Final Results
Dignity PLC
03 March 2005
For immediate release 3 March 2005
Dignity plc
Preliminary results for the 53 week period ended 31 December 2004
Dignity plc, Britain's largest single provider of funeral-related services,
namely funeral services, cremations and pre-arranged funeral plans, announces
its preliminary results for the 53 week period ended 31 December 2004.
Financial highlights
Underlying profit before tax (note a) up 31% to £22.0 million (2003: £16.8 million)
Operating profit (note b) up 17% to £37.4 million (2003: £32.0 million)
Turnover up 5% to £135.7 million (2003: £129.0 million)
Operating cashflow up 5% to £44.1 million (2003: £41.9 million)
Final dividend per share (note c) 3.75p per share
(a) Before goodwill amortisation, exceptional items and non-recurring finance
charges
(b) Before goodwill amortisation and exceptional items
(c) Total dividend of 5.625p per share
Operating highlights
• Results ahead of expectations despite lower than anticipated
death rate
• Nine new funeral home locations acquired, including three since
the year end
• Four new branch openings
• New crematorium in Scotland
• Total unfulfilled pre-arranged funeral plans: 170,200 (2003:
164,300)
• Client satisfaction at record high
Peter Hindley, Chief Executive of Dignity plc:
'I am pleased to report a strong performance for the Group. We have delivered
results ahead of expectations, despite the lower than anticipated death rate.
The Group continues to trade well and we expect to make further progress in
2005.'
For more information
Peter Hindley, Chief Executive
Mike McCollum, Finance Director
Dignity plc +44 (0) 20 7466 5000
Richard Oldworth
Suzanne Brocks
Mark Edwards
Buchanan Communications +44 (0) 20 7466 5000
Chairman's Statement
Introduction
This is Dignity's first preliminary announcement following its admission to the
Official List of the London Stock Exchange in April 2004. Dignity is the largest
provider of funeral related services, namely funeral services, cremations and
pre-arranged funeral plans in Britain, and is the only UK listed company in this
area.
As reported in our interim results last August, the listing in April 2004 raised
£123.0 million before expenses, which was used by the Group to repay expensive
debt, secure a more diversified ownership and create a platform for sustained
growth.
Results
I am pleased to report a strong trading performance in our first year end
results as a listed company. Operating profit before goodwill amortisation and
exceptional items has increased by 16.9% to £37.4 million (2003: £32.0 million).
Operating profit has increased by 24.6% to £33.9 million (2003: £27.2 million).
The Group performed 67,600 funerals from our network of 512 funeral homes around
the country and 38,400 cremations from our 22 crematoria. This was achieved
against a background of lower recorded deaths in the year. Total recorded deaths
for the 53 week period to 31 December 2004 in Great Britain were 574,500
compared to 592,200 in the comparative 52 week period in 2003. This was 3.5%
below our expectations for the period. Historically, fluctuations in recorded
deaths have tended to be self-correcting and the Board's view on death rates
continues to rely on government forecasts. Based on these forecasts, we expect
579,700 deaths in 2005.
The lower than expected revenues in the period, arising from a fall in the
number of deaths, was more than offset by continued strong cost control in all
areas of the business. The details of the trading results are included in the
Operating and Financial Review.
The number of unfulfilled pre-arranged funerals plans at the end of the year was
170,200 (2003: 164,300). The Group expects to perform the majority of these
funerals.
Underlying profit before tax and dividend
Underlying profit before tax in the financial year was £22.0 million compared to
£16.8 million in the previous year, an increase of 31.0%. This is stated before
exceptional items, amortisation of goodwill and non-recurring finance charges
and is ahead of our expectations. After taking account of these items, the
reported profit before taxation is £3.1 million (2003: loss £3.5 million).
The Board has declared a final dividend of 3.75p per share, which subject to
approval at the Annual General Meeting, will be paid on 31 May 2005 to
shareholders on the register at 6 May 2005. This makes a total dividend for the
year of 5.625p per share and is consistent with the Group's dividend policy as
set out at the time of flotation.
