British funeral planner Avalon has begun tapping the market for expatriate Germans and Italians amid fears of falling revenues from Brexit-hit Brits.
A large portion of Avalon’s business includes offering pre-planned funeral services to British clients living in the EU, but chief executive Paul Wilson said that Brexit is threatening that market.
“Obviously one of the key concerns I have in Europe - which is why we’re looking at other markets in Europe to ensure it continues sustainability - is actually that people don’t move abroad in the future because of Brexit or they lose an appetite for moving abroad.”
More than 21,000 of Avalon’s 55,000 live plans are held by European clients outside the UK.
Brits are not only facing uncertainties regarding their right to live in the EU, but have seen their purchasing power diminished as a result of the pound’s collapse in the wake of the referendum.
Mr Wilson said many of Avalon’s clients have felt the squeeze.
“If they’re getting their pensions paid in pounds, they will actually effectively have less to spend over there because of the falling pound against the euro,” he explained.
“We actually sell our plans in sterling as a choice for the customer ... but again if their cost of living has gone up by 20 per cent to 30 per cent because of the falling pound, they may want to keep that money.”
Mr Wilson assured that clients are not foregoing funeral financing plans altogether, though some are paying the maximum they can up front in order to reduce future payments amid economic uncertainty.
But Avalon is now looking to tap a broader market of expatriates in a bid to diversify its revenue stream.
“We’re actually in negotiations with other European countries who are still moving out, such as southern Irish people who are expats, Germans who are expats, and we’re also in negotiations in Italy as well at the moment.
“Even if UK residents do stop moving abroad we will still keep looking at other avenues and other markets in Europe.”
Group revenue, which accounts for sales across both the UK and European business, came in at £24.6 million in the 12 months to June 30, 2016, up from £21.1 million a year earlier.
Mr Wilson is now expecting further growth in 2017.
“We had to modernise quite a few things at Avalon, we had to change how we operate as a business, so I think we saw a jump because of that (in 2016) but I definitely think we should be seeing between 15 per cent and 20 per cent at least of revenue growth within Avalon per annum.”
Avalon made headlines in recent years for arranging bespoke funerals but the chief executive said he expects clients to return to basics.
“I think simple funerals will actually be on the increase. A lot of people may be moving away from the traditional big ceremony, and so on and so forth ... as an industry what we’ll have to do is, we need to look at the rising costs of funerals for people who are lower socio-demographic, who can’t afford it.”