Dignity Share Discussion Threads

[mr hangman] 29/3/2009 16:56

Stnick, "certainly in my professional experience" are you a undertaker ?
is so great, it would good having someone on the inside track posting

[jebenn1] 26/3/2009 16:07

My ha'penny worth on the subject of weather related deaths - there is strong evidence to suggest that much of the increase in deaths related to cold or hot spells is actually just a "harvesting" effect.

In other words the deaths are brought forward by a number of months or in some cases years by the extremes of weather. Therefore there is a deficit of deaths in the months/1-2 years after such a about of weather.

As far as Dignity is concerned these events will boost some sets of results and reduce others.

Similarly imagine there is a bird-flu related epidemic causing 50% deathrate in over 75's. Plenty of business for Dignity that one year but then the next year everyone who is left is fit and healthy and there will be far fewer deaths in the years following in that over 75's age group.

[romi2nikki1] 26/3/2009 15:45

sticky

It is a complex picture, but most of the evidence affirms that colder weather kills more. Pattern is less so where mean winter temps are reliably low, ie people habituate faster. Indeed last Nov and Dec when temps dropped v low for extended periods ( cf prev years), will have caused excess deaths_ many more if not for the statin effect. In the warmer temp regions excess winter deaths far more marked, even for average winters. It is the core temperature effect, which is more serious for old uns. Whereas in Summer provided they remain hydrated.............

Hope there wont be too many funeral pyres to confound the trend.

[stnick] 26/3/2009 14:45

romi,

in the uk a cold winter would normally show the highest levels of mortality vs any other Quarter of the year.

However, it is also true that unusually (for the UK) high sustained summer temperatures (i know it doesn't often happen) do increase mortality rates from spring, autumn and normal summer temperatures.

Summer of 2006 was an example of this - certainly in my professional experience it was - though it may have localised to my area of the North West.

Regs

[ted32] 26/3/2009 14:09

gswreland...Yes you are quite right. Looking at the utilities, they also are not looking good. However, I hoping that a bottom should be forming shortly.
I'll be averaging down with dty, scotish & southern and national grid.

[gswredland] 26/3/2009 13:55

Chart is not looking good here!

[ted32] 26/3/2009 13:51

melody...I could not agree more with you. Nevertheless, what with this pull-back I'm more inclined to think of DTY as a indexed-link stock. I feel fairly confident that the dividend in the coming years will exceed inflation.

I've topped up.

[melody9999] 26/3/2009 13:21

Interesting pull back. whilst the overall market was so bad, DTY was a safe haven . Now investors could be looking elsewhere to get a larger ROI as the market may be turning.

I guess the PE will also look expensive compared with the overall market too which is fine when the share is outperforming.....

[romi2nikki1] 26/3/2009 13:17

stnick
Did not claim that there would be a cut back on statin prescription. A few searches around epedemiological sites, should demonstrate that warmer summers contribute less to mortality than colder winters.

[stnick] 25/3/2009 17:40

Hyper,

i agree debt is a burden, but take the man who buys a house (with a mortgage) and the man who rents a house and saves up to buy the same house thus avoiding a mortgage, and after 25 years the guy who bought will be in a much better position.

It is extremely rare for any company to expand without the need for debt and those that do expand (without ground breaking technology) without using debt do so at a much slower rate.

The expansion through acquisition brings an income generating asset on board by the use of debt and this (as Madigliana and Miller taught us) is a cheaper way to expand than by tapping up shareholders for money.

Jeb,

good find - i think it is the lack of automated processes that makes the typical bamboo more expensive - ie hand made etc. The cardboard ones have to be particularly reinforced and actually require more engineering than a std coffin. Of course a solid wooden coffin would be most expensive of all (esp if it was a casket a la many american funerals) but very few people order one of those.

As i suggest, i still think the funeral business is pretty resilient in an economic downturn, but not totally immmune of course.

Regs

[hyper al] 25/3/2009 17:19

stnick

"re the comment on a company with any debt is not in profit, is like saying a person who has a house with a mortgage has no assets. And therefore is completely bonkers!!!"

