Dignity returns £54 million in cash: Dignity is planning to make a surprise return of cash to investors as the listed funeral company carries out a major refinancing. The company said it will return around £54 million in cash to shareholders, or £1 per share, only 13 months after its last sweetener to investors. Dignity is looking to raise about £580 million by issuing new corporate debt and with the cash raised it will repay the existing £406 million in debts and return the rest of the cash to investors, less around £15 million in fees. However, there will be a one-off accounting charge in this year’s results of around £110 million related to the transaction. The company uses funds from debt to grow through acquisition. The majority of funeral parlours in the U.K. are still independently owned businesses. The company added 54 new funeral locations last year, once branch closures had been subtracted, and has delivered steady growth for the past decade. Since the company floated in 2004, revenue growth has been 7.3% a year, and earnings per share have increased by 16% a year. Britain has experienced a stable death rate of between 540,000 and 600,000 each year for more than half a century. Management at Dignity is predicting it will be at the lower end of that range, at about 543,000, this year. Questor thinks this company is well worth watching and buying if we get a market correction in the future, but at this price it is looking a bit too rich. Hold. Questor thinks this company is well worth watching and buying if we get a market correction in the future, but at this price it is looking a bit too rich. Dignity at £14.55+23p Questor Says ‘Hold’.
19 Aug '14
I am sure the Ebola bullet has the UK's name on it, in which case this one will fly!
30 Jul '14
Yeah I totally agree, looked into this for clients around 6 months ago as I was looking for something with low correlation. However it's only paying a tiny divi so your returns have to be generated by growth, of at least 2% pa just to keep up with inflation. If you have long enough time horizons then this is a good investment. The demographic is about to balloon at the top end, biotech firms have lead the way with massive investments/innovations hoping to save the health services billions in the long run. However sadly no matter how much money is thrown at bio tech firms there is nothing more certain than..... Dignity is a business with a growing customer base. Inflation could be your enemy here
4 Jun '14
You know what, theres one thing wrong with this company that has put me off buying, the poor dividend. I really think they can pay the shareholders a little more than less than 1%
19 Mar '14
slow steady sp
it is my experience that people dont shop around for the best price at such a difficult time, they tend to use the local undertaker whoever that may be
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