Company Registration No. 04569346

DIGNITY GROUP HOLDINGS LIMITED

REPORT AND FINANCIAL STATEMENTS

FOR THE PERIOD ENDED 26 DECEMBER 2025

WEDNESDAY
AF365225
A15 03/06/2026 #116
COMPANIES HOUSE

DIGNITY GROUP HOLDINGS LIMITED

STRATEGIC REPORT

FOR THE PERIOD ENDED 26 DECEMBER 2025

The Directors present their Strategic Report for Dignity Group Holdings Limited ('the Company') and its subsidiaries (together 'the Group') for the 52 week period ended 26 December 2025. The comparative period is for the 52 week period ended 27 December 2024.

Business Review and Future Developments

The Group's principal activity is the provision of end-of-life services, encompassing funerals, crematoria, prepaid funeral plans and, from 31 January 2025, legal services. The Company's principal activity is that of a holding company. The Directors do not anticipate any changes to the nature of the Group's or the Company's principal activities.

Business update

The Group remained focused on its vision to become the UK's leading end-of-life company, with the aim of supporting one in three people to plan for and deal with death. Its strategy focuses on expanding its service offering, modernising the operating model and strengthening financial resilience. During the year, the Group made significant progress against these objectives. It broadened its proposition to meet changing customer needs, re-launching the Simplicity brand with a new direct cremation funeral plan product to compete in the fastest-growing segment of the market, reflecting the Group's commitment to affordability and choice.

The acquisition of Farewill, completed on 31 January 2025, marked a major step in expanding the Group's services. Farewill strengthens the Group's position in wills and probate and enhances its digital capabilities, enabling customers to access online will-writing and estate administration alongside funeral arrangements. In addition, the launch of Dignity Legal Services in June 2025 brought probate in-house, enhancing the end-of-life support services the Group is able to offer to families.

The Group continued to invest in its crematoria network, growing market share and introducing new memorial ranges and improving the overall memorial offering. At the same time, investment in funeral branches focused on improving local presence and customer experience, ensuring the Group remains competitive in a market increasingly influenced by digital and low-cost alternatives. The Group also implemented a new back-of-house platform in the funeral business, enhancing transparency and compliance while supporting the highest standards of care and providing peace of mind for families. These developments will help the Group to serve more families locally while driving sustainable growth.

The Group significantly improved its financial resilience, reducing debt by £73.1m. The reduction in debt was achieved through:

Shareholder loan repayment to Phoenix UK Fund Limited of £56.5m (£50.0m nominal) comprising £36.1m from the proceeds of the sale and leaseback of six crematoria in Q1 2025, transfer of six plots of land valued at £3.6m, a payment of £4.5m in November 2025 and a debt waiver for the remainder.
Shareholder loan repayment of £1.1m to SPWOne from the sale and leaseback proceeds.
Shareholder loan repayment of £2.5m to Castelnau Group Ltd in November 2025.
The repurchase of £17.2m of Class A Notes for £16.5m in July 2025.
The scheduled Class A Note repayment of £2.5m on 30 June 2025.

Further details for these loans can be seen within note 25(f).

This was offset by the introduction of £9.5m of loan notes with a fair value of £6.7m including accrued interest, from Yellow (SPC) Bidco Limited to facilitate the acquisition of Farewill Ltd (see Note 22 for further details of this loan). Further details of the acquisition are provided in Note 37 to the accounts.

Supported by pre-tax surplus distributions of £60m from both the Age UK Funeral Trust and National Funeral Trust in November 2025, the Group repaid the remaining £39.6m Class A Notes on 31 December 2025, taking the total reduction in debt from £73.1m on 26th December 2025 to £112.7m at 31 December 2025. (see section on Funeral Plan Trust and Notes 21, 22, 25(d), 25(e) and 31 for further details).

DIGNITY GROUP HOLDINGS LIMITED

STRATEGIC REPORT

FOR THE PERIOD ENDED 26 DECEMBER 2025

Financial Performance

The Group delivered a resilient performance in what was a further year of strategy evolution. Funeral volumes were 66,900 compared to 69,400 in the prior year, reflecting some market share loss following closure of 90 branches that did not meet the Group's financial objectives in the prior year. This was offset by effective pricing strategies and a continued focus on service quality, with funeral revenue up 0.5% versus the prior year.

The crematoria business performed strongly, with volumes increasing to 73,700 cremations representing 5.3% growth underpinned by the strength of the network and customer proposition. This growth helped mitigate pressure in the funeral division and contributed positively to overall profitability.

Prepaid funeral plan sales volumes increased slightly by 0.1% year on year, reflecting steady consumer confidence in the Group's brands. Performance also indicated that the Group had been missing growth in the expanding direct cremation segment, which was addressed through the late year relaunch of the Simplicity brand and its new direct cremation plan.

EBITDA was £43.6m compared to £43.9m in the prior year, remaining broadly stable despite inflationary pressures, particularly from wage uplifts, national insurance costs, and increased rental costs of £3.1m following the sale and leaseback of six crematoria. Robust cost discipline supported margins and enabled ongoing investment in transformation initiatives.

The repayment in full of the A Notes post-year end will reduce annual debt service costs by £4.9m, from £21.6m to £16.7m until 2035, and create significant covenant headroom, providing a strong foundation for sustainable growth.

Key Performance Indicators (KPIs)

The Group's KPIs provide a clear view of progress against strategic objectives, combining financial and operational measures to monitor performance, support decision-making, and ensure sustainable long-term growth.

Financial KPIs

Metric	2025	2024 Restated
Revenue	£328.8m	£326.3m
Net Debt	(£418.7)m	(£490.0)m
Cash Generated From/(Used In) Operation	£5.6m	(£13.1)m
Trading Group Cash	£25.3m	£51.4m
EBITDA – Trading Group	£43.6m	£43.9m
EBITDA – Securitisation Group (1)	£42.7m	£42.8m

(1) Monitored by the Board for covenant compliance.

Non-Financial KPIs

Metric	2025	2024
Estimated deaths in Britain	629,100	624,400
Cremations performed	73,700	70,000
Funerals performed	66,900	69,400
Active pre-arranged funeral plans	322,000	334,000

Net debt: The Group has net debt of £418.7m (2024: £490.0m) at the balance sheet date. See Notes 21, 22, 25(d), 25(e) and 31 for further details. This includes a loan from Yellow (SPC) Bidco Limited used to acquire the shares in Farewill Ltd.

DIGNITY GROUP HOLDINGS LIMITED

STRATEGIC REPORT

FOR THE PERIOD ENDED 26 DECEMBER 2025

Funeral Plans Trusts: The Group's Funeral Plan Trusts, including the Farewill Funeral Plans Limited Trust acquired through the acquisition of Farewill, remain well capitalised, based on FCA-required solvency assessments. The valuations reflect expected future cost of performing funerals and not the actual cost. Full reports are available at https://www.dignityfunerals.co.uk/funeral-plans/solvency-assessment-report/ and at https://www.farewill.com/funerals/.

The acquisition of the Farewill Funeral Plans Limited Trust added £1.3m of trust's assets to the Group at the end of the year. Surplus distributions of £60m were received in November 2025 (£30m from The National Funeral Trust and £30m from Age UK Funeral Plan Trust). Trust assets total £847.9m (2024: £899.4m), invested across equities, bonds, funds and private equity. Strategic asset allocation was reviewed to achieve target returns with reduced volatility. See link to the solvency assessment report above for any further details.

