* Dignity cancels 'uneconomical' contracts with five
partners
* Says 21-week profit slightly lower to 30.7 mln pounds
* Sets new strategy including selling through branches
rather than
partners
(Recast, adds background)
June 23 (Reuters) - British funeral services firm Dignity
has cancelled contracts with telephone marketing firms
and will instead focus on selling directly through branches, it
said on Wednesday, as UK authorities tighten rules on the
sector.
Dignity, which owns around 800 funeral locations and 46
crematoria in Britain, said it has cancelled contracts with five
of its commission-based telephony partners after an assessment
showed they were not economical and failed to uphold its
standards.
The funeral sector in Britain in the past year has been
setting itself up for new regulations around pricing and prepaid
funerals, while seeing an unprecedented rise in funerals because
of the pandemic.
The UK competition watchdog last week gave funeral companies
until September to standardise prices and has since banned
directors from soliciting businesses through coroner and police
contracts. Another watchdog is set to lay out fresh regulations
next year on prepaid funerals.
As part of the strategy, Dignity will also focus on
competitive pricing and improved branding, while lowering its
cost of acquisition, and investing more in its facilities, among
others.
The company, however, did not disclose plans to list its
crematoria business separately to raise capital, a suggestion
that its largest shareholder Phoenix Management brought up
during a dispute with the prior management that led to the
ousting of its prior chairman and the election of Gary Channon.
Dignity said its underlying operating profit for the
21-week-period ending May 21 was 30.7 million pounds ($42.87
million), slightly lower than last year.
The company also said its average revenue per funeral has
risen in April and May from the first quarter as more people opt
for full-service funerals on easing restrictions.
Shares rose 9.4% to 699 pence by 1102 GMT.
The contract cancellations will lower revenue at the funeral
plan division by 35% for the current year, the company said.
($1 = 0.7161 pounds)
(Reporting by Muvija M and Yadarisa Shabong in Bengaluru;
Editing by Shounak Dasgupta, Uttaresh.V and Chizu Nomiyama)
