News

07/06/2018

AGM Statement

Dignity plc, the UK's only listed provider of funeral related services, will hold its Annual General Meeting ('AGM') at 11.00 a.m. today. At the meeting, the Group’s Non-Executive Chairman, Peter Hindley, will make the following statement.

"Although 2017 was another successful year for the Group with the pre-arranged and crematoria businesses performing strongly, in January 2018 we announced decisive action to modify our pricing strategy and market positioning. This action was taken to protect market share and reposition the Group for future growth in the face of changing market conditions and increased competition. Since that January announcement we have provided three updates in quick succession.

In our Preliminary Results statement announced on 14 March 2018 we said that we expected trading in 2018 to be volatile because the relationship between funeral price, service and volume would take time to settle down. Furthermore, we said that an initial analysis of the mix of funerals, since the introduction of the reduced simple funeral price, had shown a step change in the number of simple funerals conducted by the Group, at a run rate of approximately 15 percent of all funerals, lower than the 20 percent originally anticipated by the Board. We also commented that the absolute number of deaths in the first two months of 2018 was approximately seven percent higher than the previous year.

Our First Quarter Trading Update was announced on 18 April 2018, in which we said that the death rate trend was running at approximately eight percent ahead of last year for the first quarter. Based on this, the Board confirmed that it believed that results for the full year would be ahead of market expectations. The Group has seen full year market expectations subsequently increase.

The Group issued its First Quarter Results announcement on 14 May 2018, and as well as providing more detail on our ongoing strategic work, we restated that the current year is all about completing the review of our funeral business and ensuring we continue to provide the excellent service our clients expect from us.

Following our First Quarter Results announcement we can report that trading since then has remained strong, however, our outlook for the year remains unchanged.

The Board believes that it is too early to conclude that the trading experienced to date is indicative of the likely funeral price and volume mix going forwards. The results of the ongoing price and service trials across the Group’s entire portfolio are crucial in determining our future market position.  However, the data from these trials is still at a very early stage and it is not yet possible to draw any meaningful conclusions. The Board continues to believe that trading during 2018 will be volatile.

We support the Treasury consultation on the funeral plan sector and the Competition and Markets Authority market study of the funeral and crematoria industries, which were both announced on 1 June and look forward to sharing the work we have already collated to support the calls for regulation we have been making for some time.

On 1 August 2018, the Group will announce its Interim Results for the 26-week period ended 29 June 2018 and the Board will provide a further update on the results of our ongoing service trials and the operational review being undertaken in conjunction with L.E.K. Consulting from which a comprehensive multi-year plan will be developed and actioned."

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