Contract and refund liabilities were £1,315.4m (2024 restated: £1,309.7m), reflecting new plan sales £69.4m (2024: 57.0m), financing £53.2m (2024: £54.5m) and releases on delivery or cancellation £116.9m (2024: 118.9m). See Note 21 for details. Contract and refund liabilities mentioned above exclude At-need contract liabilities (Note 20).

Rescue Plans:

Until 2024, Dignity supported customers whose previous plan providers were unable to meet FCA requirements by facilitating the transfer of their plans onto Dignity funeral plans. A £0.7m charge (2024: £3.5m) was recognised, primarily due to onerous contract provisions where some plans may be loss-making. £2.3m was received from ceding Trusts during the year. The Group received £6m from Castelnau Group in relation to the guarantee provided on the rescue assets. This amount has been recognised as deferred income within the balance sheet as at 26 December 2025. See Note 1 for details.

Financial Covenants: The Group's primary covenant requires EBITDA to debt service in the Securitisation Group to be at least 1.5x. This test was met throughout the year.

EBITDA for this calculation can be reconciled to the Group's statutory profit as follows:

£m	2025	2024 Restated
EBITDA per covenant: Securitisation Group	42.7	42.8
Add: Entities outside Securitisation Group	1.3	1.5
Less: Non-cash items (1)	(0.4)	(0.4)
EBITDA – Trading Group	43.6	43.9
Less: Depreciation & amortisation	(29.1)	(28.2)
Less: Exceptional costs (2)	(2.1)	(29.1)
Adjustment for the impact of Trust consolidation and Section 23 of FRS 102 (Revenue deferred until provision of the funeral services)	9.1	13.9
Adjustment for the impact of Section 20 of FRS 102 (Leases)	13.8	11.9
Statutory operating profit/(loss)	35.3	12.4

(1) Adjustments for pensions to cash basis. (2) Includes transaction costs, trust plan costs, restructuring, impairments, profit on asset sales, and other exceptional items.

Events after the reporting period

On 31 December 2025 a prepayment of £37.6m was made, alongside the standing payment of £1.8m, to fully repay the Class A notes. See Note 36 for further details.

Outlook

The Group enters 2026 with a clear strategy, an enhanced platform for growth and a stronger balance sheet. Strategic priorities for the year ahead focus on growing Simplicity and legal services, modernising operations and strengthening the estate network. With reduced leverage and lower debt service costs, the Group is well positioned to invest in service innovation and operational efficiency, supporting sustainable long-term growth in a changing market.

DIGNITY GROUP HOLDINGS LIMITED
STRATEGIC REPORT
FOR THE PERIOD ENDED 26 DECEMBER 2025

Impact of Geopolitics

The Directors remain alert to global geopolitical developments, including the evolving situation in the Middle East, and monitor these as part of the regular risk and performance review cycle.

Restatement of Prior Year Figures

Rescue provision

During the year, the Group identified an error in the rescue provision model whereby instalments paid by customers transferring from ceding trusts since 2023 were not recognised, resulting in the provision being incorrectly increased during 2023 and 2024 when it should have reduced for deaths and cancellations. This led to the onerous element of the provision being overstated by £4.6m and the related deferred tax asset understated by £1.2m as at 27 December 2024.

Deferred Income

The Group identified an error in the deferred income models whereby the significant financing component for customers paying monthly was calculated using interest rate applicable at each payment date rather than the rate prevailing when the plan holder first took out the plan, as required by FRS 102 Section 11. This resulted in deferred income being understated by £18.1m and the related deferred tax asset understated by £4.5m as at 27 December 2024.

The errors were corrected retrospectively, with comparative figures restated and the opening balance sheet for the earliest comparative period adjusted. More details are presented in Note 39.

The restatements did not affect the Group's cash position.

Principal Risks and Uncertainties

Risks and Risk Management

The Group operates a robust governance structure with adequate internal controls, with a small number of further enhancements planned, and a three-lines-of-defence risk management and assurance model, ensuring clear responsibilities and reducing unexpected events. This framework manages risk exposure and supports strategic objectives. The risk management process provides a structured approach to identify, assess and manage risks both positive and negative and enables the Risk Committee to review a balanced assessment of its effectiveness.

Responsibilities and Actions

Board and Risk Committee

The Board oversees risk management and mitigation. Through the Risk Committee, it assesses principal and emerging risks, supported by the Risk and Compliance Director and second-line Risk Function working with first-line risk owners. The Committee, comprising at least two independent Non-Executive advises on risk matters, recommends risk appetite and limits, and promotes a strong risk culture. Membership is detailed on page 13.

Risk Process

Risk management is an ongoing process with regular review and feedback. The Risk Committee meets at least four times a year to consider principal risks for Board approval. Executive Directors and senior leaders identify and assess risks under the Enterprise-wide Risk Management Framework (ERM), with findings reviewed by experts and recorded in the risk register. Risks are evaluated for impact and likelihood, and mitigating actions applied where possible. The Group continually monitors risk status.

Review and Internal Audit

Each risk is linked to relevant policies and procedures. The Risk function provides oversight and, when required, conducts detailed reviews, supported by Internal Audit to ensure controls and policies operate effectively. Principal risks, detailed in the table below, are underpinned by the ERM Framework, which safeguards assets and reputation, ensures compliance, and supports delivery of strategic objectives.

DIGNITY GROUP HOLDINGS LIMITED

STRATEGIC REPORT

FOR THE PERIOD ENDED 26 DECEMBER 2025

The risk management process provides a structured approach to identify, assess and manage risks—both positive and negative—impacting the Group's strategy and operations; and enables the Risk Committee to review a clear, balanced assessment of its effectiveness.

Risk Description and Impact	Mitigating Activities	Changes since 2024 report
Market Shift
Market shifting to Direct Cremation, which puts downward pressure on margins (in crematoria, funerals and funeral plans), and lowers barriers to entry facilitating the entry of online players, who could potentially take market share and lead Dignity to underutilising its Funeral Director network.	Following the acquisition of Farewill, the Group leveraged its technology to launch Funeral Plans under the Simplicity brand—an online and telephone-only service for unattended funerals and plans.

The Group is well-positioned to benefit from the growing demand for direct cremations through its national crematoria network. Increasing these volumes is a key strategic priority and a hedge against further market shifts, alongside local marketing efforts to drive attended funerals via branches and educate customers on their benefits compared to direct cremation. | No change |
| Competitive Threats
There is a risk that an increase in competition from new entrants or existing participants leads to a drop in revenue. The impact is a reduction in volume and revenue. | As a vertically integrated business with multiple family touchpoints, Dignity is investing in care standards, facilities, and its estate, supported by competitive pricing, new products, cultural change, and refreshed branding to grow local market share.