Developments
As part of its stated strategy, in 2004 the Group acquired six funeral home
locations, funded from existing cash reserves and internally generated cash
flows. In addition, since the year end, the Group has acquired a further three
funeral home locations. Since flotation, this brings the total investment in
acquisitions to £8.8 million. The quantum of investment and the prices paid were
in line with our previously stated expectations. The Group continues to seek
further acquisitions to develop and enhance the network of Dignity branches.
In addition, the Group opened four new funeral home locations under local
established trading names, sharing the resources of nearby existing Dignity
funeral homes. We also closed five funeral home locations where low volumes made
them uneconomic.
In August, the Group opened a new crematorium at Holytown in North Lanarkshire,
built in partnership with North Lanarkshire Council. Planning permission has
been granted to the Group for a new crematorium at Sydes Brae in South
Lanarkshire. This will also be built and operated in partnership with the local
Council.
Our staff
Our business requires a personal and sensitive service to clients. The Group's
commitment to the highest standards of service is central to our strategy. In
2004, customer satisfaction levels, monitored by our continuing client surveys,
exceeded last year's record high. We are fortunate to employ experienced and
caring staff, a large number of whom have devoted their working lives to the
profession. I would like to thank all our staff for their hard work and
dedication to client service.
Outlook for 2005
The successful flotation of the company has created a strong base for the future
development of the business. We expect to achieve this by a combination of
further acquisitions, opening new locations and seeking further partners for our
pre-arranged funeral plan business. The Group continues to trade well and the
Board expects the Group to make further progress in 2005.
Richard Connell
Chairman
2 March 2005
Operating and Financial Review
Operating Review
Introduction
The Group's operations are managed across three main areas, namely funeral
services, crematoria and pre-arranged funeral plans, which respectively
represent 80%, 16% and 4% of the Group's revenues. Funeral services relate to
the provision of funerals and ancillary items such as memorials and floral
tributes. Crematoria revenues arise from cremation services and the sale of
memorials and burial plots at the Group's crematoria and cemeteries.
Pre-arranged funeral plan income represents amounts to cover the costs of
administering the sale of plans.
Performance in the period
Funeral services
The Group operates a network of 512 funeral homes throughout Britain, trading
under local established names. In 2004, the Group conducted 67,600 funerals,
representing 11.8% (2003: 11.7%) of total deaths in Britain.
Turnover within funeral services was £108.8 million (2003: £103.1 million) and
increased in all geographical areas of the division. Operating profits before
exceptional items and goodwill amortisation were £33.7 million (2003: £30.0
million), an increase of 12.3%.
Although funeral volumes were lower as a result of the decline in the number of
deaths in the year, we are pleased that this was more than offset by strong cost
control.
We believe it is important to actively manage the Group's portfolio of funeral
homes. This year we have closed five funeral homes whose very low number of
funerals meant they were no longer profitable. We have opened four new funeral
homes in Edinburgh, Gateshead, Stoke-on-Trent and Southborough. These new
locations share the resources of nearby existing Dignity funeral homes.
As part of our stated strategy since listing, we have acquired nine new funeral
home locations, three of which were acquired in 2005. These new businesses are
located in Basingstoke, Broadstairs, Burnley, Chippenham, St. Albans and
Falkirk. They are all long established, highly reputable businesses.
Crematoria
The Group operates 22 crematoria and carried out 38,400 cremations in 2004
representing 6.7% (2003: 6.7%) of total deaths in Britain. The Group is the
largest single operator of crematoria in Britain.
Turnover within crematoria was £21.6 million (2003: £20.1 million). Operating
profits before exceptional items and goodwill amortisation were £11.5 million
(2003: £9.1 million), an increase of 26.4%. The performance was achieved through
a combination of strong memorial sales that increased by 12.9% and were
significantly helped by initial sales of crypts at the new mausoleum at
Loughborough (approximately £0.4 million) and reduced costs following a
reorganisation of the business in 2003.
In August 2004, we opened a third crematorium in Scotland. The new facility at
Holytown in North Lanarkshire was built in partnership with the local Council
and represents a £2.0 million investment in our crematoria business.
We are also working with South Lanarkshire Council to provide a similar
facility. Planning permission has been granted at Sydes Brae and building is
scheduled to start in 2005.
