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Dignity Annual Report and Accounts Dignity plc Annual Report & Accounts 2015 Dignity plc plc Dignity 4 King Edwards Court King Edwards Square 2015 Accounts & Report Annual Sutton Coldfield West Midlands B73 6AP www.dignityfuneralsplc.co.uk Delivering a strong and consistent performance Dignity plc ifc Annual Report & Accounts 2015 Overview About Dignity We are here to help people at one of the most difficult times in their lives. We do this with compassion, respect, openness and care. Our aim is to be the company everyone knows they can trust in their time of need. We are a FTSE 250 company listed on the London Stock Exchange, with over 3,000 employees serving families and local communities across the United Kingdom for generations. At 25 December 2015 Dignity owned 767 funeral locations and operated 39 crematoria in the United Kingdom. We continue to have a strong market presence in pre-arranged funeral plans, where people plan and pay for their funeral in advance. Contents Inside this report Overview Financial Statements 01 Key financial highlights Group Accounts 02 A proud history 65 Independent auditors’ report to the members of Dignity plc 03 A strong core business Overview 69 Consolidated income statement Pages ifc to 03 69 Consolidated statement of comprehensive income Strategic Report 70 Consolidated balance sheet 71 Consolidated statement of changes in equity 04 From the Chairman 72 Consolidated statement of cash flows 05 Chief Executive’s overview 73 Notes to the financial statements 06 Market overview Strategic report Pages 04 to 37 08 A strong and sustainable business Company Accounts 12 A consistent strategy and business model 109 Dignity plc Company balance sheet 14 Our key performance indicators 110 Notes to the Dignity plc financial statements 16 The client survey performance 17 Our summary performance in 2015 116 Financial record 18 Operating review Operating review Pages 18 to 23 24 Financial review Other Information 28 Principal risks and uncertainties 32 Corporate and social responsibility 118 Shareholder information 119 Contact details and advisers Governance 120 Financial calendar Financial review Pages 24 to 27 38 Chairman’s introduction to governance 39 Our governance structure 40 Board of Directors 42 Directors’ statement on corporate governance Guide to icons 46 Audit Committee report Corporate responsibility 49 Nomination Committee report Pages 32 to 37 We have used icons throughout this Annual Report 50 Report on Directors’ remuneration to guide you to further reading, links to other relevant 63 Directors’ report information or to find out more online. Acknowledgements Dignity would like to thank all those who participated in producing this Annual Report, particularly the members Governance of staff for their contributions. Pages 38 to 64 Designed & produced by Bexon Woodhouse Main photography by Bexon Woodhouse www.bexonwoodhouse.com Front cover: Stay informed Printed in the UK by CPI Colour, a certified CarbonNeutral® Dignity online: Jo Tolley, Funeral Manager at printing company, using vegetable based inks and water A V Band Funeral Directors based sealants. The printer and paper manufacturing mill are To find out more about Dignity and to view and in Worcester. download a pdf version of this Annual Report: both certified with ISO 14001 Environmental Management www.dignityfuneralsplc.co.uk systems standards and both are Forest Stewardship Council® (FSC®) certified. Dignity plc Annual Report & Accounts 2015 01 Key financial highlights A strong and consistent financial performance. Overview +14% +16% +34% Revenue up 14% Underlying operating profit Underlying earnings per share up to £305.3 million up 16% to £98.7 million 34% to 114.8 pence per share Current period financial highlights 2015 2014 Increase per cent Report Strategic Revenue (£million) 305.3 268.9 14 Underlying operating profit(a) (£million) 98.7 84.9 16 Underlying profit before tax(a) (£million) 72.2 58.5 23 Underlying earnings per share(b) (pence) 114.8 85.8 34 Cash generated from operations(c) (£million) 125.2 104.4 20 Governance Operating profit (£million) 95.5 82.9 15 Profit/(loss) before tax(d) (£million) 69.0 (67.7) n/a Basic earnings per share(d) (pence) 115.2 (104.0) n/a Interim dividend paid in the period(e) (pence) 7.14 6.49 10 Final dividend paid in the period(f ) (pence) 13.01 11.83 10 Return of Cash (£million) – 64.4 n/a Statements Financial Information Other Deaths 588,000 550,000 7 (a) Underlying profit is calculated as profit (or loss) excluding profit (or loss) on sale of fixed assets, external transaction costs and exceptional items. (b) Underlying earnings per share is calculated as profit (or loss) on ordinary activities after taxation, before profit (or loss) on sale of fixed assets and external transaction costs and exceptional items (all net of tax), divided by the weighted average number of Ordinary Shares