The launch of Simplicity and Dignity Legal Services, underpinned by Farewill's acquisition, accelerates long-term growth by expanding relevant products and enhancing digital capability. | No change |
| Funding & Liquidity
There is a risk that Dignity fails to manage its financial controls and resources. The impact could cause liquidity issues or debt non-compliance. | Net debt has been significantly reduced increasing covenant headroom. Latest Solvency Assessment Reports for Dignity trusts demonstrate solvency in excess of the regulatory requirements. See Note 36 for further details. | Decreased |
| People - Capability & Bandwidth
There is a risk that Dignity fails to attract and retain its talent. The impact of this may be reduced ability to effectively and efficiently run the business. | The Group's organisation design clearly defines the roles and skills required to deliver its strategic objectives. In 2025, several key executive appointments strengthened leadership capability. The Board remains committed to providing fair and competitive pay that reflects the responsibilities of each role. It will continue to communicate openly with colleagues to keep them informed and engaged | Decreased |

DIGNITY GROUP HOLDINGS LIMITED

STRATEGIC REPORT

FOR THE PERIOD ENDED 26 DECEMBER 2025

Risk Description and Impact (continued)	Mitigating Activities	Changes since 2024 report
Workforce Welfare
There is a risk that Dignity does not effectively manage colleague welfare, the impact of which could lead to lower morale, higher turnover, and increased sickness.	The Group supports colleague wellbeing through trained mental health first aiders and wellbeing champions. Additional assistance is provided via the Employee Assistance Programme and the Employee Welfare Trust, which offers support to those in need.	No change
Culture and Change Management
There is a risk that Dignity fails to effectively manage, or co-ordinate changes to the business model effectively. The impact of which could result in poorly designed products and services, a reduction in product sales, and lower profitability leading to poor customer outcomes, increased complaint volumes and an undermining of the firm's culture.	In 2025, the Group implemented a new funerals operating platform, upgraded its website and telephony systems, embedded revised procedures, and complied with Scottish regulations. The Farewill acquisition and new services strengthened the business, supported by enhanced oversight and improved communications. A new online tool will be introduced in 2026 to further streamline engagement and processes.	Decreased
Technology Reliability
There is a risk that Dignity fails to manage digital infrastructure, the impact of which could cause outages, overspending, or poor performance.	System availability is closely monitored, supported by an agreed roadmap for technology enhancements and capital investment. Significant progress was achieved in 2025 with the delivery of new platforms for the funeral back of house, Simplicity Cremations, and the re-platforming of funeral branch websites	No change
Regulation & Changing Backdrop
Breach of laws, regulations, or standards could lead to scrutiny or enforcement.	A mature three-lines-of-defence model underpins compliance, supported by rigorous monitoring and assurance processes. The Group continues to progress regulatory initiatives, including implementation of Scottish Funeral Director requirements, delivery of the Mercury Abatement Programme and adherence to ECCTA requirements to strengthen Dignity's fraud risk profile.	No change
Data Security & Cyber Risk
Failure to prevent cyber threats or the misuse of data, which could cause financial, regulatory and reputational damage.	The Group continues to invest in robust security controls, processes and technology to safeguard data and systems. Information security is managed in line with ISO27001 principles, supported by regular audits, while appropriate cyber insurance is maintained to mitigate residual risk.	No change

DIGNITY GROUP HOLDINGS LIMITED

STRATEGIC REPORT

FOR THE PERIOD ENDED 26 DECEMBER 2025

Risk Description and Impact (continued)	Mitigating Activities	Changes since 2024 report
Products and Customer Support
Products and services may not meet customer needs. The impact of poor product could lead to poorer customer outcomes.	The Group maintains strong product governance aligned with Consumer Duty, including regular fair value assessments. Customer outcomes are closely monitored through complaint reviews, mystery shopping, and targeted support for vulnerable customers. These measures are reviewed monthly by the Executive team and quarterly by the Consumer Duty Committee and Risk Committee to ensure products and services consistently deliver good customer outcomes.	No change
Reputational risk
The organisation's reputation could be materially damaged through the poor/ inconsistent care of the deceased, the impact of which causes customer distress	The business has implemented a strengthened and standardised national approach to the care of the deceased. This approach is supported by clear ownership, mandatory training, operational controls, including operational audits and technology (Firehawk) and back of house improvements, and continuous monitoring.
A core control is the national roll out of the Care of the Deceased Standard Operating Procedure (SOP), which establishes a consistent, auditable framework for how colleagues receive, handle, prepare, present, and safeguard the deceased. This SOP has been embedded across the business and is supported by annual refresher training and structured audits, ensuring colleagues follow a single, high quality standard in every location	No change
Client Money
Misuse, misappropriation, or loss due to financial mismanagement, operational failures, or dishonesty, which could result in financial loss to clients and reputational damage to the firm.	Robust Controls are in place to safeguard client funds, including segregation from operational accounts, regular reconciliations, meticulous record-keeping, dual authorisation for payments, documented policies, and ongoing staff training to ensure compliance and best practice.	New risk applicable to Farewill Legal Services Limited (Trading as Dignity Legal services) only.
Health & Safety
Inadequate practices could harm employees, contractors, or visitors across diverse operational environments.	The company maintains a robust Health & Safety (H&S) management system through Evotix, supported by an approved policy and a comprehensive suite of associated procedures. All colleagues receive H&S training via the Learning Management System. The Group will continue to strengthen its Health & Safety governance, reporting cadence and assurance activities to enhance visibility of compliance for senior management and the Board.	New risk

Section 172 Statement

The Directors recognise their duty under section 172 of the Companies Act 2006 to promote the success of the Company for the benefit of its members, while considering long-term consequences, employee interests, stakeholder relationships, environmental impact, reputation and fairness.

DIGNITY GROUP HOLDINGS LIMITED

STRATEGIC REPORT

FOR THE PERIOD ENDED 26 DECEMBER 2025

Key actions during the year included:

Early repayment of Secured Class A loan notes.
Acquisition of Farewill.
Investing in energy-efficient cremators to support a reduction in long term environmental impact and digital transformation to support long-term sustainability.
Enhancing employee engagement through training, wellbeing initiatives and communication forums.
Strengthening customer and supplier relationships through service improvements and feedback.
Supporting community initiatives.
Maintaining high standards of governance and ethical conduct.
Enhanced care of the deceased systems.
Launch of Simplicity.

These actions reflect the Board's commitment to balancing stakeholder interests and ensuring sustainable growth.

The Directors believe they have, in all material respects, had regard to the factors outlined above. Further details are provided in the Wates Corporate Governance Principles for Large Private Companies statement on pages 12 to 18.

Environmental, Social and Governance (ESG) Matters (SECR)

Streamlined Energy and Carbon Reporting (SECR)

The Group continued to make positive progress in reducing its environmental impact, building on the reductions in total energy consumption and emissions achieved in 2024 and delivering further improvements in 2025.

The tables below present the Group's energy consumption, associated emissions, energy efficiency initiatives, and performance in line with the UK Government's SECR framework for the financial years ended 26 December 2025 and 27 December 2024.

Clear metrics, targets and KPIs are essential for stakeholders to understand the Group's climate strategy. In 2024 the Board approved a £18.2m, two to three year programme, to upgrade crematoria hardware, reducing gas use and emissions. £9.4m of this was invested in 2025. The Group has also modernised storage equipment with energy-efficient systems, including a £3m investment in the Scottish funerals business.

Energy Consumption

The total energy consumption (kWh) for the UK operations in 2025 and 2024 is presented in the table below. It covers grid-supplied electricity, transportation fuels, and gaseous fuels. The total consumption decreased from 93,273,255 kWh in 2024 to 88,062,215 kWh in 2025, reflecting a decrease of 5.6 per cent due to reduction in use of natural gas partly given by the investment in and more efficient use of cremators.

Dignity Group Holdings Limited 2025 UK Total Energy Consumption (kWh).