The Group opened a new community mausoleum in July 2004 at our crematorium in
Loughborough. This was developed in conjunction with the local Council,
Charnwood Borough Council. It has been built to serve the needs of the Italian
community in the East Midlands, whose leaders were closely involved in its
design and construction. Further mausoleums were also constructed at our
cemetery at Streatham in London.
There have been no changes to the regulatory environment during 2004. However,
in January 2005 the Department of Environment Food and Rural Affairs announced
that crematoria operators should install equipment to cut mercury emissions by
50% by 2012 under new statutory guidance. The Group is confident that it can
meet all the new emissions legislation in the required timescales. We expect
funding for these changes to be via an industry wide environmental levy.
Pre-arranged funeral plans
Pre-arranged funeral plans allow people to plan and pay for their funeral in
advance. The Group is the market leader in the provision of funeral plans.
Unfulfilled plans increased to 170,200 from 164,300 by 31 December 2004. The
Group expects to perform the majority of these funerals.
The Group sells funeral plans through its network of funeral homes and primarily
through affinity partners, notably Age Concern, AXA and Royal London. Although
the level of unfulfilled plans grew during the year, this increase was lower
than expected because of reduced activity. In particular, AXA's planned activity
in 2004 was postponed. We are hopeful that activity will recommence in 2005.
Client service
We believe that excellent customer service is fundamental to the Group's
success. Personal experience, recommendation and location are the customer's key
criteria for the selection of a funeral director. We continually strive to
maintain our high customer satisfaction levels and improve client service.
During the year, we held 90 focus group meetings with staff to ask their views
on the service we provide families, and to ensure best practice is shared
uniformly throughout the Group. We send our clients a survey after every funeral
to monitor customer satisfaction. We have an approximate 50% response rate. This
survey monitors all aspects of client service, which continues to be at very
high levels.
Our employees
In 2004, the Group supported staff development and welfare through its Welfare
Trust. The Welfare Trust provides funds for staff for professional training,
hardship grants, and financial support for employees' children studying in
further education.
The Group also provides direct support to employees through both in-house
training and external training courses. Such external training includes both
relevant job training and tutoring for professional qualifications.
At the end of 2004, we announced a bonus totalling £0.6 million, in which every
member of staff not covered by the existing scheme was entitled to share. This
was in recognition of the hard work and commitment shown by our staff in all
areas of the business and allowed them to share in a successful 2004. We hope
that strong performances in 2005 and beyond will allow the Group to pay such
bonuses in the future.
Investment for the future
The Chairman has referred to the future development of the business in his
statement. Within the funeral services division the Group is committed to the
further proactive development of the national network of branches within local
communities. This will be achieved by further acquisitions but only where
suitable businesses can be identified and acquired at a price that should
deliver returns in excess of our cost of capital. In addition to acquisitions,
further new funeral homes will be opened where suitable locations and local
brand names can be identified. These initiatives will be progressed in
conjunction with reviewing existing locations for suitability and viability.
Within the crematoria division the Group remains committed to exploring further
partnership arrangements with Local Councils, who own and operate the vast
majority of crematoria in Great Britain. The Group also remains committed to the
further development of its range of memorial and interment options within the
memorial gardens at its crematoria and at its cemeteries.
Within the pre-arranged funeral plan division we are continuing to develop
further affinity partners.
The strong performance of the Group is a reflection of both the diligence and
outstanding service ethic of our staff in all areas of the business. I would
like to thank all staff for their contributions for both 2004 and looking ahead
into 2005.
Peter Hindley
Chief Executive
2 March 2005
Financial Review
The market conditions in which the Group operates and its trading performance
during the year ended 31 December 2004 are described in the Chairman's Statement
and the Chief Executive's Review.
Financial highlights
• Underlying profit before tax of £22.0 million (2003: £16.8 million), an
increase of 31.0%. In addition, Recoveries from the pre-arranged funeral plan
trusts were £1.2 million (2003: £1.0 million).
• Operating profit before goodwill amortisation and exceptional items
has risen 16.9% to £37.4 million (2003: £32.0 million).
• Turnover has increased 5.2% to £135.7 million (2003: £129.0 million).
• Operating cashflow increased by 5.3% to £44.1 million (2003: £41.9
million).