in issue in the period. (c) Cash generated from operations excludes external transaction costs and (in 2014) pension contributions made from the proceeds of debt issues. (d) Non-cash charges resulting from the refinancing in 2014 led to a reported statutory loss in the comparative period. (e) Interim dividend represents the interim dividend that was declared and paid in the period out of earnings generated in the same period. (f) The final dividend represents the final dividend that was declared and paid in the period relating to the earnings generated in the previous period. Revenue (£m) Underlying operating profit (£m) Underlying earnings per share (pence) 325 100 98.7 120 300 305.3 90 110 114.8 275 80 100 250 268.9 84.9 256.7 78.4 90 225 70 229.6 69.4 80 85.8 200 60 64.5 210.1 70 175 72.1 50 150 60 62.8 125 40 50 55.1 100 30 40 30 75 20 50 20 10 25 10 0 0 0 2011 2012 2013 2014 2015 2011 2012 2013 2014 2015 2011 2012 2013 2014 2015 Links Find out more about our strategy and business model: p.12 and p.13 Find out more about our business operations, actions and progress: p.18 to p.23 Find out more about our financial performance: p.24 to p.27 Dignity plc 02 Annual Report & Accounts 2015 Overview A proud history We have a rich and proud heritage and many of our businesses have been serving their local communities for generations. Our oldest funeral location was established in 1812 and our oldest crematorium in 1903. 1812 1950 George S Munn & Co, Glasgow T J Davies & Son, Newport George S Munn & Co is Dignity’s oldest funeral directors and was established in 1812. Thomas Davies, grandfather of Operations Director, Andrew Davies, established his business in 1950. Seaford & Newhaven Funeral Service, East Sussex 1840 C Morling Ltd, a building company whose carpenters had made coffins for over Francis Chappell & Sons, London 100 years, opened an office in Seaford as its funeral business. Seaford Funeral Service Francis Chappell & Sons commemorated their 175th anniversary in 2015 having was developed by the Goacher family and Lee Goacher is Dignity’s Regional Manager opened their first funeral location on Deptford High Street in 1840. The business for the South East. now has branches across south east London and Kent. 1870 1994 Dignity Caring Funeral Services Relph Funeral Service, Middlesbrough Dignity was created in 1994 through the merger of Plantsbrook Group and Great In 1870, Joseph Relph established Middlesbrough’s oldest funeral business. It has Southern Group. been entrusted with the funeral arrangements of many prominent local figures and no less than four Roman Catholic Bishops. 2008 1880 Northern Ireland J H Kenyon,® London Dignity acquired six funeral locations in Northern Ireland. Established by James H Kenyonthe business has conducted funerals for the Royal Family, politicians and other prominent figures. 2013 Yew Holdings Limited 1884 Dignity acquired 40 funeral locations and two crematoria from Yew Holdings Limited Frederick W Paine, London in 2013. Charles Paine opened his first funeral location in New Malden in 1884 and ten years later the business passed to his son, Frederick W Paine. 2015 Laurel Funerals 1890 Dignity acquired 36 funeral locations from Laurel Funerals. A V Band, Worcester A V Band was established in 1890 but relocated to the first purpose-built funeral location in Worcestershire in 1938. 1903 Dignitytoday Birmingham Crematorium We maintain the heritage of each of these funeral businesses, employing local The oldest crematorium operated by Dignity and when it opened in 1903 was one people who understand the traditions of their community and are committed to of only nine such facilities in the UK. providing the highest standards of service. Dignity plc Annual Report & Accounts 2015 03 A strong core business Today, Dignity is one of the leading providers of funeral related services in the UK with strong business foundations. As an industry leader, we strive to set the highest standards of service, facilities and care, ensuring we are well positioned to meet the needs of our clients for generations to come. Overview Dignity’s operations are focused and managed across Links three main areas, namely Funeral services, Crematoria Find out more about our strategy and business and Pre-arranged funeral plans. model: p.12and p.13 Find out more about our business operations, actions and progress: p.18 to p.23 Funeral services Crematoria Pre-arranged funeral plans Strategic Report Strategic Governance We are a major provider of funeral We are the largest single operator of We are one of the UK’s leading providers services in the UK and we strive to set the crematoria in Britain with a growing of pre-arranged funeral plans and we highest standards of service and care. portfolio of well-established and state continue to strengthen our business in of the art crematoria that meet the needs this growing market.
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