Utility and Scope	Consumption 2025 (kWh)(UK)	Consumption 2024 (kWh) (UK)	Consumption YoY % (decrease)/increase (kWh) (UK)
Scope 1 Total	71,879,892	76,451,798	(6.0%)
Gaseous and Other Fuels (Scope 1)	56,857,825	61,215,161	(7.1%)
Transportation (Scope 1)	15,022,067	15,236,637	(1.4%)
Scope 2 Total	15,982,143	15,705,578	1.8%
Grid-Supplied Electricity (Scope 2)	15,982,143	15,705,578	1.8%
Scope 3 Total	200,180	1,115,879	(82.1%)
Transportation (Scope 3)^{(1)}	200,180	1,115,879	(82.1%)
Total	88,062,215	93,273,255	(5.6%)

DIGNITY GROUP HOLDINGS LIMITED
STRATEGIC REPORT
FOR THE PERIOD ENDED 26 DECEMBER 2025

1) Transport (Scope 3) covers all business travel in vehicles not owned by the business. Overall reduction in consumption is driven by gas consumption and change in calculation methodology for Scope 3 transport from a spend based approach in 2024 to a more accurate mileage based approach in 2025.

Emissions

The table below summarises the Group's greenhouse gas (GHG) emissions for the year, reported across Scopes 1, 2 and 3 to demonstrate transparency in addressing climate change. Scope 1 covers direct emissions from natural gas and fuels used in company vehicles; Scope 2 includes indirect emissions from purchased electricity; and Scope 3 relates to business travel in employee-owned vehicles. Other Scope 3 categories are not reported.

Dignity Group Holdings Limited 2025 UK Location-Based Emissions (tCO₂e)

Utility and Scope	Consumption 2025 (tCO₂e) (UK)	Consumption 2024 (tCO₂e) (UK)	Consumption YoY % (decrease)/increase (kWh) (UK)
Scope 1 Total	14,268	14,902	(4.3%)
Gaseous and Other Fuels	10,670	11,196	(4.7%)
Transportation (Scope 1)	3,598	3,706	(2.9%)
Scope 2 Total	2,829	3,252	(13.0%)
Grid-Supplied Electricity (Scope 2)	2,829	3,252	(13.0%)
Scope 3 Total	45	251	(82.1%)
Transportation (Scope 3)(1)	45	251	(82.1%)
Total	17,142	18,405	(6.8%)

2) Transport (Scope 3) covers all business travel in vehicles not owned by the business. Overall reduction in consumption is driven by gas consumption and change in calculation methodology for Scope 3 transport from a spend based approach in 2024 to a more accurate mileage-based approach in 2025.

Scope 2 has decreased by 12.7 per cent primarily due to a change in location-based emission factors, due to the grid introducing more renewables to help reduce UK's emissions.

Intensity Metrics

In addition to absolute emissions data for Scopes 1, 2 and 3, the Group reports intensity metrics to show changes relative to key business indicators. Full-time equivalents (FTE) are included as a standard benchmark, alongside a cremation-based metric to assess cremator performance. This enables tracking of progress as advanced cremator technology is implemented.

Dignity Group Holdings Limited 2025 UK Location-Based Intensity Metric

Intensity Metric	2025 Location-based	2024 Location-based	YoY % Change
Average number of FTE*	2,825	2,886	(2.1%)
All Scopes tCO₂e/FTE	6.07	6.38	(4.9%)
Total number of Cremations	73,700	70,000	5.3%
All Scopes tCO₂e/Cremations	0.23	0.26	(11.5%)

Prior year used December FTE but this has been restated to show average FTE for 2025 as a more accurate way of looking at the intensity metric across the year.

Energy Efficiency Improvements:

The Group is committed to delivering year-on-year improvements in operational energy efficiency.

Measures Undertaken in 2025:

Site upgrades continued throughout the year, supported by capital expenditure investment. Key initiatives included the replacement and upgrade of a number of cremators as part of a Mercury Abatement initiative to reduce carbon emissions, further installation of motion sensors and LED lighting, upgrades to fridges and cold rooms, and the introduction of more efficient heating and air conditioning systems.

DIGNITY GROUP HOLDINGS LIMITED

STRATEGIC REPORT

FOR THE PERIOD ENDED 26 DECEMBER 2025

Reporting Methodology

SECR data, including Scope 1, 2 and 3 consumption and CO₂e emissions, has been calculated in line with the GHG Protocol (World Business Council for Sustainable Development and World Resources Institute), ISO 14064 standards, and HM Government's Environmental Reporting Guidelines. Emission factors are based on the Government Emissions Factor Database 2023 (version 1.1) for the reporting period 01/01/2025 – 31/12/2025.

Where billing data was incomplete, estimates were calculated on a pro-rata kWh/day basis at meter level. For properties without meter data, annual quantities (AQ) were derived from industry averages via our electricity provider, Bryt Energy.

Intensity metrics were calculated using total tCO₂e figures and selected performance indicators:

Full-time average equivalents (FTE): 2025 – 2825; 2024 – 2,886 (see the intensity metrics table)
Cremations: 2025 – 73,700 (2024 – 70,000)

All emissions and energy use figures were calculated internally by the Group. No formal assurance has been provided.

The Strategic report was approved by the Board on 29 April 2026.

On behalf of the Board

Signed by:
Billie Byng-Thorne
Secretary of U.S. Air and Space Administration
Z Byng-Thorne
Director

DIGNITY GROUP HOLDINGS LIMITED

DIRECTORS' REPORT

FOR THE PERIOD ENDED 26 DECEMBER 2025

The Directors present their report together with the audited consolidated financial statements of Dignity Group Holdings Limited ("the Company") and its subsidiaries ("the Group") for the 52-week period ended 26 December 2025.

In accordance with Section 414C (11) of the Companies Act 2006, certain matters required in the Directors' Report are included in the Strategic Report (pages 1 – 10) as they are considered of strategic importance. These include:

Future business developments;
Post balance sheet events; and
Principal business risks and mitigating activities (See Risks on pages 4 to 7); and
Total greenhouse gas emissions and carbon reporting (See SECR on pages 8 to 10).

Directors:

The Directors who served during the period and up to the date of signing the financial statements were:

C Wensley
E Tate (appointed 11 July 2025)
G Castagno
N Edwards
R Brown
S Garrood
S Long (resigned 11 July 2025)
S Tatters
Z Byng-Thome

The Directors had no interests in the share capital of the Company at the Statement of Financial Position date. Further details on Board composition are provided on page 13.

Results and Dividends:

The Company declared and paid no dividend (2024: £nil).

Going Concern

The consolidated and company financial statements of Dignity Group Holdings Limited are prepared on a going concern basis, having considered the period through to 30 June 2027. See Note 1 for further details.

Competition and Markets Authority (CMA) Inquiry

On 27 March 2026, as part of a broader investigation into potential fake or misleading online reviews, the CMA opened an investigation into the Company's compliance with law on unfair commercial practices under the Digital Markets, Competition and Consumers Act 2024 (DMCC Act) in relation to obtaining consumer reviews about crematoria. An update is expected in September 2026.

Pensions

The balance sheet shows a surplus of £1.9m before deferred tax (2024: £1.2m deficit), recognised as disclosed under Note 2. The funding position of the scheme has improved such that in October 2025 it was agreed with the scheme trustees that the deficit contributions would cease. A contribution continues to be made to the scheme expenses. Funding will be reviewed again as part of the April 2026 actuarial valuation.

Financial Risk:

The Group's financial risk management objectives and policies are detailed in Notes 3 and 26 to the financial statements.

