Dignity Share Discussion Threads

[velocytongo] 29/3/2022 12:45

week 18 Mar 2022
Deaths act 10,927 vs 5 yr av 11,077

Another week at near the 5 yr av. That's a 3-week run.

VTongo

[velocytongo] 26/3/2022 13:38

m_kerr, your’s is the rear view mirror. i’d read the recent statement which is about the future.

[m_kerr] 25/3/2022 21:45

i think the rot has set in now, they've manoeuvred themselves into a position where they're going to have to compete more on price, and will lose a lot of margin through the cheaper options.

everything about this company screams complacency, incompetence, short termism and cutting corners wherever possible.

have you read the famous short report from a few years back? it's pretty devastating stuff. IMV this is a textbook example of overcharging and then haemorrhaging market share.

[velocytongo] 24/3/2022 21:17

m_kerr, the whole industry has been at it for years. the idea that independents were any more ethical than dty and coop is nonsense. today, if you look in the windows of independents, you'll see that their prices for the lowest cost option is 30-40% higher. what dty are doing with pricing now is set to put the screws on the independent that have enjoyed bloated profits for years. i agree with your comments re past behaviour and the flawed business model, but phoenix wants to and is changing. the rest of the industry will have to follow suit or fold.

[velocytongo] 24/3/2022 13:42

I listened to that Moneybox program a few weeks and it was claimed that DTY would step up to take over providers that could not/were not able to be regulated. I'd be suspicious about the cos can't/don't want to be regulated. I think some of them may be exposed as Ponzi schemes/ badly run.

[grupo guitarlumber] 24/3/2022 12:39

Funeral firm collapses leaving fears over payments

By Kevin Peachey
Personal finance correspondent, BBC News

Published

15 minutes ago


A funeral plan provider with 45,000 customers in the UK has collapsed, throwing contracts into doubt and raising concern over refunds.

Safe Hands had already signalled its intention to stop operating, but its collapse means pre-bought funerals may not be honoured.

Administrators said the company could not provide immediate refunds, leaving many worried their money will be lost.

The sector is facing an imminent overhaul, leaving other plans in doubt.

From 29 July, any provider must be authorised and regulated by the Financial Conduct Authority (FCA) which, from that point onwards, will give consumers far greater protection than they have at the moment.


'What are we going to do?'

Safe Hands was one of dozens of companies operating in the currently unregulated pre-paid funeral sector.

Customers such as Lyn Burrow, 72, and her husband Fred, 80, signed up to contracts that saved their family the expense and emotional cost of organising their funerals when they die.

The couple spent a total of £6,310 on their plan, which she said had given them "peace of mind".

She spoke to BBC Radio 4's Money Box programme about her concerns when it emerged that Safe Hands had decided to stop operating when new regulations begin.

Now, following news that the company is in administration, those fears have heightened.

She said: "My family was supposed not to have to worry, but what are we going to do now?"

"If we could at least recover some of the money, we could make up the difference with a reputable company. But £6,000 is a lot of money. It would have to come from our savings."



Joint administrator Nedim Ailyan, partner at FRP, said they would carry out a detailed investigation to discover what could be returned to creditors, including policyholders - whose funds are in a trust fund, which itself has a shortfall compared to what is required for full refunds.

"Regrettably, the administration means the company is not in a position to issue refunds at this time. We appreciate how upsetting this period of uncertainty will be for Safe Hands Plans' customers and their families," he said.

"Unfortunately, there is a shortfall between the level of plan holder investments and the forecast level of funeral plan costs to be paid. Essentially, the value of the investments is not enough to meet the funeral plan obligations of the company."

Any funeral plans activated in the next two weeks, because the policyholder has died, will be covered by another provider - Dignity. Mr Ailyan said a "longer-term solution" was being sought beyond that deadline, and customers - or their loved ones - would be contacted. A helpline has been set up on 0800 640 9928.


The FCA said it was reforming the sector because elderly, and very often vulnerable, customers have been subjected to unfair practices such as high pressure sales tactics and cold calls. It wants to raise standards by regulating what companies can and cannot do.

However, a FCA spokeswoman said that, in the case of Safe Hands, its powers were limited because it had yet to come under the regulator's jurisdiction.

"People who bought a pre-paid funeral plan with Safe Hands will be understandably concerned, which is why we welcome Dignity stepping in to provide funerals for the next two weeks," she said.

"We will continue to support the administrators and industry to see whether there is a longer-term solution for Safe Hands' customers."

UK funeral plan sector

1.6 million customers

200,000 funeral plans taken out every year

Approximately 65 companies

Average plan costs £4,000

Average plan lasts for 8 years

Source: FCA/Fairer Finance



As the funeral plan market is being reformed, industry insiders are worried that this could mean more of the 65 providers will go out of business, leaving tens of thousands of customers out of pocket.

