Dignity slumps to loss despite UK death toll soaring to highest since 1918

Funeral provider Dignity has swung to a full-year loss despite the pandemic sending Britain’s annual death toll soaring to its highest level for more than 100 years.

The group said UK deaths surged 14% to 663,000 in 2020 – the highest since 1918, which witnessed the end of the First World War and the Spanish Flu pandemic.

But Dignity still reported pre-tax losses of £19.6 million for the year to December 25, against profits of £44.1 million the previous year as coronavirus restrictions impacted upon its services.

On an underlying basis, pre-tax profits slumped 19% to £30.7 million.

Dignity – the UK’s only listed funeral provider – said it suffered immense stresses on its operations as the deaths jumped nearly 50% higher between April and June in the peak of the first wave.

It said the death toll swung between an increase of 1% between January and March, to a 47% rise in the second quarter, before falling 2% between July and September and then surging 8% at the end of the year as the second wave hit.

The group said its operations were put under strain, even though it keeps more than a fifth of mortuary capacity free at any one time.

A restricted service offering due to Covid-19 restrictions and extra expenses of PPE measures and additional temporary staff costs also put pressure on its earnings, according to the group.

Average revenues per funeral dropped to £2,522 from £2,930 a year ago as the Government restricted attendance at funerals due to the pandemic.

The group also had to contend with a Competition and Markets Authority (CMA) 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 leading a “root and branch” review of the firm as part of a turnaround, which is set to conclude in the second quarter.

But it has come under fire from its biggest shareholder, Phoenix Asset Management Partners, which last week launched an attempt to oust Dignity executive chairman Clive Whiley.

The investor has asked for a vote to be tabled on the future of the chairmanship, proposing its own founder and chief investment officer, Gary Channon, to replace Mr Whiley.

Announcing Dignity’s results on Wednesday, Mr Whiley said: “During 2020, we have continued to be focused and resilient in the light of many changes, however the business has remained robust.”

But he added: “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.”