• A final dividend of 3.75p per share, making a total of 5.625p per
share for the Group's first year as a listed company.
Further statutory disclosures
• Operating profit has increased by 24.6% to £33.9 million (2003: £27.2
million).
• Profit before tax is £3.1 million (2003: loss of £3.5 million).
Underlying profit before tax and goodwill amortisation
The past two years have witnessed significant re-organisations of the Group's
capital structure, including the venture capital backed management buyout in
2002, the whole business securitisation in 2003 followed by listing and
redemption of expensive debt in 2004. Therefore comparison with prior periods or
assessment of underlying earnings is not straightforward. The directors are of
the opinion the following provides additional indicative information regarding
the underlying profits of the Group:
53 week period to 52 week period to
31 December 2004 26 December 2003
£m £m
Profit / (loss) before taxation for the period as
reported
3.1 (3.5)
Add / (deduct) the effects of:
Goodwill amortisation 5.9 5.6
Exceptional items (credited)/ charged to (1.2) 0.2
administrative expenses
Exceptional items credited to other operating income (1.2) (1.0)
(Recoveries from pre-arranged funeral plan trusts)
Exceptional interest expense 10.1 -
Interest expense of mezzanine loan and loan notes 2013 4.7 14.9
Amortisation of debt issue costs of mezzanine loan
and loan notes 2013 0.6 0.6
Underlying profit before tax and goodwill
amortisation* 22.0 16.8
* In addition, Recoveries from the pre-arranged funeral plan trusts were £1.2
million (2003: £1.0 million).
Cash flow and cash balances
Operating cash flow was £44.1 million in the period (2003: £41.9 million).
Expenditure on funeral home acquisitions amounted to £5.3 million (2003: £7.7
million), with expenditure on new openings and relocations amounting to £0.8
million (2003: £0.2 million). A further £7.7 million was spent on capital
expenditure, the majority of which was spent on replacing or enhancing existing
assets, principally the Group's vehicle fleet. The construction bond of £2.0
million in respect of the new crematorium in North Lanarkshire was released in
the year following the payment of the lease premium of the same amount.
Cash balances at the end of the financial year amounted to £24.9 million
although under the terms of the Group's secured borrowing, there are certain
restrictions on elements of this balance as described further in note 6. The
Group's operations continue to be significantly cash generative.
Capital structure and financing
The Group was listed on the London Stock Exchange in April 2004. Funds raised
from the issue of shares allowed the redemption of the £40.0 million mezzanine
loan and £57.0 million of the £63.0 million principal of the loan notes 2013
incurring an early redemption penalty of £4.0 million and the write-off of £6.1m
of deferred issue costs. The remaining £6.0 million principal of the loan notes
2013 were redeemed on 30 July 2004 from operational cashflows.
Following these redemptions, the Group's only material external debt financing
is the Class A and B secured notes, rated A and BBB+ respectively, of which
£205.3 million (2003: £208.9 million) was outstanding as at 31 December 2004.
Both tranches of debt were issued at fixed rates of interest and will be
progressively repaid over the next 26 years.
The directors are of the opinion the following provides additional indicative
information regarding the net debt position of the Group:
31 December 2004 26 December 2003
£m £m
Secured A and B notes (205.3) (208.9)
Mezzanine loan - (42.1)
Loan notes 2013 - (67.0)
Loan notes 2012 - (12.7)
Deferred issue costs 17.1 24.0
Cash 24.9 41.9
Restricted cash balances (1.2) (19.5)
Loan notes 2006 (0.1) (0.1)
Net Debt per FRS 1 Statement (164.6) (284.4)
Restricted cash balances 1.2 19.5
Deferred issue costs (17.1) (24.0)
Accrued interest on secured A and B - (7.4)
notes
Accrued interest on mezzanine loan - (6.9)
and loan notes
Economic Net Debt (180.5) (303.2)
Going forward, the Group's financial expense will substantially consist of the
interest on the Class A and B secured notes and the related ancillary
instruments that were issued in April 2003. The finance charge in the period
relating to these instruments was £16.7 million including the amortisation of
debt issue costs of £1.0 million. Other ongoing interest costs incurred in the
period amounted to £0.2 million, representing the unwinding of discounts on the
Group's provisions and other loans.
