THE UK's largest provider of funeral-related services has reported higher profits after its strongest year for the number of families planning ahead.

Dignity, which has 600 funeral locations including 35 crematoria, said the number of pre-arranged funeral plans on its books and yet to take place increased to 265,000 in 2011, from 238,000 the previous year.

The group allows customers to plan in advance and make provisions towards the cost through its guaranteed funeral plan.

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Dignity said underlying pre-tax profits rose 3% to £41.6 million in the year to December 30, as it increased its location portfolio by 33 in the year.

Sebastien Jantet, analyst at broker Investec, said Dignity had delivered "yet another set of strong results".

The Sutton Coldfield-based group said its funeral services division, which brings in the largest proportion of profits, had received investment of around £9.5m, with roughly half of this funding the replacement of its hearses and limousines.

The group's crematoria division saw operating profits rise 7% to £21.3m as it conducted 47,600 cremations, compared to 45,200 the previous year. Looking ahead, Mike McCollum, Dignity chief executive, said: "While 2012 has started more quietly than 2011, the board remains confident in the group's prospects and its expectations for 2012 remain positive and unchanged."