Dignity Share Discussion Threads

[mr5k] 17/3/2021 09:51

Great cash performance and it seems a much needed cultural change is underway. Looks like a good decision to stop an expensive transformation project (£50m!!). Also the amount of money spent doubling the branch network (via acquiring other independents) to maintain market share at 11-12% is an indictment of the previous management but not surprising. All the major execs were accountants who were simply playing the p/e acquisition game - namely buying earnings on a 5 times multiple but being rewarded 20 by the market.

Disappointed that they've not found a CEO and not comfortable with Whiley maintaining two highly paid Executive Chairmen roles in companies that are turnarounds. These situations require laser focus. I'd be voting with Phoenix for the removal of Whiley. Let's face it the share price started the rally when the requisition notice was announced.

I think earnings should rebound next year as the mix improves and we start to see the benefit of the efficiencies. Over time the shares should get back to the original levels as DTY's scale will enable it to dominate digital advertising and the funeral planning. COOP will also do well. I'm thinking that the independents may struggle unless they can offer much better service but this will also be a focus for DTY through improved training and recruitment.

DTY vertical integration with its branches, dominant position in cremation (76% of funerals are cremations in the UK) and pre paid funerals means it (and COOP) will dominate the market, making it harder for the independents. If you then add scale and access to capital (expertise to build crematoria) to the equation, the outlook for DTY is very good.

It could be argued that the branches will eventually become an expensive overhead but death and mourning are traumatic and having someone to speak to will be important. It's critical that staff are well trained and not incentivised by profits and lead customers to making the right decisions for them.

Anyways, I'm a happy long term holder and glad I bought last year.

[the grumpy old men] 17/3/2021 09:30

Dividend Policy

The Company has not paid a dividend since June 2019 and the Directors do not expect to pay dividends until the business has returned to a sustainable and stable financial footing, notwithstanding the fact that the Group retains significant cash resources and remains cash generative. The Directors understand the importance of optimising total shareholder return, as well as the need to maintain a balance between different groups of stakeholders, and it is the Directors' intention to return to paying a dividend as soon as they believe it is financially prudent for the Group to do so.

Summary outlook

Unfortunately, notwithstanding the significant progress the business has made since my appointment, our largest shareholder Phoenix Asset Management Partners, with whom we believed we were having a constructive dialogue in relation to the future strategy of the business, has chosen this moment to seek to assert what would, in effect, be executive control at Board level.

Whilst, in my view, the Group is now sufficiently robust to sustain this wholly avoidable and unnecessary challenge, it is nonetheless an unwelcome distraction as we remain dedicated to dealing with the ongoing fallout from the pandemic. To minimise disruption, the independent directors have been charged with taking the necessary steps to convene the required general meeting of shareholders and they will share their views on the resolutions to be considered at that time. It will then be for shareholders to decide on the merits of the Phoenix proposal.

[the grumpy old men] 17/3/2021 09:28

Funeral provider Dignity swings to loss despite 14% rise in UK deaths

Wed, 17th Mar 2021 09:07
Alliance News

(Alliance News) - Funeral services provider Dignity PLC on Wednesday reported a fall to loss in 2020, despite a 14% increase in deaths in the UK due to Covid-19.

The Sutton Coldfield, West Midlands-based company swung to a GBP19.6 million loss in the financial year that ended December 25 from a GBP44.1 million profit in the financial year that ended December 27, 2019. Dignity said underlying pretax profit declined by 19% to GBP30.7 million in 2020 from GBP37.7 million.

There was a 14% increase in deaths in the UK last year to 663,000 from 584,000 in 2019, according to Dignity, due to the virus pandemic. But revenue rose by just 5% to GBP357.5 million from GBP338.9 million.

The heavier UK death toll was related to Covid-19, but at the same time the restrictions put in place by the government to combat the pandemic held back revenue growth, Dignity said.

"Whilst Covid-19 featured heavily in our day-to-day activities into the first quarter of 2021, we did not lose sight of the numerous project work-streams initiated in the last year, aimed at affording the board the time and collateral necessary to allow the business to self-heal, without recourse to dilutive funding initiatives," said Chair Clive Whiley.

The chair noted that Dignity's "transformation plan" was paused indefinitely last April at the onset of the pandemic in the UK in order to save money. It had been expected to cost GBP50 million over three years to achieve an annual benefit to earnings of GBP10 million. Instead, Dignity now is conducting what it calls a "root and branch review" of the business, expected to be completed in the second quarter of this year.

Dignity is without a permanent chief executive or chief financial officer after the recent departures of Mike McCollum and Steve Whittern. "We are currently engaged in seeking a new chief financial officer," Whiley said on Wednesday, "and we will continue our search for an appropriate candidate for the role of chief executive officer, coterminous with the outcome of the root and branch review."

Whiley himself is under pressure from Dignity's largest shareholder, Phoenix UK Fund, which has a 29.9% stake. Earlier this month, Phoenix requisitioned a general meeting to oust Whiley and replace him with Gary Channon, the founder of Phoenix Asset Management Partners, which manages Phoenix UK Fund.

