Okay, so funerals should be sombre affairs; maybe even a little dull. But who says that should apply to funerals’ operators? Where the UK’s second-biggest operator, Dignity (DTY), is concerned, adjectives such as ‘savage’ or ‘hilarious’ seem more appropriate.
For some years, Dignity has been a case study in how to mismanage a business; how to take a profits machine, where shareholders’ returns should be almost as reliable as inflation-linked government bonds, and reduce it to bloated mediocrity. Onto that, more recently, came the disruption of an investigation by the UK’s competition regulator followed by the misery of Covid-19. Now, hopefully reaching its denouement, is a venomous squabble between the company’s directors and its biggest shareholder. Talk about not raining but pouring.
Apart from the entertainment value of the slanging match, will investors benefit? Possibly. Whatever the outcome of its civil war – and, depending on when you read this, it may already be known – Dignity will still be around, with 12 per cent of the UK’s funerals’ market, almost as much for cremations and a £1bn-plus kitty for the pre-paid funerals of over 500,000 folk. So the raw material to make a richly profitable business remains intact.