Dignity Share Discussion Threads

[bookbroker] 11/3/2020 10:24

That has been evident for some time, and it does not apply just to this company. I have always endeavoured to invest in companies with a cash buffer, even that comes with risks as a result of the ineptitude of the company directors these days. Most seem to believe in their own sense of self-entitlement, and security of position, they have a shocking ability to squander advantage, so investing is being tempered by bandits in the boardroom. Back to Dignity, they need to prop up the balance sheet badly, a rights issue is the only option, but with the sword of Damocles hanging over them with this ongoing enquiry it is very difficult to see that happening in a hurry. Cash is king in this day, but this company has some wealthy shareholders.

[the real stan] 11/3/2020 10:12

Debt 13x operating profit is unsustainable. Interest under 2x cover. This is addition to the £1.3bn contract liabilities. FCA will have something to say about that....

[florenceorbis] 11/3/2020 09:58

Dignity Operations Solid But Warns On Impact Of UK Watchdog's Probe

Wed, 11th Mar 2020 09:08
Alliance News

(Alliance News) - Funeral services provider Dignity PLC warned on Wednesday a regulatory investigation could "materially" impact both its industry and the company itself.

Shares were down 19% in early trade on Wednesday in London at 403.40 pence each. They have lost 45% in the past 12 months, and in late 2016 were not far off 3,000p.

A year ago, the UK Competition & Markets Authority announced an in-depth probe into the funerals sector amid concerns over competition. Other concerns included the rising cost of funerals, which rose on average 6% a year in the 15 years prior to 2019.

Sutton Coldfield-based Dignity itself has been undergoing a transformation plan since 2018. In July last year it temporarily removed its dividend amid falling profit and revenue.

"We have a strong business that is ready and willing to adapt to the challenges ahead. However, the challenges are significant," said Non-Executive Chair Clive Whiley.

"Average income per funeral and cremation are likely to reduce further; the CMA investigation could materially impact our plans; our transformation plan is strong however timing needs to be amended pending the outcome of the CMA investigation, thereby delaying anticipated savings."

"The impact of these challenges is currently unclear. For example, the draft report from the CMA is not anticipated until April or May 2020, with their final report currently due by the end of September 2020. The board anticipates making further comment on the Group's outlook following the release of the provisional decision report," Whiley continued.

Turning to results for the 52 weeks to December 27, Dignity's average income per funeral fell 1.4% to GBP2,930, with the reduction expected. Revenue fell 4% to GBP338.9 million, and the number of deaths during the period dipped 3% to 584,000.

Dignity swung to a pretax profit of GBP44.1 million, after a GBP18.0 million loss the year before. The 2018 figure was restated from a GBP40.5 million pretax profit, due to accounting changes.

Dignity said the operating performance was in line with market expectations. The Crematoria and Pre-Need divisions did well, it added.

Whiley added: "Whilst we were pleased with the progress we made and the financial performance we delivered in light of the competitive environment, we need to be cautious in the coming months until the CMA's conclusions are finalised."

In a separate announcement Wednesday, Dignity said Dean Moore has been appointed as a non-executive director with immediate effect. He is a former chief financial officer of Cineworld Group PLC and retailer N Brown PLC.

"I am delighted that Dean has joined the board of Dignity. His significant financial, commercial and board experience will be invaluable, and I very much look forward to working with him on the transformation strategy and the future success of the business," said Whiley.

By George Collard; [e-mail]

[the real stan] 11/3/2020 09:52

Didn't age well..... Are they invested still?

[saltaire111] 11/3/2020 07:50

Oh dear indeed. £4?

Salty

[roddyb] 03/3/2020 10:43

Whilst limits on pricing is perceived as being terrible news, in the long run, DGN will be able to use it's buying power to squeeze costs more than any other service provider (just a perk of being the big one in the market).

The cremation fees mean nothing in terms of competition because DGN has the crematories and the other competitors have to use them which in turn means we can grant discounts to ourselves and make the competition pay the full regulated price.

