Last week the funeral profession was rocked by the news that Dignity Plc issued a ‘going concern’ warning.
According to financial information specialists S&P Global, “a going concern warning is issued by a company’s management or auditors – or both – when they believe that within the upcoming 12 months from the date of the report ‘it is probable’ the company will not have the liquidity to pay its obligations as they come due, or will violate a debt covenant.”
This is extremely worrying to both the funeral profession and the public.
Dignity Plc is a national funeral chain that operates over 725 funeral homes across the United Kingdom – a network that has been built by acquiring smaller businesses over several decades.
Crucially, many members of the public may not be familiar with Dignity Plc as the business operates the majority of its funeral homes using the name of the original owners.
It’s fair to say that for decades some families have used a Dignity Plc funeral home unaware that the original family who owned or founded the company had left the business long ago.
This lack of transparency was addressed in the Competition and Markets Authority’s Funerals Market Investigation Order 2021, which required clear disclosure of business ownership at funeral director premises, among other measures.
A challenging five years
The last five years have not been kind to Dignity. In a recent interview with The Times, noted entrepreneur Sir Peter Wood stated: “It’s been not well run to say the least. It was a buy, buy, buy, buy, put the price up [strategy]. And growth was all by acquisition.”
The primary concern from Dignity’s recent warning to investors comes in two forms. Firstly the potential threat to existing funeral plans, and secondly the delivery of funerals already in process.
The funeral market has experienced significant change in the last five years. The Competition and Markets Authority made it clear that the pricing policy of the national chain funeral providers was unjustifiably expensive. These businesses’ response was to reduce their prices to become more aligned with those of independently owned funeral providers. The latest Dignity Plc report clearly shows this has not worked well.
In a challenging market, if a business is committed to delivering both a quality service to grieving families and a return to investors, something has to give. The drop in families choosing a Dignity-owned funeral home suggests that families have started to look elsewhere.
When choosing a funeral director for immediate need or to discuss a funeral plan, it is important to know who owns the business and that they operate to the highest standards.
We are proud to still be a family owned business, SAIF Approved and focussed on delivering for the families we serve in our own community, not far away shareholders.
–
Turnbull.
Serving our community since 1790
