Dignity Share Discussion Threads

[hussyo] 09/6/2018 08:32

It was unrealistic for the company to once more raise guidance on Thursday, though it was good to hear that performance in Q2 continues to be 'strong'. With the investigations likely to dim in the coming weeks and months, the stock ought to go back on its upward trajectory between now and until 01/08. I topped up in the past week, bringing total holding to 2777, at an average of 10.06.

[hatfullofsky] 08/6/2018 16:11

Keeps knocking on 1100, once popped we could rise quickly back to 1200. Trading opportunity

[jacks13] 05/6/2018 09:37

That's a good question. But you could ask the same about any company. Are you saying that Dignity presents a particular mystery on that score?

The problem with focusing all your attention on the income statement (eps and the like) is that it includes accruals, estimates and other adjustments which obscure the picture. Reported earnings are not cash earnings, in other words.

The cash flow statement shows instead where the cash is coming from and where it is going to. If you look there you will see what cash has come from operations, what has been spent on capex and acquisitions and what has been spent on debt servicing and dividends. That for me paints a more useful picture of how a company is performing.

Capex and acquisitions spending have featured strongly over the years and it is those items that have consumed most of the cash generated. Having now built a large fixed asset base on which to generate future cash flows they can, if needs be, cut back on such spending if revenue were to decline.

[michaeljames1] 04/6/2018 18:16

If EPS is in the region of 100p though, depending on which one you choose, and the dividend is sub 25p then where is the rest of it?

[jacks13] 04/6/2018 11:18

Their business model is to use borrowed cash to build assets to provide cash to pay the debt and pay a dividend. Retained earnings don't feature in the plan. That's it in a nutshell.

Their assets are almost entirely long term, their liabilities are also almost entirely long term. Debt is structured as a mortgage with ebitda based covenants.

The model does depend on strong cash flows and that is why the market is spooked at the prospect of a price war/competition in the market. Cost of debt servicing is around £33M a year and cash from operations is historically well in excess of this. There is uncertainty around how the funerals market will evolve and the influences that the regulators/enquiries bring to the mix.

For what it's worth I think the correction is well overdone and last week's developments will likely be to Dignity's benefit in the long run. I see that the IC is saying that they "...don't feel any near-term motivation to buy in at 1,045p", which is fine. Maybe they'll be giving buy advice when the share price is 1,200p.

[kramch] 04/6/2018 10:17

Did a bit of digging here after the share price fall, high debt which doesn't seem to go down despite headline profits, NAV doesn't go up despite pitiful dividend, where are the profits going? Now enquiry into RIP-off funeral plans.
K.

[hussyo] 04/6/2018 08:17

I had a very quick glance at the order book and although volume is thin the Bid side is quite aggressive.

[hussyo] 03/6/2018 20:39

Despite the January warning and now the review, the two brokers who previously had a Hold rating on the stock have come out and reiterated Hold. It's going to be a volatile week coming up.

[saltaire111] 01/6/2018 18:12

That was some massive overreaction today.

Salty

[hussyo] 01/6/2018 14:57

It's taken the opening of the New York session for sanity to have returned.

[retsius] 01/6/2018 14:17

Seems to be a positive spin from the Management Statement,on the investigations.

Unfortunately the market for one reason or another seems very negative about it and the result today is an absolute shambles for the PI. To get your money out you now will have to take a loss or decide to hold for the longer term.

I feel very lucky selling a small holding a month ago at £12:50.
Commiserations to holders.
R.

[seball] 01/6/2018 10:42

Chief executive Mike McCollum said: "While the first quarter produced a much stronger result than we had anticipated when implementing the price changes in January, the current year is all about completing our review of our funeral business and ensuring we provide the excellent service our clients expect from us. We will also continue to demonstrate industry leadership by calling for stronger regulation in the funeral plan sector to protect customers."

Above is from last results. Dignity have been asking for this to be looked into. Buying opportunity has presented itself.

Strong Buy

[hatfullofsky] 01/6/2018 09:58

Statement out : As one of the UK's largest providers of funeral and crematoria services, Dignity has led calls for greater regulation of both at need and pre-paid funeral sectors while continuing to set the standard for what constitutes best practice in the industry. We look forward to working with the Treasury and the CMA in the months ahead to bring greater regulation and transparency to the funeral sector, whilst ensuring that customers get the best service and choice of pricing.

[jacks13] 01/6/2018 09:31

They don't need to issue a statement, hussyo. They've already said what they need to.

13 November 2017
“Alongside the work being undertaken on the Group's digital strategy and our continued call for regulation of our markets, we are assessing other initiatives to help the Group build on its strong market position."


19 January 2018
“Dignity will also continue to lead calls for greater regulation of the funeral sector while continuing to set the standard for what constitutes best practice in the industry.
As a leader within its industry the Group has continued to call for regulation. To this end in 2017 independent consumer group Fairer Finance, in partnership with the Group, published a report looking at whether the funeral planning market works well for the consumer. Dignity also firmly believes that the funeral industry will benefit from proper regulation to ensure that customers are not misled into accepting below-par service and standards. The Group continues to engage Government and other stakeholders in calling for higher standards.”


14 March 2018
“We have continued to call for regulation in the industry, commissioning and launching a ground-breaking report into the pre-paid market. We have further industry-leading initiatives in the pipeline.
We believe the funeral industry will benefit significantly from proper regulation to ensure that clients are not misled into accepting below-par service and standards. We pride ourselves in providing industry-leading standards. It is a thread which has run through our business from the beginning and we are determined to maintain this focus while augmenting our products and improving our channels to market. Reaching our desired goals, operational and financial, will require our staying focused on excellent service and we are committed to ensuring that this is the case.”
14 May 2018
“In April 2018, the Group also published a White Paper calling for stronger regulation of the funeral plan sector to protect customers. The paper proposes the Funeral Planning Authority being given a statutory footing and the requirement for all funeral plan providers to participate. The Group is participating in and co-funding the development of a further piece of research conducted by Fairer Finance looking at how stronger regulation can be delivered in practice. Further details including a copy of the White Paper are available on the Group's investor website.”

White Paper:

[hussyo] 01/6/2018 08:51

I saw a 10k and then a 20k buy go through, at 10.43 and 10.39 respectively... I'd suggest those traders will be well in the money by end of play today.

[hussyo] 01/6/2018 08:25

The markets have a habit of over-reacting to news. The company will have to issue a statement sharpish.

[mshafiq] 01/6/2018 08:18

Nearly 15% down today. Might be a good time to add more and then once this news blows over then share price can rise. Or could just get out now. Decisions.

[staverly] 01/6/2018 08:10

Well found. It's a disgrace that Google and FT appear asleep at the wheel.

[hatfullofsky] 01/6/2018 07:44

DTY canvased for more regulation in the market but instead they get a price investigation. Reputable businesses should be OK and with the current review underway, I think this is a positive but will hit the SP



The high cost of funerals is to come under scrutiny, with two separate investigations being signalled.
The Competition and Markets Authority says "emotionally vulnerable people" are not being given clear information about prices and services.
Meanwhile, the Treasury is focusing on "rip-off" pre-paid funeral plans.
Consumer groups have complained that people who pay for their funerals in advance could find their relatives face extra costs after they die.

[hydrus] 01/6/2018 07:42

Investigation into funeral prices and pre payment plans:http://www.bbc.co.uk/news/business-44327899

[hussyo] 25/5/2018 12:33

Well that was pretty obvious.. market was manipulated down, squeezing out panicked longs, before 210k in buys comes through with zero slippage.