Co-op’s H1 Profits Increase Despite Declining Funeral Sales
The Co-operative Groups interim results for the opening half of 2019 highlight significant growth despite the fall in Funeral revenue.
Between January and June 2019, the Co-op’s Funeral and Life Planning sales fell by 6% to £163 million.
The Co-op attribute the declining sales to an unexpected 10% fall in the death rate and their conscious effort to hold prices despite a changing and competitive market.
The results based on International Financial Reporting Standards 16 (IFRS 16) accounting basis, highlight that underlying operating profit in the Funeral and Life Planning section of the business fell from £28 million in 2018 to £13 million in the opening half of 2019.
In the opening six months of 2019, 248,596 people died in England, according to Office for National Statistics data.
This death rate figure was 1.8% lower than the 253,185 deaths that make up the five-year average.
The figures also represented a 9.3% decrease on the 274,362 deaths in the opening half of 2018; a statistical anomaly which the Co-op were unable to anticipate based on current trends.
Funerals in the opening half of this year fell to 48,423 from 53,213 recorded between January and June in 2018.
Despite this slight dip, the Co-op’s overall performance has been positive with total sales increasing by 12% to £5.4 billion.
Further cementing themselves as the leading probate provider in the UK, the Co-op’s Legal Services brand continued to flourish with probate revenue increasing by over a third (37%) and estate planning revenue rising by a fifth.
Steve Murrells, Chief Executive of the Co-op, said:
“We’ve enjoyed another good six months where the strength of our business has led to a further £35 million of value being generated for our members and their communities. Our food business continues to perform strongly in a highly competitive market and has now recorded 22 consecutive quarters of like-for-like sales growth. As our largest business, it is providing the fuel for our growth in terms of member value and community impact.
“In funerals we are actively re-positioning the business to meet the changing needs of our members. We are the market leader but we will also lead the market in providing better choices and options for our customers in the years ahead. Likewise, the development in our insurance, legal and health businesses will enable us to significantly broaden the range of Co-op services, in areas where our members know the Co-op difference can be clearly seen.”
Have declining death rates impacted other funeral, estate planning and probate legal service providers?