No-one likes feeling that this market takes advantage of people but for every action the Government take in regulation, there is an unavoidable equal and opposite reaction in the marketplace.

The share price has already factored all the bad news in compared to where we were 2 years ago, it is now just a matter of letting it play out with solid growth from a lower base. Not exciting but in this market it is probably as good as it gets.

[lastoneout] 01/3/2020 23:47

If it takes hold (and it looks like it's about to) then the elderly won't be so much shuffling off this mortal coil but rather being carried off on a conveyor belt. Stay in doors is my moto for today!

[stampylong trader] 01/3/2020 03:35

One of the very few stocks that did not crash last week.

[saltaire111] 27/2/2020 13:16

Looks like the Coronavirus is going to give a boost to the funeral trade!

Salty

[jamie48] 20/2/2020 14:42

Hi Dunny, Dignity will have to lower their prices significantly as they charge currently over £1,000 more per funeral than most others. Coupled with the proposed ceiling for crematorium fees, their profits will be hit big time, as their crematorium fees are the highest nationwide.

[dunny85] 14/1/2020 19:03

Hi Sophia, they are all under the CMA link -

Sorry I don't look here much!

[sophia1982] 09/12/2019 10:05

Many thanks, Dunny. That is helpful information.
If you have time, can you send link of the COOP hearing too?

[dunny85] 29/11/2019 17:31

Worth a read

More CMA stuff just been updated here -

Interesting that Dignity say this:
"The CMA asked what projections Dignity had made about the impact of lowerprice funeral products on its bottom line. Dignity said it had not done detailed
projections about the impact on its own business. However, Dignity did
choose to be a part of the market and was investing in marketing its Simplicity
product line."

Good to see they didn't feel the need to do some modelling :D

[jamie48] 13/11/2019 09:23

Dignity, the price gougers, have had their day and the only winners are the board of directors who sold before the share price went through the floor. The CMA will insist on them becoming more ethical and transparent, it's long overdue.

[taylor6288] 12/11/2019 21:48

Dignity has most likely made £100m in the trust funds this year - yoy numbers have bottomed. It's not all bad. In fact shorts have been covering

[peanut100] 12/11/2019 21:29

Only way this is going up is any shorts covering but not required yet as will gradually go back down again with or without new shorts.

[primarch1] 11/11/2019 11:27

This may have value again at some point but until the cma investigation is over it's hard to see we're the value is.falling profits increased costs while it restructures and the debt covenants margins getting ever closer I'm out for now take my medicine gl all

[lefrene] 11/11/2019 11:25

misca2, Thank you. Strange how perceptions of value change when a company is on the growth path, and then goes ex-growth. Those debts are not yet shrinking, although the business seems steady.

[misca2] 11/11/2019 10:52

Summary

The company has solid fundamentals for a short-term investment strategy.

Strengths

Graphically speaking, the timing seems perfect for purchasing the stock close to the GBp 469.2 support.
Predictions on business development from analysts polled by Standard & Poor's are tight. This results from either a good visibility into core activities or accurate earnings releases.
Its low valuation, with P/E ratio at 8.55 and 7.8 for the ongoing fiscal year and 2020 respectively, makes the stock pretty attractive with regard to earnings multiples.
The average target price set by analysts covering the stock is above current prices and offers a tremendous appreciation potential.

Weaknesses

According to Standard & Poor's' forecast, revenue growth prospects are expected to be very low for the next fiscal years.
The company is in a hindered financial situation with significant debt and rather low EBITDA levels.
For the last 12 months, analysts have been regularly downgrading their EPS expectations. Analysts predict worse results for the company against their predictions a year ago.
The technical configuration over the long term remains negative on the weekly chart below the resistance level at 603.5 GBp

[misca2] 11/11/2019 10:51

ONE PRESUMES THEY TOOK ON DEBT TO FINANCE AQUISITIONS WHICH MIGHT HAVE BEEN OVERLY EXPENSIVE

SURPRISED THAT INTANGIBLES NOR DEBT HAVE SUBSTANTIALLY REDUCES OVER THE LAST 5YEARS OR SO