Sir Peter Wood has an estimated £860million fortune from his career in property and insurance. He lives in five houses with six children and five grandchildren. There is also a sixth child on the way. He also enjoys tennis and personal training three days per week.
Despite the expanding family and jet-setting to Palm Beach and Boston, the great grandfather founder of esure & Direct Line does not intend to slow down.
Instead, the surprising bid by £281 million to take over Dignity, Britain’s largest, but most troubled, funerals business, was made by the 76-year old tycoon.
He says that he could have moved 20-30 years ago when he spoke to him in an interview in his London townhouse about his decision to bid on Dignity. “Warren Buffett, is he 92?” Charlie Munger is 99. They are still going. It’s just a matter of keeping going. I have done more than half a million [dollars] in property transactions. It’s risky to take a chance and try it.”
Wood is part of a consortium with Gary Channon, former boss of Dignity, chief investment officer at Phoenix Asset Management and largest shareholder of Dignity, whom he has known for 12 years. In January Dignity’s board recommended to shareholders a sweetened bid of 550p per share in cash. This bid included debt and valued Dignity at PS789 millions. Dignity, which was founded in 1812, is being taken private by the consortium to regain its financial health.
Wood and SPWOne is his Epsom-registered investment vehicle. It retains a tight-knit team, which helped him build his insurance empire. This includes a former general counsel at Esure and his driver of 34 years.
He intends to use the “magical marketing strategy” behind the Michael Winner and Sheilas’ Wheels insurance ads to sell pre-paid funeral plans. “I’ve created quite a few brands. I won’most irritating advertisement’ every year, which was something I was proud of.
Wood acknowledged that the takeover is not yet complete, and in fact the process was halted last week while they await approval by the Financial Conduct Authority. However, preparations are being made, including ideas for television ads. “I might get horses [pulling hearse] talking together. “This must have been expensive?” ‘Oh no. He purchased a funeral plan. Or something else. He says, “It’s just that it has to be sensitive to subject.”
After a review of the Treasury’s long-standing concerns about the market, the FCA started regulating pre-paid funeral markets last July. It was really a shoot-out, so thank goodness they did regulate it. There were complete cowboys there. It was shameful that they were allowed. The regulation was welcomed by me. It is a shame that it has not been implemented a few years back.
A number of companies have been affected by the regulation. This has provided an opportunity for Dignity to consolidate its pre-paid market share as it is the industry leader along with Co-op Funeralcare. Liberum analysts stated that there are currently 26 million British over-50s, of which only 7% have plans. This is in addition to the supportive background of an ageing population.
Liberum is helping Channon’s Castelnau investment company listed in London, which has shareholders including SPWOne, Mike Ashley, and Frasers Group, to raise equity to finance the deal.
Wood is acutely aware of the challenges of turning around Dignity. Wood, who is based in Sutton Coldfield near Birmingham, manages 46 crematoriums, 725 branches, and 388,000 pre-paid funeral plan plans. However, the share price has been hampered by rising costs, increased competition, and volatile death rates since the pandemic.
It’s not an easy task. It was underinvested. It was not properly managed. Gary [Channon] gave it a try and found it to be much bigger than he had thought,” he said, adding that it has been poorly managed. It was a buy-buy, buy-buy, buy, and put the price up [strategy]. Acquisition was the only way to grow. Organic growth was negative.”
He has criticized Dignity’s management of funeral parlours. “Those funeral parlours who interact with the head office seem to do the most well. Therefore, I believe the first thing that needs to be changed is from head office to support.
He says Dignity needs data analysis and call centres that are efficient. Wood says Dignity’s size and crematorium estate help protect it from any new competition.
He believes Dignity is more likely to be revived if it is not listed on the London Stock Exchange. The private world is better than the public because it doesn’t have this obsession with share prices. Another benefit is that you can reward people who are successful if they do well. I was one of 42 multi-millionaires at esure. This is possible because of ISS and Glass Lewis (proxy shareholder advisers, governance groups).
“What bothers me most is that these people, who have been chief executives of companies for six, seven, or whatever number of years, do an awful job. . . You will be well-paid. We seem to reward incompetence, but we don’t reward enough success for truly successful businesses.”
Wood plans to keep Kate Davidson (37), Dignity’s newly appointed chief executive and an ally to Channon in place and to maintain its base at Sutton Coldfield. She’s done enough running every day. We need to support her.”
Wood has a history in branding and is able to turn around a struggling company. It’s unusual, but it’s not something I worry about. We have the numbers. We know what we can accomplish. As we start to get it in shape, the numbers won’t appeal for long. I would like to meet the people who can do it if we don’t have the willpower.
It will take time to turn the tide and magic marketing is not an instant fix. You can’t simply raise the prices and expect a flood of new business. It is important to market it. You must also get the infrastructure in place. We are not going to launch an enormous advertising campaign and then suddenly lose our heads. That’s what I’ve seen time and again.”
Artemis Investment Management is Dignity’s third largest shareholder, with an approximately 9 percent stake. Ravenscroft Group also supports the consortium, although they do not own nearly 1%. However, if they fail to get enough votes and close the deal, Wood is worried about Dignity’s future.
“They will need to raise capital, and the logical method I see to do so will be a rights-issue. It is often discounted on the price, as we all know.