Funeral group Dignity said it was braced for an outbreak of avian flu as it reported good trading during its third quarter.
The Sutton Coldfield firm, which is Britain's largest single provider of funeral services, cremations and funeral plans, added it was still on course to meet expectations despite a slight dip in the death rate.
Group revenue for the 39 week period ended September 30 increased by 7.3 per cent to £107.7 million from £100.4 million last year.
Meanwhile operating profit for the same period increased by 11.7 per cent from £28.3 million to £31.6 million.
City expectations of annual profits are between £40 to £41 million and a turnover figure of £142 to £144 million.
Chief executive Peter Hindley said: "The group continues to trade well notwithstanding that deaths in the third quarter are estimated to be approximately 2.5 per cent lower than last year.
"However, we remain on track to achieve our expectations for the full year."
Mr Hindley said the mild autumn could be responsible for the reduction in the death rate, but the company had compensated by making savings.
He said: "Our revenues have increased due to a number of acquisitions we have made. We have bought a few small private business in London and the West Country.
"Meanwhile customers have been spending slightly more. But we have improved the bottom line through very tight cost control. We know the deaths are low so we have controlled the costs."
Mr Hindley said Dignity would be ready to cope with the any outbreak of avian flu amid fears it could cost thousands of lives,
He said: "We have a contingency plan in case there is a major epidemic. The biggest bottle neck would be at crematoria. We own 22 crematoria, and we would make sure the crematoria they worked 24 hours a day and at weekends if need be."
Sebastien Jantet, an analyst at Investec Securities, said: "We are leaving our full year forecasts unchanged. While the death rate remains challenging we believe there is more than enough slack built into our forecasts to absorb any further weaknesses."