Dignity swings to FY loss despite modest underlying revenue growth

Funeral services provider Dignity said on Wednesday that it had swung to a full-year pre-tax loss despite reporting modest underlying revenue growth in the 52 weeks ended 25 December.

Dignity said it had fallen to a pre-tax loss of £19.6m, a marked turnaround when compared to the prior year's £44.1m pre-tax profit.

Underlying pre-tax profits were also lower, down 19% to £30.7m, while underlying operating profits fell 12% to £55.7m and underlying earnings per share tumbled 23% to 46.6p each.

Underlying revenues improved 4% year-on-year to £314.1m but Dignity said average revenues had been hindered due to Downing Street's Covid-19 restrictions.

However, the FTSE 250-listed firm did add that its performance had remained “robust” with its crematoria and pre-need divisions performing well.

Dignity also stated it had underlying net debt of £480.6m, down from the £506.2m reported at the end of 2019.

Elsewhere, Phoenix Asset Management, which owns roughly 30% of the firm, called for a general meeting as part of an effort to oust Clive Whiley as chairman and appoint its own chief investment officer Gary Channon as an executive director.

Chairman Clive Whiley said: "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

"Whilst, in my view, the group is now sufficiently robust to sustain this wholly avoidable and unnecessary challenge, it is nonetheless an unwelcome distraction as we remain dedicated to dealing with the ongoing fallout from the pandemic. To minimise disruption, the independent directors have been charged with taking the necessary steps to convene the required general meeting of shareholders and they will share their views on the resolutions to be considered at that time. It will then be for shareholders to decide on the merits of the Phoenix proposal."

As of 0925 GMT, Dignity shares were up 4.90% at 636.74p.