Taxation
The overall effective tax rate on earnings before goodwill amortisation and
exceptional items is approximately 32% and is not expected to vary significantly
in the short term. Significant changes to the capital structure have rendered
comparison of the tax charge to previous periods difficult. This tax rate is
higher than the standard UK tax rate of 30% due to the impact of disallowable
trading expenses and expenditure on the Group's premises that does not attract
any deductions for corporation tax purposes.
Earnings per share
The basic earnings per share were 0.6 pence per share for the period (2003: loss
of 13.2p per share). The potential issue of new shares pursuant to the Group's
share option plans in the period would affect the earnings per share by less
than 0.1 pence per share if exercised.
The Board considers the information on underlying profit before tax to be a more
useful indication of comparative performance given the changes in the Group's
capital structure in the year.
International accounting standards
Work is continuing to ensure that the Group is in a position to make the
transition to International Accounting Standards with effect from 1 January
2005. An initial assessment has been completed of the likely effects. An action
plan and programme of work has been developed and will be completed ahead of
announcing our 2005 interim results. Based on initial assessments, the greatest
impact is expected to be in the accounting for intangible assets, goodwill,
pensions, deferred tax, property leases, share based payments and dividends.
The sub-group headed by Dignity (2002) Limited, which raised the secured A and B
notes, will continue to report under UK GAAP. The usual quarterly report to
Noteholders on the Dignity (2002) Limited sub-group will be issued in respect of
the first quarter of 2005 in May 2005.
Pensions
The company operates two principal defined benefit pension schemes. Under FRS 17
the pension deficit would have increased from £8.9 million to £9.7 million.
Mike McCollum
Finance Director
2 March 2005
Consolidated profit and loss account
for the 53 week period ended 31 December 2004
Note 53 week period ended 52 week period
31 December 2004 ended
26 December 2003
£m £m
Turnover 1 135.7 129.0
Cost of sales (67.3) (66.1)
Gross profit 68.4 62.9
Distribution and selling costs (4.0) (4.6)
Administrative expenses (31.7) (32.1)
Other operating income 1.2 1.0
Operating profit before goodwill amortisation and 37.4 32.0
exceptional items
Goodwill amortisation (5.9) (5.6)
Exceptional items 2.4 0.8
Operating profit 1 33.9 27.2
Interest payable and similar charges before exceptional 2 (22.2) (31.7)
charges
Interest receivable and similar income 1.5 1.0
2
Exceptional interest payable and similar charges on 2 (10.1) -
redemption of debt
Net interest payable and similar charges 2 (30.8) (30.7)
Profit/ (loss) on ordinary activities before tax 3.1 (3.5)
Tax on profit / (loss) on ordinary activities 3 (2.7) 0.3
Profit/ (loss) on ordinary activities after tax 0.4 (3.2)
Equity minority interest - (0.3)
Profit/ (loss) for the financial period 0.4 (3.5)
Dividends 4 (4.5) -
Result for the financial period (4.1) (3.5)
Earnings/ (loss) per 7p share 5
- Basic and diluted 0.6p (13.2)p
The results have been derived wholly from continuing activities throughout the
period.
Statement of total recognised gains & losses
There were no other gains or losses other than those included within the results
for the period as shown above.
Note of historical cost profit & loss
There is no difference between the result disclosed in the profit and loss
account and the result on an unmodified historical cost basis.
Consolidated balance sheet
as at 31 December 2004
31 December 26 December
Note 2004 2003
£m £m
Fixed assets
Intangible assets 105.4 106.5
Tangible assets 89.3 86.2
Investments 1.0 1.0
195.7 193.7
Current assets
Stocks 3.4 3.1
Debtors - amounts falling due within one year 19.7 20.8
- amounts falling after more than one year 8.8 11.1
Cash at bank and in hand See (a) 24.9 41.9
below
Total current assets 56.8 76.9
Creditors: amounts falling due within one year (22.5) (47.1)
Net current assets 34.3 29.8
Total assets less current liabilities 230.0 223.5
Creditors: amounts falling due after more than one year (188.3) (293.1)
Provisions for liabilities and charges (10.0) (10.0)
Net assets/ (liabilities) 31.7 (79.6)
Capital and reserves
Called up share capital 7 5.6 2.0
Share premium account 7 111.6 -
Other reserves 7 (12.1) (12.3)
Profit and loss account 7 (72.2) (68.1)
Equity shareholders' funds 7 32.9 (78.4)
Equity minority interest (1.2) (1.2)
Capital employed 31.7 (79.6)
(a) Certain cash balances are subject to restrictions. See note 6.