"Unfortunately, notwithstanding the significant progress the business has made since my appointment, our largest shareholder Phoenix Asset Management Partners, with whom we believed we were having a constructive dialogue in relation to the future strategy of the business, has chosen this moment to seek to assert what would, in effect, be executive control at board level," Whiley said Wednesday.

The company hasn't paid a dividend since June 2019. Whiley said the board doesn't expect to pay dividends "until the business has returned to a sustainable and stable financial footing".

Dignity shares were up 4.6% at 635.00 pence in London early Wednesday.

By Tom Waite; [e-mail]

[hatfullofsky] 17/3/2021 09:15

An the property re-valuation from Q3 is not included in the accounts

Property, plant and equipment 240.9 v 251.3

The independent valuation was commissioned specifically to assist with the CMA's market investigation informed by this approach applied in previous market investigations. As such it is subject to certain limitations and based on a number of conservative assumptions (which are detailed as an appendix to this announcement). Strictly subject to the foregoing, Cushman & Wakefield have estimated that the replacement costs for the land and buildings at these 41 crematoria to be in the region of £461 million. The report also estimates that the alternative use land valuation at these 41 sites is approximately £374 million. This compares to a net book value of approximately £44 million at the time of the report in September 2019.

[hatfullofsky] 17/3/2021 08:55

Cash generated from operations £62.7m
Underlying cash generated from operations £76.4m
Cash balances of the Trading Group at the end of the period were £73.6 million (2019: £57.9 million).

The Trading Group has underlying net debt of £480.6 million (2019: £506.2 million)

[imastu pidgitaswell] 15/3/2021 15:41

Aaargh, should have gone for it - 520 to 600 in a few days, pretty good going. No spare funds at the moment.

[mr5k] 12/3/2021 16:47

I'd thought that Whiley was Phoenix's man. So, I wonder what happened - maybe Whiley forgot who the company belongs to. Whatever, the market seems to be taking the news well. We're up 10%+ since the requisition notice was announced.

[hatfullofsky] 12/3/2021 15:52

That was old news by the way 2018

[hatfullofsky] 12/3/2021 15:44

Wasn't Stanley Gibbons sold eventually ?

[imastu pidgitaswell] 11/3/2021 16:40

Entertaining stuff from the sidelines.

Tempted to get back in, but will see what happens first.

I am mildly amused by 'The Board' considering their position before they respond. And advising other owners not to do anything until 'The Board' have given them advice. The attitude of 'who do these bloody owners think they are, we're The Board...'

I know not all shareholders would agree with Pheonix, but it's the attitude that amuses.

[hatfullofsky] 11/3/2021 16:34

Market seems pleased

[mr5k] 11/3/2021 16:14

Market seems unfussed by the requisition.

[hatfullofsky] 11/3/2021 09:42

Great info Molrey

[molrey] 11/3/2021 09:31

Phoenix give a bit more guidance on their plans for Dignity via the Aurora Investment Trust (that they manage) December Report

[mr5k] 11/3/2021 09:06

Phoenix have been invested for some years and at higher levels. I'd assumed that Wiley and Phoenix were on the same page (see an excerpt from a statement on 14th Dec 2020) and that he'd cleared out the c suite.

"Accordingly, given that our over-arching desire to grow sustainable long-term market share could have ramifications for short-term performance, we are working closely with our largest shareholder in order to endorse the combination of compelling propositions and price points to best leverage the strengths of our existing resources."

I found this statement encouraging as a long term investor and that management and Phoenix appeared aligned.

So some surprise then that Phoenix now want Wiley out.

It would be helpful if Phoenix issued a statement explaining the reasoning for wanting Wiley out and why Gary Channon could do a better job.

[hatfullofsky] 11/3/2021 08:53

5yrs 2500
3yrs 1000
2yrs 700
Today 500

Tell me one investment company that would be happy with that performance. They're looking for a return hence the move to remove the executive chair.

[hatfullofsky] 11/3/2021 08:43

VT - Do you know how long have Phoenix been invested ?

[velocytongo] 11/3/2021 08:09

There will be no more split or sale. This must be about the strategic direction of the business. Phoenix are not quick buck merchants and they have a website if you want to find out more about them.

[velocytongo] 11/3/2021 08:09

There will be no more split or sale. This must be about the strategic direction of the business. Phoenix are not quick buck merchants and they have a website if you want to find out more about them.

[velocytongo] 11/3/2021 08:02

Phoenix must be fed up with the length of time it’s taking to find a CEO.

[hatfullofsky] 11/3/2021 07:24

About blooming time, Phoenix want a return not value destruction. Split or sale even more likely now. I'm in full support

[mr5k] 10/3/2021 13:26

I don't believe in TA but, if I did, it's not a nice trend line. Then again, I'm looking 5 years out. What I can tell you is that there's lots of Simplicity (DTY low cost crem option) radio advertising here in London and that Simplicity is the lowest all in cost (inc Dr's fees). They intend to be the disruptor and the lowest cost provider. Previous management were pursuing the a gauge strategy in the belief that the market would not respond to lower pricing. My gut feel is that the pandemic may have accelerated the digitisation of the business and that this makes sense if the industry want to keep the CMA of their backs.