(Alliance News) - Funeral services and prepaid funeral plans provider Dignity PLC on Tuesday set its sights on its biggest shareholder, with a showdown expected next month amid a battle for control of the group.
The company said it will hold a meeting on April 22 for investors to vote on a proposal by Phoenix Asset Management Partners to oust Dignity's executive chair, Clive Whiley.
Dignity blasted the move as "wholly unnecessary" and said its three independent board directors will resign if Phoenix succeeds in replacing Whiley with its own founder and chief investment officer, Gary Channon.
Dignity accused Phoenix, which has a stake of around 29.9% in the firm, of acting in its "own self-interest" and said Channon lacks the "skills and judgement" to run the firm at an executive level.
"The independent directors unanimously agree that, by virtue of his behaviour throughout the course of the board's dealings with him, Gary Channon has demonstrated himself as lacking the skills and judgement required of someone seeking to be responsible for leading the executive function of a public company of Dignity's stature," the company said.
Dignity added: "This wholly unnecessary act came at a time when the board had been making considerable progress towards the completion of the previously announced root-and-branch review."
It added that the independent directors believe "management continuity is vitally important to the strategic direction of the business, as the group works toward stability and growth".
Dignity said the behaviour of Phoenix "has led all three of the independent directors to form the view that Phoenix is not acting in the best interests of shareholders as a whole, but is instead driven primarily by its own self-interest".
The group urged investors to overturn the move by Phoenix and back Whiley, who it insisted has had a "galvanising effect on the business".
"He should therefore be given the time to conclude the strategy review and re-positioning of the company with the continuing help of the group's executive management team, so that the board can reach properly thought-through conclusions, without being dictated to by a minority shareholder whose motivation appears to be driven primarily by its own objectives," Dignity said.
The vote comes after Dignity's annual results earlier this month showed it swung to a GBP19.6 million loss despite the pandemic sending Britain's annual death toll soaring to its highest level for more than 100 years.
It said coronavirus restrictions had affected its services, while extra expenses such as PPE measures and additional temporary staff costs also put pressure on its earnings.
Average revenue per funeral dropped to GBP2,522 from GBP2,930 a year ago as the UK government restricted attendance at funerals due to the pandemic.
The group also had to contend with a UK Competition & Markets Authority investigation into the funeral sector, which started in 2018.
Last December, the CMA concluded that funerals were costing consumers too much, and made a series of recommendations.
Dignity has been undertaking a widespread review as part of a turnaround, which is set to conclude in the second quarter.
Dignity back in December appointed Dean Moore as interim chief financial officer, after Steve Whittern resigned as finance director. The company said at the time it "has not lost sight of the need to drive the ongoing root and branch review through to an economic conclusion."
Shares in Dignity were 4.1% lower in London on Tuesday at 634.80 pence each.
By Paul McGowan; paulmcgowan@alliancenews.com
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