Whilst many of the larger, more reputable firms are expected to be granted authorisation by the FCA, others are unlikely to even apply for authorisation or will be turned down. If that happens they will be unable or not allowed to operate beyond 29 July.

While customers who have signed up to plans very recently can cancel during a cooling-off period, others will have to wait to see what happens to their provider and their plan.

[velocytongo] 23/3/2022 20:44

did you not see my post re the slashing of prices !

[m_kerr] 23/3/2022 16:57

the issue i'd have with dignity, the extremely high prices they charge have been shown to be unsustainable, as a huge gap now exists between what they and their competition charge.

[mr5k] 23/3/2022 14:59

After more reading, here are some standouts. DTY has slashed the cost of their funerals.

Income from attended went from £3,284 in Q3 to £2,462 in Q4
Income from unattended from £1,876 in Q3 to £1,081 in Q4.

If this works, this should upend the whole industry.

[mr5k] 23/3/2022 09:23

And BTW that surplus in the Trust is worth 60% of the value of the current market cap. I know it may be just transitory but that belongs to the company.

[mr5k] 23/3/2022 09:17

Interesting reaction to the results, which may be because they did not include adj eps in the headline, which is 42p and roughly the same as last year (an amateur error!).

Clearly, it's early days but two things caught my eye. The Trust now has a surplus of £147m, having changed the asset mix and stopped writing unprofitable biz. Last year the surplus was low single digits

And "It is still our intention to address the capital structure most likely by use of the crematoria portfolio but to do it in a way that does not change the integrated nature of the Group."

Channon has substantially de-risked the business thru addressing the prepaid, which was an accident waiting to happen, and that could have sunk the whole business. As it is, there is an additional £147m of value for shareholders that was not there before. He should be applauded for this and prepaid has the potential to become an engine of growth and not a piggy bank for the previous management to raid when they needed extra to make up the numbers.

The next issue will be some form of transaction to release value from the crematoria to reduce/eliminate the debt.

Management is also clearly concerned about the death rate falling and mentions this issue more than twice in the statement.

As ever, DYOR.
Mr5k

[tombomb] 17/3/2022 18:56

Yeah right - the death rate was just an excuse to have the covenant conversation - it's not the reason. The market share growth they want to achieve to win - depends on winning significantly higher volume from competitors - not relying on the death rate, which will have some, but limited impact on overall volumes - compared to winning more business.......which they seem to be struggling to do.

[mr5k] 17/3/2022 14:26

It does hinge on the death rate staying at the 5 yr av. Did you not see they asked for a covenant waiver?

[the real stan] 17/3/2022 13:00

Well if Dignity's future all hinges on a few hundred deaths things are worse than I thought!

[mr5k] 17/3/2022 09:27

Without a death rate at the 5 yr av, DTY can not resolve the debt and reinvest in the business. As for pricing, that's already been addressed via the no frills option.

[the real stan] 16/3/2022 17:49

Why do people keep going on about the death rate? Dignity's future is more dependent upon resolution of the debt issue, reinvestment in the estate, cash flow and what happens to pricing.

[mr5k] 15/3/2022 14:27

4 Mar 2022
Death in England and Wales 11,225
Five year av. 11,206

The death rate is back at the five year av. Interesting to see if this is a change or a one off. It's been below the 5 yr av for the last two months.

mr5k

[mr5k] 14/3/2022 17:45

You are out of your mind, ChannonOut. Whiley was busily writing lots of unprofitable funeral plans and not addressing any of the core issues and was barely present and cliping a v tidy coupon for doing further damage. This has been stopped.

There is nothing that the co can do about the decline in the death rate in Jan and Feb but which is now picking up again. DTY offers the cheapest low-cost option, which is going to hurt the independents, whose low-cost options tend to be between £3-500 more expensive. And by the way, turn arounds always take a lot longer. Believe me, Whiley was taking this business down the sh1tter!

[channonout] 09/3/2022 12:08

Fully supported the boardroom takeover, but nothing but decline since. CHANNON OUT!

[mr5k] 24/2/2022 08:45

The current death rate is below the 5 year av, which has been spiked by the pandemic. The rate has reverted to the rate in 2019.

[mr5k] 23/2/2022 16:03

That covenant issue was always going to spook the market. The challenge here is that the death rate has been about 10% below the 5 yr average, depressing revenues (unless they start taking market share which to date has not been the case) and the cost base will rise to fund the transformation of the business. Turn arounds always take much longer than people realise and DTY will be no exception.

[bookbroker] 23/2/2022 08:11

What happens when the company has a severe imbalance in debt to equity, looks at the assets in relation to debt, looks pretty awful.

[hatfullofsky] 22/2/2022 22:21

What the hell is going on here, covenants should not be an issue.

[lochgarman] 17/2/2022 22:46

mr5k....cheers for the updates