Locations Outside the UK:

The Group operates one subsidiary registered in Jersey, serving the Channel Islands.

DIGNITY GROUP HOLDINGS LIMITED

DIRECTORS' REPORT

FOR THE PERIOD ENDED 26 DECEMBER 2025

Employment Policies: During the period, the Group has continued to fulfil its commitment to effectively communicate with and involve employees in its activities. Communication channels include regular all-colleague town halls, an in-house intranet, team talks, management away-days, and national and regional bulletins. Employment policies are designed to ensure equal opportunities for all. The Group treats disabled persons on an equal basis with others and endeavours to support and accommodate individuals who become disabled while employed by Dignity.

Directors' Indemnities

During the period, the Group maintained liability insurance for its Directors and Officers. The Directors of the Company benefit from an indemnity provision contained within Dignity Group Holdings Limited's Articles of Association. This provision, which qualifies as a third-party indemnity under Section 234 of the Companies Act 2006, was in force throughout the period and remains in force at the date of this report.

Auditor

Ernst & Young LLP are deemed to be reappointed as auditors under Section 487(2) of the Companies Act 2006.

Statement of Disclosure to the Auditor

So far as each Director is aware, there is no relevant audit information of which the Group's auditor is unaware. Each Director has taken all the necessary steps that to make themselves aware of any relevant audit information and to ensure that the auditor is aware of that information.

Corporate Governance Arrangements:

The Group recognises the importance of strong governance in promoting long-term sustainable success. In accordance with the Companies (Miscellaneous Reporting) Regulations 2018, the Group has adopted the Wates Corporate Governance Principles for Large Private Companies as its governance framework. Details as to how the Group operated in accordance with the Principles are set out below:

Principle 1: Purpose and Leadership

The Board

Is responsible for the Group's long-term success, setting strategy and policies to deliver sustainable value within a framework of controls, delegated authority and rewards.

Purpose, Values and Culture

The Group's purpose is to lead the UK end-of-life sector by expanding its core business, growing funeral plan and direct cremation share, and introducing legal services. It provides services including funerals, cremations, burials, memorialisation, funeral plans, wills and probate. Its vision is to serve one in three families who require end of life services annually, delivering best-in-class care through a compassionate workforce and a sustainable model focused on staff, stakeholders and continuous improvement. Culture is monitored through feedback, internal communications, Town Halls, CEO updates and site visits.

Terms of Reference

The Board engages with its ultimate owners on performance, strategy and investment. Priorities include expanding funeral plan penetration, increasing cremation market share, optimising the estate and launching Legal Services. The CFO maintains dialogue with bondholders and funeral plan and pension trustees.

Policies

Policies cover conduct, employees, customers, suppliers, environmental responsibility and compliance, including health and safety, are reviewed annually by the Board and Executive Leadership Team. A Speak Up Policy with an anonymous hotline ensures concerns are investigated promptly, with any reports reviewed by the Audit Committee.

DIGNITY GROUP HOLDINGS LIMITED

DIRECTORS' REPORT

FOR THE PERIOD ENDED 26 DECEMBER 2025

Conflicts of Interest

Conflicts of Interest are a standing Board item. Directors declare interests under the Articles of Association and Companies Act 2006. The Conflicts of Interest Policy, reviewed in December 2025, sets procedures for managing conflicts. Directors declare interests on appointment and seek authorisation for new roles. Approved conflicts are recorded in the Conflicts of Interest register.

Principle 2: Board Composition

The Board

The Board is responsible for the long-term success of the Group. It currently comprises seven directors: two independent non-executive directors, two executive directors and four shareholder-nominated non-executive directors. Membership up to the date of signing the Annual Report is as follows:

Name	Position on the Board
Christopher Wensley	Non-Executive Director of the shareholders
Emily Tate (Appointed 11 July 2025)	Executive Director - Chief Financial Officer (CFO)
Giovanni Castagno	Independent Non-Executive Director
Nicholas Edwards	Non-Executive Director
Richard Brown	Non-Executive Director of the shareholders
Shirley Garrood	Chair and Independent Non-Executive Director
Steve Long (Resigned 11 July 2025)	Executive Director - Chief Financial Officer (CFO)
Steven Tatters	Non-Executive Director
Zillah Byng-Thorne	Executive Director - Chief Executive Officer (CEO)

Nicholas Edwards, Steven Tatters, Richard Brown and Christopher Wensley are shareholder-nominated non-executive directors. Emily Tate was appointed the board on 11th July 2025.* Steve Long resigned from his role as executive director on 11th July 2025.

During the year Non-Executive Directors have supported the Executive Directors in the delivery of key strategic projects.

Board composition is defined by the Articles of Association, allowing the Controlling Shareholder to appoint directors. The Board combines expertise in financial services, corporate development and regulated, customer-focused businesses and includes two independent non-executive directors who provide independent challenge.

The Board prioritises professional development through ongoing training and completed a Board Evaluation in 2025.

Principle 3: Director Responsibilities

Separation of Roles

The roles of Chair and Chief Executive Officer are clearly separated to ensure balanced authority. The Chair leads the Board and promotes constructive debate, while the CEO manages performance, delivery of strategy, daily operations and implements Board decisions.

Corporate Governance Structure

The Board delegates responsibilities to Audit and Risk Committees, chaired by an independent director, supported by shareholder-nominated non-executive directors. Committee Chairs report to the Board, which retains ultimate responsibility.

The Risk Committee advises on Group-wide risk management, while the Audit Committee oversees financial statement integrity, auditor independence and internal controls, ensuring internal audit is adequately resourced.

DIGNITY GROUP HOLDINGS LIMITED

DIRECTORS' REPORT

FOR THE PERIOD ENDED 26 DECEMBER 2025

Schedule of Matters Reserved for the Board

The Board approves and monitors:

Group strategy and annual budgets
Internal controls and risk management
Financial statements and policies
Board size, structure and composition
Significant Group policies

Committee Membership

Both Committees comprise two independent and two shareholder-nominated non-executive directors. The Risk Committee, chaired by Giovanni Castagno, invites the CEO and CFO to attend supported by the Risk and Compliance Director. The Audit Committee, chaired by Shirley Garrood, includes standing invitations for the CEO, CFO, Head of Internal Audit and External Auditor, with other management attending as required.

Board and Committee Meetings

The Risk Committee meets four times a year; the Audit Committee at least three times in line with the reporting cycle. In 2025, the Board and Committees met quarterly and as required.

Number of Board and Committee meetings held
Board	6
Audit Committee	4
Risk Committee	4

Company Secretary

The Company Secretary manages agendas, minutes and Board papers, and provides governance advice. Directors may seek independent advice at the Company's expense. Papers are circulated electronically in advance, and formal minutes are prepared for all meetings.

Executive Leadership Team

Day-to-day management is delegated to the Executive Leadership Team, led by the CEO. The team meets weekly and monthly to oversee operations and implement Board-approved strategies.

Internal Audit Interaction

The Head of Internal Audit meets privately with the Audit Committee Chair and annually with members without Executive Directors present, enabling open discussion and monitoring of audit reports and conclusions.

Internal Controls

Management maintains internal controls, reviewed by the Audit Committee for effectiveness and escalated to the Board if significant. Internal Audit conducts an annual programme to test controls and recommend improvements, with findings monitored by the Audit Committee.

