour is social and religious traditions.”
Sales of “pre-arranged” funeral plans, whereby customers plan and pay for their funerals in advance, have been particularly robust, more than doubling in the past five years across the sector, McCollum said.
Income from these pre-arranged plans is held in a trust from which Dignity has received a 1.5 million pound surplus in each of the past 6 years.
Dignity warned in November it may not receive this surplus in 2013 due to low gilt yields, but McCollum said this was not a cause for concern.
“Our expectations for 2013 aren’t changed regardless of that lack of that 1.5 so we think we can absorb that elsewhere,” he said.
The FTSE 250-listed company plans to pay a 10.75 pence dividend per share for 2012, giving shareholders a 10 percent higher return than they received last year.
Shares in Dignity, which have enjoyed a strong run recently, up nearly 60 percent since July, rose 1 percent to 1,315 pence on Wednesday.