DTY.L Regulatory News (DTY)

Dignity plc

Statement re: CMA Review

Dignity plc (Dignity or the Group), the UK's only listed provider of funeral related services, acknowledges today's announcement from the Competition and Markets Authority ("CMA") regarding the provisional findings of its study into the funerals market and notes its proposal to carry out a full market investigation. Dignity is considering the recommendations in detail and notes the key findings. Dignity has engaged constructively with the CMA since the market study was announced in June 2018 and strongly supports the opportunity to improve standards within the sector and meet the expectations of consumers.

Greater choice for consumers

Dignity welcomes the focus in the report on transparency and competition.

Dignity believes there is need for greater transparency on pricing, more consumer choice and high levels of quality across the sector. The Group has acknowledged that there is rising consumer demand for lower cost funeral options and has already been making considerable steps to provide a wider range of choice for its customers.

In January 2018, in advance of the CMA market study being announced, the Group implemented a new pricing policy and continues to test and consider a range of new price points and services for its customers, while preserving Dignity's unrivalled levels of service and quality. Delivering excellent client service remains a key strategic priority and means that the Group can offer the best quality service at each price point and market segment in which it chooses to operate.

In order to create greater transparency, the Group has committed to making the funeral prices for all its branches across the UK available online by the end of Q1 2019. Furthermore, the Group has committed to unbundle the price structure of its funeral business to create a more compelling proposition and greater flexibility for clients.

The Group has continued to develop its low-cost Simplicity proposition. In October 2018, Dignity's Simplicity brand launched a unique new low-cost attended funeral service, providing people with all the practical and essential elements of a cremation, without the obligation to pay for traditional ceremonial elements they might not want. This is the first service of its type available across the UK and, unlike other low-cost options, gives people the freedom to choose when the funeral takes place rather than having to accept a time slot allocated by the service provider. Dignity's Simplicity service is the lowest price, nationally available, attended funeral service.

The Group is focused on enhancing the customer proposition, its service and pricing model and will continue to adapt to serve evolving client needs.

Leading the call for regulation and higher standards

Dignity has led calls for greater regulation of both at need and pre-paid funeral sectors for some time, while continuing to set the standard for what constitutes best practice in the industry.

The CMA's work in the sector provides a significant opportunity to improve standards and protect consumers. The Group welcomes the CMA's initial focus on this area, and would encourage them to explore this further as they develop their final recommendations.

UK consumers assume all funeral directors are the same, that their market is regulated and each of them is operating to a consistent set of professional standards, when in fact none of these statements are true. The Group had commissioned significant research by an independent consultancy that shows consumers want to see common and high professional standards for funeral directors, along with clearer guidance on pricing and service, to help safeguard confidence and improve choice. Dignity's research showed that 92% of consumers did not know that funeral directors were not regulated in the UK, but once aware 80% supported regulation to ensure minimum standards.

Dignity believes the funeral industry will benefit significantly from proper regulation to ensure that clients can assume high minimum standards, and effectively assess and compare what a funeral service includes. The Group would welcome regulation which sets out minimum standards for core activities such as the care of the deceased, minimum standards of facilities and also operating procedures in crematoria.

The Group has shared its research and supporting information with the CMA and will continue to make the case for agreed minimum higher standards. As part of this the Group is leading a cross-industry initiative, bringing together industry, consumer bodies and policymakers, to develop collaborative long-term solutions to improve standards and transparency across the sector.

Mike McCollum, Chief Executive of Dignity commented:

"Dignity notes the CMA's proposal to launch a full market investigation and takes its findings very seriously. Dignity has voluntarily been making changes to its business for some time and will continue to review its operations to ensure that we address the CMA's concerns. We are fully committed to ensuring that vulnerable consumers are protected across the industry going forward.

"Dignity has and continues to make the case for quality, standards and stronger regulation in the sector and support for this continues to grow. We are pleased to see that the CMA notes that quality is important. We look forward to working with the CMA and would welcome the opportunity to show the CMA various Dignity locations to demonstrate the high levels of quality that Dignity adheres to.

"Dignity has committed to making its prices easily available for consumers by putting them online and believes that all operators should be required to follow suit to ensure greater transparency on pricing across the sector.

"Price is a factor when making a decision, but quality is also a vital component and ultimately ensures that consumers are happy with services provided. Whilst Dignity's Simplicity service is the lowest price, nationally available, attended funeral service, our research evidences that consumers consider the smooth running of the funeral and proper care of the deceased more than cost. Our business has been built with a focus on high quality service delivery and we closely monitor the results of our client surveys to ensure we continue to maintain the highest levels of excellent client service and standards of care.

"We look forward to our continued work with the CMA and other industry bodies to ensure we take the necessary steps to protect consumers and improve quality and standards across the industry."

Market Abuse Regulation

The information contained within this announcement is deemed to constitute inside information as stipulated under the Market Abuse Regulations (EU) No. 596/2014. Upon the publication of this announcement, this inside information is now considered to be in the public domain.

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