We’re Shorting Dignity PLC Stock 5

Warning: This blog post is not investment advice and neither is the report which it links to. By accessing either, you confirm that you have read and agree to the Terms of Use.

Hello,

We’re rapidly bringing price transparency to the funeral industry

At Beyond*, we’re on a mission to make choosing a funeral director a more transparent process. To that end, and to date, we have signed up over 800 independent funeral directors to share their full, itemised, comparable prices online.

There are, however, two large obstacles to price transparency in this market, namely Dignity PLC and Coop Funeralcare. They represent 34% of the market and are desperate to avoid price transparency, despite occasional claims otherwise.

UK Funeral Market Affiliation Dignity PLC
UK Funeral Market Affiliation

Dignity’s business model is unsustainable

Why such shyness with prices? It’s because they are significantly more expensive than the rest of the market – Dignity by 83% compared to prices on our site. If they were to put transparent, easily comparable prices online, consumers might realise this price differential and take their business elsewhere.

Dignity are, in my view, the worst offenders – because not only do they hide their prices, they also hide their name. When they buy up independent funeral directors, they don’t rebrand them as Dignity. Instead they keep the old family name above the door, so that consumers don’t realise that the branch has become part of a corporate. They simply swap out the staff, put the prices up and no-one’s the wiser.

Here at Beyond, we believe that Dignity’s business practice and model are unsustainable. We think it has been propping up its share price with unearned price increases and self-defeating acquisitions for years. That it is a house built on sand, with a tsunami on the horizon.

We’ve published a detailed analysis on their business

Now, I hear you say, it’s easy to make a few disparaging comments about a £1.3bn market cap company. Especially a company who could be seen as a competitor. So, to that end, I offer you two tokens of our conviction.

Firstly, today we publish a 13,000-word analysis of Dignity PLC entitled “The Reaper Calls For Dignity” written by my co-founder James Dunn. Within the report he examines Dignity’s business in detail, using both publicly available information and our market expertise to make a clear case that they are grossly overvalued.

And we’re shorting Dignity’s stock

Secondly, we are so confident of their failings that we have taken a short position on Dignity stock to the tune of £50,000. To clarify, we have placed Beyond’s money (and some of our own) on the belief that Dignity’s share price will fall. I’m not sure this is traditional business practice or expenditure for a start-up. Then again, I’m not sure there has been another such market where a large incumbent has escaped even the lightest of scrutiny.

We’ve been in the funeral industry for a couple of years now and one of the key things that has stood out to me is that, notwithstanding the many genuine people trying their hardest to serve the consumer, there is an entrenched fear of rocking the boat; of calling out the elephants in the room. Despite the constant public consternation at funeral price cost rises, there is little desire from the industry associations or the media to call out the big guys and their opaque practices, which drive up prices and bring the overall industry into disrepute.

Well, today Dignity PLC, here’s us calling you out.

Best

Ian

P.S. Dignity CEO Mike McCollum recently sold most of his shares – we wonder why?

 

*Previously Funeralbooker

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5 Comments

  1. Will read the detailed report with interest, thanks. I couldn’t agree more with the fear of ‘rocking the boat’. As a team of over 30 celebrants, we have been trying to challenge the outrageous prices for years but all this has meant is that FDs won’t use our team, a form of blacklisting going on for anyone who will speak out about it. I would be happy to share a several pieces of info with you.

  2. Brian Howard B M &C Howard Funeral Services. I will send you a copy of a letter that I wrote to the local press and MP Mr I Duncan Smith then minister of the DWP in 2013, there was quite a few letters sent during 2012 and 2013 concerning the Social Funeral Fund, Dignity, Co-op, and the NAFD. The problem with Dignity, Co-op funeral care, and other funeral groups are backed up by the NAFD which is just puppet and not fit for purpose.

  3. Dignity stock fallen from £22 at time of article to under £10 today.

    classic case of a business that has enjoyed high margins but is vulnerable as the higher priced service offered does not add value to the customer.