They don't have any assets the title deads are held by the mortgage company. When you take out a mortgage the mortgage company has first call on the property.

Any debt IS a burden.

We will just have to agree to disagree on that one.

[jebenn1] 25/3/2009 17:06

Stnick,
After a little research, I stand corrected.
Found this website with coffin costs, and the bamboo/cardboard ones (in the environmental section) are significantly more expensive than I thought they would be.



My assumption was that without the need for brass handles and tooled joints/grooving on the wood, and with bamboo cheaper to produce than wood and lighter to transport from India/China, a babboo or cardboard coffin would be cheaper.

Except for the solid timber (as opposed to veneer) coffins this is not the case.

[serratia] 25/3/2009 13:31

That's what they're doing having spent quite a bit on buying last year.On balance I agree on the growth scenario as interest charges are well covered and sales as certain as anything in the market at present.

[ted32] 25/3/2009 12:53

There is so much consoldation over the coming years I would prefer that DTY
continue taking market share, rather than paying down debt.

[serratia] 25/3/2009 12:46

The debt is fairly high at £300m but they generated £38m cash after finance costs.It depends whether they use the cash to expand or pay down debt.Their market share is fairly low so there's plenty of growth to go for.

[stnick] 25/3/2009 12:42

There is no proposed cutback in Statin prescribing.

V cold winters will help things as well as warm summers help too.

People will still want to send off the rellies with dignity (no pun intended) and i thing will find the cash.

plus shortage of grave space may well mean people spend on a pre paid funeral to ensure they have somewhere to be laid to rest, which will be good for Co's like DTY.

I do not hold shares in DTY, just for the record.

[romi2nikki1] 25/3/2009 12:34

So long as people do not try to save money with bonfires, we should be ok. NHS cutback on dishing out statins, and a few v cold winters would send up the death rate!

[stnick] 25/3/2009 12:24

Hyper Al,

re the comment on a company with any debt is not in profit, is like saying a person who has a house with a mortgage has no assets. And therefore is completely bonkers!!!

All that matters is that the debt interest payments can be relatively easily covered and that the assets are worth acquiring for the price paid if debt is used to fund them.

Jebenn1, not sure the point you make regarding the downturn - for example a bamboo coffin will almost always be significantly more expensive than a traditional coffin.

As for the economic situation, death is probably the most resilient to any economic downturn and highly unlikely to be affected by anywhere near as much as other industries.

Happy to discuss.

Regs

StNick

[jebenn1] 25/3/2009 12:17

Thanks for the info Serratia and Eburne.
Maybe I am being a bit hasty. Will continue to watch and learn.

[eburne1960] 25/3/2009 11:55

jebenn, I believe the debt is payable in instalments up to 2023 and 2030.

[serratia] 25/3/2009 11:11

Profit before finance costs was £52.1m,finance costs were £17.8m giving a PBT of £34.3m.Operating profit was 3* finance costs so it doesn't look too much of a problem.

[jebenn1] 25/3/2009 10:09

Hyper Al, I have this on my watch list and I entirely agree. Everything else is fine but the debt makes this risky and is stopping me even at these levels.

If some of that comes up for renewal in the current climate they are almost certainly going to end up paying significantly more than they are now.
Similarly any downturn (for instance due to people copying Wendy Richards and having a coffin made of bamboo) and they may find the debt sevicing becomes difficult.

Am happy to be corrected by any holders with a better understanding of the business model.

Good lukc to all.
Jebenn

[hyper al] 24/3/2009 23:22

The only reason I don't touch this company is the debt. I do not like the business model that requires debt.

The company is growing quicker than it needs, rather than consolidating its position. As far as I can see , it's the suppliers of the debt that are gaining at the expense of the shareholder. We get an 11p dividend, but what is that compared with the 5% or so that we are paying for debt finance?

In my mind a company is not in profit if it has ANY debt, debt is a burden that can take control of a company and remove control from the shareholder.

[glennborthwick] 24/3/2009 22:18

so thats 300 000 shares roughly , at a discount of 550pish=£1.75million