Consolidated cash flow statement for the 53 week period ended
31 December 2004
Note 53 week period ended 31 52 week period ended 26
December 2004 December 2003
£m £m £m £m
Net cash inflow from operating activities 8 44.1 41.9
Returns on investments and servicing of 9 (37.8) (16.3)
finance
Taxation (0.1) -
Purchase of tangible fixed assets (10.5) (7.3)
Sale of fixed assets 2.3 1.5
Transfers from/ (to) restricted bank accounts 18.3 (7.3)
Construction bond 2.0 (2.0)
Capital expenditure and financial investments 6 12.1 (15.1)
Acquisitions and disposals (5.3) (7.7)
Equity dividends paid (1.5) -
Cash inflow before use of liquid resources 11.5 2.8
and financing
Management of liquid resources 6 (5.3) -
Financing - issue of shares 115.2 -
- decrease in debt (125.4) (0.9)
(10.2) (0.9)
(Decrease)/ increase in cash in the period (4.0) 1.9
Reconciliation of cash flow statement to movements in net debt
53 week period ended 52 week period ended
31 December 2004 26 December 2003
£m £m
(Decrease)/ increase in cash in the period (4.0) 1.9
Cash outflow from increase in liquid resources 5.3 -
Cash inflows from decrease in debt 125.5 7.2
Change in net debt resulting from cash flows 126.8 9.1
Other non-cash changes (7.0) (5.8)
Movement in net debt in the period 119.8 3.3
Net debt at beginning of period (284.4) (287.7)
Net debt at end of period (164.6) (284.4)
Notes to the Accounts
1 Turnover and segmental analysis
53 week period ended 52 week period ended
31 December 2004 26 December 2003
£m £m
Turnover
Funeral services 108.8 103.1
Crematoria 21.6 20.1
Pre-arranged funeral plans 5.3 5.8
135.7 129.0
Profit/ (loss) before taxation
Exceptional items
Before exceptional Administrative Other Total
items and goodwill income/ operating
amortisation (expenses) income
£m £m £m £m
53 week period ended 31 December 2004
Funeral services 33.7 0.8 - 34.5
Crematoria 11.5 0.4 - 11.9
Pre-arranged funeral plans 1.3 - 1.2 2.5
Head office (9.1) - - (9.1)
Operating profit/(loss) before goodwill
amortisation 37.4 1.2 1.2 39.8
Goodwill amortisation (5.9)
Operating profit 33.9
Net interest payable and similar charges (30.8)
Profit on ordinary activities before tax 3.1
52 week period ended 26 December 2003
Funeral services 30.0 0.5 - 30.5
Crematoria 9.1 (0.3) - 8.8
Pre-arranged funeral plans 1.1 - 1.0 2.1
Head office (8.2) (0.4) - (8.6)
Operating profit/(loss) before goodwill 32.0 (0.2) 1.0 32.8
amortisation
Goodwill amortisation (5.6)
Operating profit 27.2
Net interest payable and similar charges (30.7)
Loss on ordinary activities before tax (3.5)
2 Net interest payable
53 week period ended 52 week period
31 December ended
2004 26 December
2003
£m £m
Interest payable and similar charges
Class A and B secured notes 15.1 10.6
Bank loans settled 11 April 2003 - 4.2
Mezzanine bank loan 2.1 7.2
Loan notes 2.6 7.7
Other loans 0.1 0.1
Amortisation of issue costs 1.6 1.4
Unwinding of discount 0.7 0.5
Interest payable & similar charges before exceptional 22.2 31.7
items
Exceptional interest payable & similar charges
Premium on early redemption of mezzanine loan 4.0 -
Exceptional amortisation of deferred debt issue costs 6.1 -
Exceptional interest payable & similar charges 10.1 -
Total interest payable & similar charges 32.3 31.7
Interest receivable and similar income
Bank deposits (1.3) (0.9)
Debenture loan (0.2) (0.1)
Interest receivable and similar income (1.5) (1.0)
Net interest payable and similar charges 30.8 30.7
Following flotation, the Group redeemed the £40.0 million Mezzanine Loan and
£57.0 million of the £63.0 million principal of the Loan Notes 2013, incurring
an early redemption penalty of £4.0 million and writing-off £6.1 million of
deferred issue costs. The remaining £6.0 million principal of the Loan Notes
2013 were redeemed on 30 July 2004. Further details are set out in the operating
and financial review.