Key Areas of Board Focus in 2025

The Board focused on strategy, financial performance, operational improvements, governance, compliance, risk management and people initiatives to support long-term sustainability and shareholder value.

The table below summarises the key activities, matters considered, and actions taken during the year:

Activity	Key Matters Considered	Actions Taken
Strategy Review	• Market dynamics
• Competitor analysis
• Regulatory developments
• Customer needs	• Monitoring strategic initiatives and trading estate performance
• Implementing revised funeral and cremation pricing
• Approving launch of Legal Services
• Introducing Simplicity Cremations

DIGNITY GROUP HOLDINGS LIMITED

DIRECTORS' REPORT

FOR THE PERIOD ENDED 26 DECEMBER 2025

Activity	Key Matters Considered	Actions Taken
Financial Performance	• Monthly performance
• Budget and forecast Capital strategy	• Approving FY25 budget and roadmap
• Approving FY26 budget and roadmap
• Approval of acquisition of Farewill Ltd
• Approving FY24 Annual Accounts (April 2025)
• Completing early repayment of Class A Notes
• Executing sale and leaseback of six crematoria sites and related transactions
• Requested the release of £60m trust surplus
People & Culture	• Colleague engagement
• Policies	• Approving Gender Pay Gap Report
• Approving Modern Slavery Statement
• Updating policies on Financial Crime
• Updating Speak Up policy
Operational Performance	• Rescue plan holders
• Operational efficiencies	• Continued to pursue the recovery of rescue plan trust assets
• Disposing of some non-core freehold properties
• Closing 11 funeral branches
• Advancing Standard Operating Procedures (SOPs)
Risk	• Risk appetite and principal risks	• Approving revisions to the Enterprise Risk Management Framework
• Approving Compliance Monitoring Plan
• Monitoring compliance status
• Agreeing oversight of risks relating to the Legal Services business line
Regulatory Matters	• Consumer Duty
• Scottish Funeral Regulations
• Environmental matters	• Providing regular updates on Consumer Duty implementation
• Approving Consumer Duty Annual Report
• Reviewing regulatory Wind Down Plan
Governance	• Governance framework
• Board effectiveness	• Updating Schedule of Matters Reserved
• Receiving Board training on ECCTA – Failure to Prevent Fraud
• Approving Tax Strategy
• Approving Conflicts of Interest policies
• Conducted board evaluation

DIGNITY GROUP HOLDINGS LIMITED

DIRECTORS' REPORT

FOR THE PERIOD ENDED 26 DECEMBER 2025

Principle 4: Opportunity and Risk

Business opportunities are regularly reviewed with representatives of Valderrama Limited, the Group's ultimate shareholder. Any opportunities above a defined threshold require Board approval.

The Risk Committee advises the Board on risk management, recommends risk limits and appetite, and oversees risk arrangements. Principal risks are identified by the Risk team with senior management, while the Board sets and reviews risk appetite.

Principle 5: Remuneration

Operational risk assessments are conducted for all significant new activities. The Board, through the Risk Committee, undertakes a robust review of principal risks, updated in December 2025 to reflect current business activities.

Remuneration Oversight

The Board oversees remuneration principles and policies, including pay for non-executive directors, executive directors and senior management, in line with the Articles of Association and subject to shareholder approval where required. No individual participates in decisions on their own pay.

Workforce Remuneration

The Group applied new rates from April 2025, ensuring all operations colleagues earn at or above the national minimum wage. A Gender Pay Gap report is published on the Group's website. An annual performance bonus scheme applies to all colleagues, linked to company results and comprising:

Achievement of the Group's annual financial threshold
Team targets, including financial and non-financial measures.

Executive Remuneration

Executive and senior management pay balances fixed and variable elements, including:

Base salary and pension
Bonus and long-term incentives
Share awards and benefits such as death-in-service cover and private medical insurance

Directors' Emoluments

Details of Directors' remuneration for the year ended 26 December 2025 are provided in Note 6.

Principle 6: Stakeholder Relationships and Engagement

Shareholders

Engagement is led by the CEO and overseen by Directors. Valderrama Limited monitors Group performance. The Executive Directors and the Chair, hold regular one-to-one meetings with the owners.

Customers

The Group meets customer needs with sensitivity through branches, phone, online and home visits. Post-service surveys inform service improvements, with satisfaction central to growth.

Colleagues

Engagement includes meetings, surveys, town halls and internal communications. The Equality and Diversity Policy ensures fair treatment, supported by learning resources on inclusion. Partners and Suppliers

The Group builds long-term relationships under its Procurement Policy, with contract owners responsible for compliance and adherence to the Group Modern Slavery Policy.

Bondholders

Engagement includes meetings, investor presentations and published reports on the Group's website.

DIGNITY GROUP HOLDINGS LIMITED

DIRECTORS' REPORT

FOR THE PERIOD ENDED 26 DECEMBER 2025

Regulatory Authorities

The Group supports regulatory development. As part of its accreditation with the Financial Conduct Authority the Group publishes annual Solvency Assessments Reports online regarding trust assets and liabilities. The Group also monitors the required levels of funding and FCA metrics. The Group has invested heavily to ensure compliance with the Funeral Code of Practice introduced under the Burial and Cremation (Scotland) Act 2016 and which came into force 1 March 2025. The Group is well advanced in a programme to upgrade its cremators ahead of changes to the Mercury Abatement regulations.

Communities and Environment

Colleagues contribute through education, charity and local initiatives. Environmental responsibility is prioritised via investment in energy-efficient cremators, refrigeration and modern facilities.

In August 2025, the Group launched its "Caring With Confidence Project" — a partnership between Dignity Funerals Ltd (a subsidiary of Dignity Group Holdings Limited) and Hospice UK, dedicated to transforming how people care, grieve, and say goodbye.

In December 2025 the business published the first ever State of Dying in the UK report in conjunction with Hospice UK, bringing together the views of over 4,000 people. This report shines a light on the changes needed to ensure every life is able to end with care, dignity, and compassion and for families to feel supported through every stage, from care to bereavement, and never face confusion or conflict when navigating their responsibilities. The Group believes in:

Health and social care reform to guarantee equitable access to compassionate end-of-life care for all.
A regulated funeral industry that acts in the best interests of bereaved families and respects final wishes.
Practical support for families, including clearer pathways and future care planning to demystify conversations about death.
Enhanced workplace guidance for employers and employees returning after bereavement.

Stakeholder Engagement and Principal Decisions

The Board considers stakeholder interests in all material decisions. A summary table outlines principal decisions, engagement and outcomes.

Principal Decision	Stakeholder engagement	Outcomes
Business Launches
In June 2025, the Board approved launching Dignity Legal Services after acquiring the Farewill Group (approved October 2024, completed 31 January 2025). It also approved introducing Simplicity Cremations to meet rising demand for non-attended cremations plans	The Board considered key stakeholders—shareholders, bondholders, and customers—alongside future business plans and creating long-term shareholder value.	The Board advanced Dignity's strategy by expanding products, modernising technology, and creating earlier engagement opportunities in later-life planning.

DIGNITY GROUP HOLDINGS LIMITED

DIRECTORS' REPORT

FOR THE PERIOD ENDED 26 DECEMBER 2025

Operational Performance Review
In 2025, the Board advanced plans to boost operational performance, approving a pricing review, a freehold property disposal programme, and the closure or relocation of underperforming funeral branches.	The Board considered customers, colleagues, shareholders, and communities, along with impacts on client service, colleague support, community effects, and future structure and strategy options.	Key initiatives included new leadership structures, standardised procedures and releasing freehold value with further opportunities to maximise branch network value.
Capital Restructure
In 2025, the Group advanced its plan to strengthen its capital structure by enabling early redemption of Class A Notes.

