Companies: DTY   

Despite a dip in mortality rates, funeral services provider Dignity reported impressive maiden interims to 25 June, beating analysts forecasts. The only UK-listed company in the death business floated in April, raising £123m to repay certain debts and improve the shareholder base. The country's biggest single provider of funerals, cremations and prearranged funeral plans, unveiled a 31% jump in underlying profits to £12.3m in half one, on turnover raised 3.6% to £69.1m. This was despite a 3.6% fall in mortality rates last year. After exceptionals, goodwill and nonrecurring finance charges, pre-tax losses grew to £3.9m (£1.3m). Dignity performed 35,100 funerals from its network of 511 branches, 19,800 cremations at its 21 crematoria and sold 7,900 prearranged funeral plans. And chief executive Peter Hindley insists that, historically, fluctuations in recorded deaths tend to be self-correcting - so the board's view on medium-term death rates remains unchanged. During June and July, Dignity acquired three funeral businesses for £2.9m cash. Further second half acquisitions are on the menu. The group has also opened two new funeral homes, which will share their costs with Dignity's nearby funeral homes. Analysts upgraded their 2004 numbers in the wake of the figures - investors can expect pre-tax profits of £22m from £134.4m sales, giving earnings of 18.2p a share. All in all, Dignity is a seemingly robust venture. But the debt pile of £159 million worries us. Avoid.