  4. Only just discovered this website. What an excellent and accurate piece of research. Well done. Whether or not it was your intention, you’ve benifited society as a whole. Thank you.

  5. Amazing that Dignity’s share price has recovered a little after an initial 20% drop in the in the light of the Competition and Markets Authority investigations into the funeral market – you’d have though the only way was down!

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Launch of Children’s Funeral Fund Promises Help for Bereaved Parents 0

Children’s Funeral Fund

The launch of the Children’s Funeral Fund was announced this week, over a year since then-Prime Minister Theresa May approved it. The Fund offers bereaved parents much-needed help with cremation, burial and coffin costs.

The Children’s Funeral Fund comes as a result of a lengthy cross-party campaign led by Labour MP Carolyn Harris, whose son Martin died tragically at the age of 8. Harris’ tireless campaigning has already led to success in Wales, with England following suit now.

 

Who does the Children’s Funeral Fund help?

The Children’s Funeral Fund offers financial support to parents who have lost a child under the age of 18. The Fund also supports parents who lose a child in the late stages of pregnancy, after 24 weeks.

 

What does the Children’s Funeral Fund cover?

The Fund will cover:

  • All cremation costs, including certificates
  • All burial fees, including grave digging 
  • Up to £300 towards the cost of a coffin

 

How do parents claim from the Fund?

The Children’s Funeral Fund is organised so that most parents won’t have to do more than they usually would to arrange their child’s funeral. Instead, funeral directors and staff at crematoria and cemeteries will simply apply to the Fund for payment for their services.

Families who choose to arrange the funeral themselves, without the help of a funeral director, will also be able to apply to the Children’s Funeral Fund on their own behalf.

If you are a funeral professional and you’d like to find out more about how exactly to claim from the Children’s Funeral Fund on behalf of a family, click here.

 

What doesn’t the Children’s Funeral Fund cover?

Most funeral directors waive their professional fees when caring for a child who has died. Now, with the coffin,cremation and burial fees also taken care of, the cost of a funeral is almost completely covered. Parents will only have to pay for a few third party services, such as flowers and a venue for the wake.

 

Is other help available?

For parents who need financial help with the remaining costs, it’s useful to know that they will still be able to apply for the Funeral Expenses Payment. This is a type of government grant available to pay for a funeral if the family is on certain qualifying benefits. You can find out more about the Funeral Expenses Payment and other forms of financial support here.

Are you a bereaved parent, or a funeral professional? Share your thoughts about the new Children’s Funeral Fund here.

Bereaved Families to Receive Funeral Expenses Payment Sooner 0

Family holds up piggy bank spilling out coins

Families in need of help with funeral costs will now receive it much sooner. The welcome move comes as a result of a change in the way the Funeral Expenses Payment is handled.

The Funeral Expenses Payment helps bereaved families on certain benefits pay for a funeral with a one-off grant. The average payment is around £1,500.

Previously, families had to have a date set for the funeral in order to apply. Now, they can simply give an approximate date, so long as the other details needed for the claim are all present and correct.

The change is expected to make getting help with funeral costs much swifter and less stressful for the 800 people a week who make a Funeral Expenses Claim.

DWP Minister Will Quince said:

These important changes will make the very difficult time of planning a funeral or cremation that bit easier for bereaved families. Helping families access Funeral Expenses Payments sooner and more quickly means they can focus on the much more important task of arranging a proper send-off for their loved one.

This update follows on from another important update to the Funeral Expenses Payment, which removed the need to submit a final invoice from a funeral director to make a claim. Instead, families can use the initial contract with the funeral director to act as proof of the funeral’s cost. This means that it’s now possible to apply for and receive a grant before the funeral takes place.

Together, the two updates are welcome news for bereaved families in need and for the funeral professionals who support them.

To find out more about the help available for funeral costs, take a look at our guide here.