31st Mar 2021 10:56
(Alliance News) - Phoenix Asset Management Partners on Wednesday has responded to Dignity PLC's statement on Tuesday, saying it has called a general meeting as it believes it can "no longer trust" Clive Whiley as Dignity executive chair.
Funeral services and prepaid funeral plans provider Dignity said on Tuesday the planned move to oust Whiley at the meeting on April 22 was "wholly unnecessary". It added its three independent board directors will resign if Phoenix succeeds in replacing Whiley with its own founder and chief investment officer, Gary Channon.
However Phoenix, Dignity's biggest shareholder, said in its response on Wednesday that Channon does not seek a long-term position on the Dignity board, and will fall back to a supportive role once the group believes it has put in place the "right leadership team".
Phoenix added it has uncovered some "serious" issues regarding Dignity's prepaid funeral plan business, which is referred to as pre-need, and was unhappy at Whiley's reactions.
"We gathered the relevant information and sent it to Clive ahead of the budgeting process and finalisation of the annual results. In our view, his subsequent actions in dealing with the matter, internally and externally, left us no choice but to seek his removal as a director," it added.
Dignity said on Tuesday the behaviour of Phoenix, which has a stake of around 29.9% in the firm, "has led all three of the independent directors to form the view that Phoenix is not acting in the best interests of shareholders as a whole, but is instead driven primarily by its own self-interest".
This comes after Dignity's annual results earlier this month showed it swung to a GBP19.6 million loss, despite the pandemic resulting in Britain's annual death toll soaring to its highest level for more than 100 years.
It said coronavirus restrictions had affected its services, while extra expenses such as PPE measures and additional temporary staff costs also put pressure on its earnings.
Dignity also said it has had to contend with a UK Competition & Markets Authority investigation into the funeral sector, which began in 2018.
Last December, the CMA concluded that funerals were costing consumers too much, and made a series of recommendations. The group had been undertaking a review as part of a turnaround, which is set to conclude in the second quarter of 2021.
Shares in Dignity were up 1.3% at 629.00 pence in London on Wednesday.
By Zoe Wickens; [email protected]
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