The Board approved the making of a request to the trustees for the withdrawal of £60.0m surplus from funeral plan trusts to fully repay Class A Notes and repay shareholder loans, reducing debt costs, improving covenant headroom, and enhancing financial resilience. | The Board considered the interests of bondholders and the Group's long-term capital needs. It also took into account macro-economic and market conditions, the potential to invest in the business following the redemption of securitised debt, and the strategic options available to implement the proposed repayment.

The Board has worked with the Trust Trustees to closely match the assets and liabilities of the Trusts. | In July 2025, the Group initiated a tender and market purchase for the Class A Notes. In November, the Board approved and completed repayment of shareholder loans to Phoenix UK Fund Limited and Castelnau Group Limited.

The work performed with Trustees to closely match the assets and liabilities of the Trusts enabled the Group to realise a £60m surplus from the Trusts, which facilitated the full redemption of the Class A Notes (subsequent to the year-end).

These measures reduced debt-service costs by approximately £4.9m, enhanced covenant headroom, and further reinforced the Group's overall capital structure. |

The Director's report was approved by the Board on 29 April 2026.

On behalf of the Board

Signed by:
Emily Tate
E Tate
DIRECTOR

DIGNITY GROUP HOLDINGS LIMITED

DIRECTORS' RESPONSIBILITIES IN THE PREPARATION OF THE FINANCIAL STATEMENTS

FOR THE PERIOD ENDED 26 DECEMBER 2025

The Directors are responsible for preparing the Strategic Report, the Directors' Report and the financial statements in accordance with applicable law and regulations.

Company law requires the Directors to prepare financial statements for each financial period. The Directors have elected to prepare these financial statements in accordance with United Kingdom Generally Accepted Accounting Practice. Under Company law, they must not approve the financial statements unless satisfied that they give a true and fair view of the state of affairs of the Group and the Company and of the profit or loss for that period.

In preparing the financial statements, the Directors are required to:

select suitable accounting policies and apply them consistently;
make judgements and estimates that are reasonable and prudent;
state whether applicable United Kingdom Accounting Standards have been followed, subject to any material departures disclosed and explained in the financial statements; and
prepare the financial statements on a going concern basis unless it is inappropriate to presume that the Group and Company will continue in business.

The Directors are also responsible for:

keeping adequate accounting records sufficient to show and explain the Company's transactions and disclose with reasonable accuracy its financial position at any time;
ensuring compliance with the Companies Act 2006; and
safeguarding the assets of the Group and the Company and taking reasonable steps to prevent and detect fraud and other irregularities.

INDEPENDENT AUDITOR'S REPORT TO THE MEMBERS OF DIGNITY GROUP HOLDINGS LIMITED

Opinion

We have audited the financial statements of Dignity Group Holdings Limited ('the parent company') and its subsidiaries (the 'group') for the 52 week period ended 26 December 2026 which comprise Consolidated Income Statement, Consolidated Statement of Comprehensive Income, Consolidated Statement of Financial Position, Company Statement of Financial Position, Consolidated Statement of Changes in Equity, Company Statement of Changes in Equity, Consolidated Statement of Cashflows and the related notes 1 to 39, including a summary of significant accounting policies. The financial reporting framework that has been applied in their preparation is applicable law and United Kingdom Accounting Standards including FRS 102 "The Financial Reporting Standard applicable in the UK and Republic of Ireland" (United Kingdom Generally Accepted Accounting Practice).

In our opinion, the financial statements:

give a true and fair view of the group's and of the company's affairs as at 26 December 2025 and of the group's loss for the 52 week period then ended;
have been properly prepared in accordance with United Kingdom Generally Accepted Accounting Practice; and
have been prepared in accordance with the requirements of the Companies Act 2006.

Basis for opinion

We conducted our audit in accordance with International Standards on Auditing (UK) (ISAs (UK)) and applicable law. Our responsibilities under those standards are further described in the Auditor's responsibilities for the audit of the financial statements section of our report. We are independent of the group in accordance with the ethical requirements that are relevant to our audit of the financial statements in the UK, including the FRC's Ethical Standard, and we have fulfilled our other ethical responsibilities in accordance with these requirements.

We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our opinion.

Conclusions relating to going concern

In auditing the financial statements, we have concluded that the directors' use of the going concern basis of accounting in the preparation of the financial statements is appropriate.

Based on the work we have performed, we have not identified any material uncertainties relating to events or conditions that, individually or collectively, may cast significant doubt on the group and parent company's ability to continue as a going concern for a period to 30 June 2027.

Our responsibilities and the responsibilities of the directors with respect to going concern are described in the relevant sections of this report. However, because not all future events or conditions can be predicted, this statement is not a guarantee as to the group's ability to continue as a going concern.

Other information

The other information comprises the information included in the annual report, other than the financial statements and our auditor's report thereon. The directors are responsible for the other information contained within the annual report.

Our opinion on the financial statements does not cover the other information and, except to the extent otherwise explicitly stated in this report, we do not express any form of assurance conclusion thereon.

Our responsibility is to read the other information and, in doing so, consider whether the other information is materially inconsistent with the financial statements or our knowledge obtained in the course of the audit or otherwise appears to be materially misstated. If we identify such material inconsistencies or apparent material misstatements, we are required to determine whether this gives rise to a material misstatement in the financial statements themselves. If, based on the work we have performed, we conclude that there is a material misstatement of the other information, we are required to report that fact.

We have nothing to report in this regard.

INDEPENDENT AUDITOR'S REPORT TO THE MEMBERS OF DIGNITY GROUP HOLDINGS LIMITED

Opinions on other matters prescribed by the Companies Act 2006

In our opinion, based on the work undertaken in the course of the audit:

the information given in the strategic report and the directors' report for the financial year for which the financial statements are prepared is consistent with the financial statements; and
the strategic report and directors' report have been prepared in accordance with applicable legal requirements.

Matters on which we are required to report by exception

In the light of the knowledge and understanding of the group and the parent company and its environment obtained in the course of the audit, we have not identified material misstatements in the strategic report or directors' report.

We have nothing to report in respect of the following matters in relation to which the Companies Act 2006 requires us to report to you if, in our opinion:

adequate accounting records have not been kept, or returns adequate for our audit have not been received from branches not visited by us; or
the parent company financial statements are not in agreement with the accounting records and returns; or
certain disclosures of directors' remuneration specified by law are not made; or
we have not received all the information and explanations we require for our audit

Responsibilities of directors

As explained more fully in the directors' responsibilities statement set out on page 19, the directors are responsible for the preparation of the financial statements and for being satisfied that they give a true and fair view, and for such internal control as the directors determine is necessary to enable the preparation of financial statements that are free from material misstatement, whether due to fraud or error.

In preparing the financial statements, the directors are responsible for assessing the group's and the parent company's ability to continue as a going concern, disclosing, as applicable, matters related to going concern and using the going concern basis of accounting unless the directors either intend to liquidate the group or the parent company or to cease operations, or have no realistic alternative but to do so.

