(Alliance News) - Funeral services provider Dignity PLC on Wednesday reported a fall to loss in 2020, despite a 14% increase in deaths in the UK due to Covid-19.
The Sutton Coldfield, West Midlands-based company swung to a GBP19.6 million loss in the financial year that ended December 25 from a GBP44.1 million profit in the financial year that ended December 27, 2019. Dignity said underlying pretax profit declined by 19% to GBP30.7 million in 2020 from GBP37.7 million.
There was a 14% increase in deaths in the UK last year to 663,000 from 584,000 in 2019, according to Dignity, due to the virus pandemic. But revenue rose by just 5% to GBP357.5 million from GBP338.9 million.
The heavier UK death toll was related to Covid-19, but at the same time the restrictions put in place by the government to combat the pandemic held back revenue growth, Dignity said.
"Whilst Covid-19 featured heavily in our day-to-day activities into the first quarter of 2021, we did not lose sight of the numerous project work-streams initiated in the last year, aimed at affording the board the time and collateral necessary to allow the business to self-heal, without recourse to dilutive funding initiatives," said Chair Clive Whiley.
The chair noted that Dignity's "transformation plan" was paused indefinitely last April at the onset of the pandemic in the UK in order to save money. It had been expected to cost GBP50 million over three years to achieve an annual benefit to earnings of GBP10 million. Instead, Dignity now is conducting what it calls a "root and branch review" of the business, expected to be completed in the second quarter of this year.
Dignity is without a permanent chief executive or chief financial officer after the recent departures of Mike McCollum and Steve Whittern. "We are currently engaged in seeking a new chief financial officer," Whiley said on Wednesday, "and we will continue our search for an appropriate candidate for the role of chief executive officer, coterminous with the outcome of the root and branch review."
Whiley himself is under pressure from Dignity's largest shareholder, Phoenix UK Fund, which has a 29.9% stake. Earlier this month, Phoenix requisitioned a general meeting to oust Whiley and replace him with Gary Channon, the founder of Phoenix Asset Management Partners, which manages Phoenix UK Fund.
"Unfortunately, notwithstanding the significant progress the business has made since my appointment, our largest shareholder Phoenix Asset Management Partners, with whom we believed we were having a constructive dialogue in relation to the future strategy of the business, has chosen this moment to seek to assert what would, in effect, be executive control at board level," Whiley said Wednesday.
The company hasn't paid a dividend since June 2019. Whiley said the board doesn't expect to pay dividends "until the business has returned to a sustainable and stable financial footing".
Dignity shares were up 4.6% at 635.00 pence in London early Wednesday.
By Tom Waite; thomaslwaite@alliancenews.com
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