Dignity, PLC, the United Kingdom’s death care conglomerate announced on March 14 that they would be hiring L.E.K. Consulting to work them them in developing a plan for the funeral business going forward. This comes following their January 19 announcement that the company would be drastically reducing their funeral service prices to consumers in response to the changing market conditions of the UK death care industry.
In the announcement that you can read here, Dignity said that the company did about 590,ooo services in 2017 which was unchanged from the previous year. The firm produced 2017 profits of about $US 99.4 million.
The company also mentioned that they added 24 locations to their proclaimed list of about 800 location branches throughout the United Kingdom. They also announced that they pre-arranged about 450,000 services as compared to about 404,000 in the previous year — that is about an 11% increase.
Finally, the company announced that while the plans they are making this year by lowering the price of services will lead to substantially lower profits in 2018, it should create a new platform to allow many years of further stable growth. If you have more interest in the company you can see their web-site here.
Funeral Director Daily take: Dignity, PLC made waves in January when they announced that they will be reducing prices – for some services and in some locales – as much as 50% to the consumer public. While that is quite a drop in prices — there was also a consumer demand for more transparency around death care prices in the UK.
Going forward, it looks to me like Dignity is out to raise market share at the expense of large profits for the foreseeable future. If this is indeed the strategy, they could raise market share enough to drop others from the market and then have more leeway to raise prices in the future. Watching the stock of Dignity, PLC might be an interesting thing to do if we see revenues and profits drop off. The question may very well be. . .do shareholders have the stomach to see this through?