23/06/2021
AGM Trading Update & New Strategy
Dignity plc, the UK's only listed provider of funeral related services, will hold its Annual General Meeting ('AGM') at 11.00am today at which Gary Channon, the Group’s Executive Chairman, will give an update on trading and also present Dignity’s new strategy. Details of how to join the live video webcast are provided below.
Trading Update
The number of deaths in the first quarter increased by 27 per cent to 204,000. Since the quarter, the UK has witnessed deaths falling below the five-year average (2015-2019) for April and May 2021 resulting in deaths now being 7 per cent lower.
Funeral market share in Q1 2021 was 11.5 per cent which was lower than expected due to the delay in the date of the death being registered and the funeral being performed. As expected, this has started to normalise and May 2021 year to date funeral market share is 12.0 per cent.
Average revenue per funeral in April and May 2021 has improved from the first quarter with the Full Service volume as a percentage of Full and Simple increasing by 2 per cent to 68 per cent. Q1 crematoria market share was 11.1 per cent which was also lower than expected for the reasons above, although this has also started to normalise and May 2021 year to date crematoria market share is 11.5 per cent.
Underlying operating profit for the 21-week period ended 21 May 2021 is £30.7 million which is slightly behind the prior year. This is due to deaths being lower, partially offset by higher average revenues, both being impacted by year on year timing differences from COVID-19.
New Strategy
Gary Channon, the Group’s Executive Chairman, will today give a presentation outlining Dignity’s new strategy which will enable the Group to realize its significant unlocked value for the benefit of clients, employees, shareholders and wider stakeholders. Key points of the new strategy include:
Funerals
- A focus on prioritising the sale of funeral plans through branches rather than telephony partners. Contracts have already been cancelled with five telephony partners that have been assessed by Dignity as both uneconomical but also not representative of the high standards we would expect. This will lead to a loss of c.35% of 2021 budgeted funeral plan division revenue. This is largely mitigated through £12m in savings from 2021 budgeted telephony commission costs
- We will focus on growing the addressable market for funeral plans, growing percentage share of funeral plans sold and lowering the cost of acquisition
- We will seek to generate a surplus of at least 3% per annum on its trust assets of c.£1bn.
- We will prioritise investment into standards of care, facilities and our estate, alongside a combination of a competitive pricing and product mix, cultural change and stronger branding, to grow local market share.
- Dignity is aspiring to achieve 20% funerals market share in 10 years time (including both pre and at-need funerals).
Crematoria
- A focus on increasing both volume and yield per crematoria by increasing throughput and growing ancillary sales
- Continuing to build out the pipeline of crematoria and build additional capacity into existing facilities
- Embracing direct cremation and become price leaders for the location agnostic value segment of the market
Additional points:
- A new organisational structure to be more open and dynamic
- Cultural focus to empower our colleagues and provide more opportunities for training and development
- Further value creation through the establishment of two new profit centres comprising Dignity Property and Dignity Manufacturing
- Sustainability: a vision to achieve negative carbon impact
- A reduction in the share of revenue that goes on central costs
Gary Channon, Executive Chairman of Dignity plc, commented:
"I have long recognised and believed in the vital role that Dignity plays in society and within the wider funeral sector itself – this has been particularly evident over the past 18 months in response to the challenges of the pandemic. I am pleased to be presenting today our vision for Dignity’s future, and to unveil our strategic framework that is focused on building long term value and delivering an outstanding service to clients.
“Our vision is for Dignity to be the UK's leading end of life business, renowned for its excellence and high standards, represented and embedded in the community with strong local brands, whilst offering the best service for the best prices. Central to our strategy is a focus on improving the culture of our business, empowering our colleagues and working openly together to be our best through teamwork. I look forward to working with our colleagues to deliver on this shared vision."
Webcast details
Dignity will live stream this morning’s presentation via video webcast, beginning at 11.00am UK time. To view the webcast, please log on 10 minutes prior to the event via the details below:
Video Webcast: https://webcasting.buchanan.uk.com/broadcast/60cb41da5b7397619f827887
To participate in the Q&A, please dial in via the below details to access the conference call:
UK Toll: +44 (0)330 336 9434
PIN: 7838916
Please note that webcast link is listen only – to participate in the Q&A please use the conference call details provided and questions will be taken from the phone lines.
Following the presentation, a recording of the webcast and a copy of the presentation slides will be made available on Dignity PLC’s website: https://www.dignityplc.co.uk/investors/
For further information please contact:
| Dignity plc | |
| Gary Channon, Executive Chairman | |
| Dean Moore, Interim Chief Financial Officer | |
| Buchanan | +44 (0) 20 7466 5000 |
| Richard Oldworth | dignity@buchanan.uk.com |
| Chris Lane | |
| Tilly Abraham | |
| www.buchanan.uk.com |