News

30/09/2022

Interim results for the 26 week period ended 1 July 2022

Progress made against strategy delivery, and well prepared for new funeral plan regulation.

Dignity plc (Dignity, the Company or the Group), one of the UK's largest national providers of funeral plans and end of life services, announces its unaudited interim results for the 26 week period ended 1 July 2022.

Alternative performance measures (APMs)
All measures marked as underlying in the table above and throughout this announcement are alternative performance measures. The Board believes that whilst statutory reporting measures provide financial performance of the Group under IFRS, APMs are necessary to enable users of the financial statements to fully understand the trading performance and financial position of the Group. The APMs provided are aligned with those used in the day-to-day management of the Group and allow for greater comparability across periods. For this reason, the APMs provided exclude the impact of consolidating the Trusts and the changes which relate to the application of IFRS 15, as well as non-underlying items comprising certain non-recurring and non-trading transactions.

Key points

• We continue to implement our new strategy and are seeing early signs of this coming through in market share, whilst also recognising the initial adverse impact on profitability
• As explained in the 2021 Annual Report, the Company reported a potential adverse impact on underlying revenue and underlying operating profit. This is due to a combination of factors, including fluctuations in the death rate, partnered with a change in our pricing strategy and introduction of a direct cremation service through our funeral network
• Delivered our regulatory programme and achieving authorisation by the Financial Conduct Authority (‘FCA’) under new funeral plan rules, which came into effect on 29 July 2022
• Development and launch of our innovative new funeral plan proposition, and the creation of a new trust to support this
• Organisational restructure continues, supported by the new brand strategy
• Confirmed our commitment to be net zero across the Dignity network by 2038
• Launched and now embedding our new guiding principles, which will be the framework for culture change at the Company, including ensuring salaries are industry competitive for client facing roles
• Continuation of a large capital expenditure programme linked to delayed works from previous years during the pandemic as well as a property portfolio programme that is prioritising key investment needs across our estate
• Total impairment of £62.9 million of the Group’s non-current assets following slower funeral market share growth combined with more branch direct cremations rather than full adult funerals being performed than originally anticipated
• We successfully reached an agreement with bondholders in September which allows the Group to begin deleveraging and removes some restrictions from the securitisation

Kate Davidson, Chief Executive Officer of Dignity plc, commented:

“Over the past few years our business has risen to the challenges presented by COVID-19. We have continued to deliver excellent customer service whilst also implementing our new strategy as well as preparing and achieving FCA regulatory approval for new funeral plan rules, whilst recognising the short-term adverse impact on our financial performance. Our people have risen to these challenges and, through the embedding of our Principles and values introduced earlier this year, we believe that we are well placed to achieve our key aims of becoming the leading end-of-life service provider in the UK and a deserving and rewarding employer.”

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