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Dignity shareholders oust chairman in win for top investor Phoenix

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Yadarisa Shabong
·2-min read
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By Yadarisa Shabong

(Reuters) - Shareholders in funeral services company Dignity Plc on Thursday ousted Chairman Clive Whiley in the culmination of weeks of opposition by leading shareholder Phoenix Asset Management over the handling of a strategic review.

At a meeting called by Phoenix, shareholders also backed the appointment of Phoenix's Chief Investment Officer Gary Channon as an executive director, Dignity said.

Shares in the London-listed company, which owns around 800 funeral locations and 46 crematoria in Britain, rose by as much as 5% to 676 pence after the news.

Dignity's Dean Moore, the meeting's acting chair, said he and two other independent directors had resigned after Phoenix turned down a proposal to allow Whiley to continue as a non-executive chairman and appoint Channon as interim CEO.

The fund, which holds nearly 30% of Dignity, called for the vote in early March, citing "very serious" issues in Dignity's prepaid funerals business.

"We are delighted with the result ... we now have to show our ourselves worthy of it and we will get straight to work," Phoenix said.

In a letter to Dignity shareholders last week, the fund promised to unveil its plan for the business in June if its motions were passed.

While raising concerns about Dignity's "large borrowings in the form of securitised bonds," Phoenix suggested the company should retain a major holding, but list the crematoria business separately to raise capital.

"Much will depend on underlying cashflow, the views of the bondholders and future moves by the CMA (Competition Markets Authority)," Peel Hunt analysts said in a note.

Dignity, which has been looking for a new boss and finance chief, has been carrying out a strategic review since Whiley's appointment in 2019.

It is dealing with an investigation by the CMA over concerns about transparency in the funeral industry and will also have to adapt to new regulations next year that could affect the prepaid funeral unit.

Dignity said about 55% of votes cast backed Whiley's removal from the board and about 61% voted for Channon's appointment.

(Reporting by Yadarisa Shabong and Pushkala Aripaka in Bengaluru; Editing by Shinjini Ganguli and Barbara Lewis)