3 Tax
53 week period ended 52 week period ended
31 December 2004 26 December 2003
£m £m
The taxation charge for the period comprises:
Current tax: current period provision 0.2 -
Current tax: release of prior period provisions - (0.2)
0.2 (0.2)
Deferred tax: origination and reversal of timing differences 3.1 1.1
Deferred tax: adjustment relating to prior periods (0.6) (1.2)
2.7 (0.3)
4 Dividends
53 week period ended 52 week period ended
31 December 2004 26 December 2003
£m £m
Equity - Ordinary
Interim paid: 1.875p (2003: nil) per 7p share 1.5 -
Final proposed: 3.75p (2003: nil) per 7p share 3.0 -
4.5 -
5 Earnings per share
The calculation of basic earnings/ (loss) per ordinary share has been based on
the profit/ (loss) for the relevant period. The potential issue of new shares
pursuant to the Group's share option plans in the period would affect the
earnings per share by less than 0.1 pence per share if exercised.
On 31 March 2004, prior to admission to the Official List of the London Stock
Exchange, the Company undertook a restructuring of its existing share capital.
The weighted average number of shares used for the current period is based on
26,521,740 shares prior to admission and 80,000,000 shares in issue after
admission. The weighted average number of shares used for the comparative period
is 26,521,740.
Earnings Weighted average number Per share
of shares amount
£m Millions Pence
53 week period ended 31 December 2004 0.4 65.0 0.6
52 week period ended 26 December 2003 (3.5) 26.5 (13.2)
6 Cash at bank and in hand
Note 2004 2003
£m £m
Cash at bank and in hand 24.9 41.9
Represented by:
Operating cash 12.4 4.3
Cash for acquisitions (a) 7.2 10.4
Amounts set aside for mezzanine loan (b) - 5.8
Cash collateralised for loan notes (c) - 12.7
Amounts set aside for intercompany loan (d) 5.3 -
Amounts set aside for secured A and B notes -
(e) 8.7
24.9 41.9
(a) Under the terms of the Group's secured borrowings, this
amount is required to be retained in a separate account. This account may, in
normal circumstances, only be used for acquiring tangible fixed assets and
businesses (either trade and assets or share purchases). Included in this amount
is £1.2 million (2003: £1.0 million) relating to Recoveries, which may not be
used for one year following receipt and hence does not meet the definition of
cash in FRS 1, 'Cash Flow Statements'.
(b) This amount (save for circumstances where the directors
believed there may have been a risk of defaulting on the secured notes) could
only be used in paying the interest and principal due on the mezzanine loan.
This amount did not meet the definition of cash in FRS 1.
(c) This amount was subject to a charge in favour of the loan
notes 2012. This amount did not meet the definition of cash in FRS 1.
(d) This amount (save for circumstances where the directors
believe there may be a risk of defaulting on the secured notes) may only be used
in paying the interest and principal due on a loan between Dignity (2002)
Limited and Dignity Mezzco Limited, both of whom are wholly owned subsidiaries
of Dignity plc.
(e) This amount was required under the terms of the Group's
secured borrowings to be used to pay interest and principal on 31 December 2004
and 31 December 2003 respectively.
Movements in the amounts described in notes (a) as Recoveries, together with the
amounts described in notes (b) and (c), have been treated as 'transfers from /
(to) restricted bank accounts' in the cash flow statement and are reported
within 'capital expenditure and financial investment' as they do not meet the
definition of cash in FRS 1.
Movements in the amounts described in note (d) have been treated as 'management
of liquid resources' in the cash flow statement as they do not meet the
definition of cash in FRS 1, but will become available for the Group's use once
the intercompany payment has been made.
7 Reconciliation of movements in shareholders' funds
Share capital Share Other Profit and Total
premium reserves loss account
account
£m £m £m £m £m
Shareholders' funds as at 26 2.0 - (12.3) (68.1) (78.4)
December 2003
Profit for the period - - - 0.4 0.4
Dividends - - - (4.5) (4.5)
Share issue 3.6 111.6 - - 115.2
Effects of long term incentive plan - - 0.2 - 0.2
Shareholders' funds as at 31 5.6 111.6 (12.1) (72.2) 32.9
December 2004
8 Reconciliation of operating profit to net cash inflow from operating
activities
2004 2003
£m £m
Operating profit 33.9 27.2
Depreciation and amortisation charges 13.1 13.4
Profit on disposal of fixed assets (1.2) (0.3)
Decrease in provisions (0.4) (0.2)
(Increase)/ decrease in stocks (0.3) 0.5
Decrease in debtors (0.7) (0.9)
(Decrease)/ increase in creditors (0.3) 2.2
Net cash inflow from operating activities 44.1 41.9
Included within the operating cash flows shown above are exceptional items
(charged) and/ or credited to operating profit. None of these items have an
impact on the reported cash flows with the exception of the following:
2004 2003
£m £m
Expenses relating to refinancing - (0.5)
Recoveries 1.2 1.0
Net cash inflow from exceptional items 1.2 0.5
9 Returns on investments and servicing of finance
2004 2003
£m £m
Interest paid on Class A and B secured notes (22.4) (3.3)
Interest paid on other facilities (0.2) (0.1)
Payments in respect of swaps (1.0) (0.2)
Interest paid on bank loan repaid April 2003 - (4.4)
Interest paid on mezzanine loan (5.1) (2.2)
Interest paid on loan notes 2013 (6.6) -
Redemption penalty on mezzanine loan (4.0) -
Total interest paid (39.3) (10.2)
Interest received 1.6 1.1
Tax payable on interest payments - (0.9)
Issue costs of debt finance (0.1) (6.3)
Returns on investments and servicing of finance (37.8) (16.3)
As a result of the prior period ending on 26 December 2003, the Group's
cashflows in 2004 included expenditure such as interest and debt service
repayments in respect of the secured A and B notes (£9.1 million) and quarterly
operating cashflows that were paid in 2003 but are recognised as 2004 cashflows
for statutory purposes.
10 Securitisation
In accordance with the terms of the securitisation carried out in April 2003,
Dignity (2002) Limited (the holding company of those companies subject to the
securitisation), has today issued reports to the Rating Agencies (Fitch and
Standard & Poor's), the Security Trustee and the holders of the notes issued in
connection with the securitisation confirming compliance with the covenants
established under the securitisation.
Copies of this report are available at www.dignityfuneralsplc.co.uk.
11 Basis of preparation
The abridged accounts for the preliminary results for the 53 week period ended
31 December 2004 are unaudited. The financial information set out in the
announcement does not constitute the Group's statutory accounts for the periods
ended 31 December 2004 or 26 December 2003. The financial information for the 52
week period ended 26 December 2003 is derived from the statutory accounts for
that year which have been delivered to the Registrar of Companies. The auditors
reported on those accounts; their report was unqualified and did not contain a
statement under either Section 237 (2) or Section 237 (3) of the Companies Act
1985. The statutory accounts for the 53 week period ended 31 December 2004 have
been prepared on the basis of the accounting policies set out in the Group's
2003 financial statements and will be finalised on the basis of the financial
information presented by the directors in this preliminary announcement and be
delivered to the Registrar of Companies following the Company's Annual General
Meeting.
This information is provided by RNS
The company news service from the London Stock Exchange
Latest directors dealings
- 1 hour ago Rathbones Group
- 2 hours ago The Artisanal Spirits Company
- 2 hours ago Tritax Eurobox (EUR)
- 3 hours ago Videndum
- 3 hours ago Legal & General Group