Auditor's responsibilities for the audit of the financial statements

Our objectives are to obtain reasonable assurance about whether the financial statements as a whole are free from material misstatement, whether due to fraud or error, and to issue an auditor's report that includes our opinion. Reasonable assurance is a high level of assurance, but is not a guarantee that an audit conducted in accordance with ISAs (UK) will always detect a material misstatement when it exists. Misstatements can arise from fraud or error and are considered material if, individually or in the aggregate, they could reasonably be expected to influence the economic decisions of users taken on the basis of these financial statements.

Explanation as to what extent the audit was considered capable of detecting irregularities, including fraud

Irregularities, including fraud, are instances of non-compliance with laws and regulations. We design procedures in line with our responsibilities, outlined above, to detect irregularities, including fraud. The risk of not detecting a material misstatement due to fraud is higher than the risk of not detecting one resulting from error, as fraud may involve deliberate concealment by, for example, forgery or intentional misrepresentations, or through collusion. The extent to which our procedures are capable of detecting irregularities, including fraud is detailed below. However, the primary responsibility for the prevention and detection of fraud rests with both those charged with governance of the entity and management.

INDEPENDENT AUDITOR'S REPORT TO THE MEMBERS OF DIGNITY GROUP HOLDINGS LIMITED

Our approach was as follows:

We obtained an understanding of the legal and regulatory frameworks that are applicable to the company and determined that the most significant are those that relate to the reporting framework (UK GAAP, FRS 102 and the Companies Act 2006) and the relevant tax compliance regulations in the UK. In addition, we concluded that there are certain significant laws and regulations which may have an effect on the determination of the amounts and disclosures in the financial statements being the industry regulation over pre-need funeral plans by the FCA and those laws and regulations relating to occupational health and safety and data protection.
We understood how Dignity Group Holdings Limited is complying with those frameworks by making enquiries of management, internal audit and those responsible for legal and compliance procedures. We corroborated our enquiries through our review of board minutes, papers provided to the Audit Committee and any correspondence received from regulatory bodies.
We assessed the susceptibility of the Company's financial statements to material misstatement, including how fraud might occur by meeting with management to understand where it considered there was susceptibility to fraud. We also considered performance targets and their influence on efforts made by management to manage earnings or influence the perceptions of analysts. We considered the programmes and controls that the group has established to address risks identified, or that otherwise prevent, deter and detect fraud; and how senior management monitors those programmes and controls. Where the risk was higher, we performed audit procedures to address each identified fraud risk. These procedures included testing manual journals and were designed to provide reasonable assurance that the financial statements were free from material misstatements arising from fraud.
Based on this understanding we designed our audit procedures to identify noncompliance with such laws and regulations. Our procedures involved journal entry testing, with a focus on manual journals and journals indicating large or unusual transactions based on our understanding of the business to include testing where the balances were susceptible to judgement and/or estimation uncertainty; enquiries of group management and internal audit, inspection of correspondence between management and relevant regulators, including the Financial Conduct Authority ("FCA") and Competition Market Authority ("CMA") and evaluating the legal advice obtained from the management specialists and involving EY specialists to assess the regulatory and contractual aspects of the investigation.

A further description of our responsibilities for the audit of the financial statements is located on the Financial Reporting Council's website at https://www.frc.org.uk/auditorsresponsibilities. This description forms part of our auditor's report.

Use of our report

This report is made solely to the company's members, as a body, in accordance with Chapter 3 of Part 16 of the Companies Act 2006. Our audit work has been undertaken so that we might state to the company's members those matters we are required to state to them in an auditor's report and for no other purpose. To the fullest extent permitted by law, we do not accept or assume responsibility to anyone other than the company and the company's members as a body, for our audit work, for this report, or for the opinions we have formed.

Signed by:

David Wilson

David Wilson (Senior statutory auditor)

for and on behalf of Ernst & Young LLP, Statutory Auditor

London

29 April 2026

DIGNITY GROUP HOLDINGS LIMITED

CONSOLIDATED INCOME STATEMENT

FOR THE PERIOD ENDED 26 DECEMBER 2025

| | Notes | 52 week
period ended
26 December
2025 | 52 week
period
ended 27
December
2024
Restated* |
| --- | --- | --- | --- |
| | | £m | £m |
| Turnover | 4 | 328.8 | 328.1 |
| Cost of sales | | (189.4) | (177.3) |
| Gross profit | | 139.4 | 150.8 |
| Administrative expenses | | (104.1) | (136.6) |
| Operating profit | | 35.3 | 14.2 |
| Interest receivable and similar income | 7 | 14.5 | 11.8 |
| Interest payable and similar expenses | 8 | (91.5) | (115.1) |
| Realised investment income | 14 | 50.0 | 99.5 |
| Profit before taxation | 9 | 8.3 | 10.4 |
| Taxation | 10 | (9.6) | (11.8) |
| Loss after taxation and loss for the period | | (1.3) | (1.4) |

The results have been derived wholly from continuing activities.

Comparatives have been restated to reflect prior-year adjustments relating to the rescue provision and the significant financing component within deferred income. Refer to Notes 1 and 39 for further details.

DIGNITY GROUP HOLDINGS LIMITED

CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME

FOR THE PERIOD ENDED 26 DECEMBER 2025

| | Note | 52 week
period
ended 26
December
2025 | 52 week
period
ended 27
December
2024
Restated* |
| --- | --- | --- | --- |
| | | £m | £m |
| Loss for the period | | (1.3) | (1.4) |
| Other comprehensive profit: | | | |
| Remeasurement gain on retirement benefit obligations | | 1.5 | 1.3 |
| Deferred tax charge on actuarial gains on defined benefit plans | | (0.4) | (0.3) |
| Deferred tax on pension contributions | | (0.5) | (0.9) |
| Current tax credit on pensions contributions | | 0.4 | 0.8 |
| Other comprehensive income for the period | | 1.0 | 0.9 |
| Total comprehensive loss for the period | | (0.3) | (0.5) |
| Total comprehensive loss for the period attributable to: | | | |
| Owners of the parent company | | (0.3) | (0.5) |

Comparatives have been restated to reflect prior-year adjustments relating to the rescue provision and the significant financing component within deferred income. Refer to Notes 1 and 39 for further details.

DIGNITY GROUP HOLDINGS LIMITED

CONSOLIDATED STATEMENT OF FINANCIAL POSITION

AS AT 26 DECEMBER 2025

	Note	At 26 December 2025	At 27 December 2024 Restated*
		£m	£m
Fixed assets
Intangible assets	11	71.7	72.6
Tangible fixed assets	12	174.2	194.9
Right-of-use assets	13	56.3	48.2
Investments	14	847.9	899.4
Defined benefit pension surplus	28	1.9	-
		1,152.0	1,215.1
Current assets
Stock	16	6.7	6.8
Debtors (including £166.1m (2024: £163.8m) due after more than one year)	17	215.6	215.6
Cash at bank and in hand	18	98.9	73.7
		321.2	296.1
Creditors: Amounts falling due within one year	20	(248.0)	(265.3)
Net current assets		73.2	30.8
Total asset less current liabilities		1,225.2	1,245.9
Creditors: Amounts falling due after more than one year	21	(1,647.5)	(1,678.8)
Provisions for liabilities	24	(40.2)	(41.8)
Net liabilities excluding pension liability		(462.5)	(474.7)
Defined benefit pension scheme liability	28	-	(1.2)
Net liabilities including pension liability		(462.5)	(475.9)
Capital and reserves
Called up share capital	26	6.2	6.2
Share premium reserve	27	14.3	13.8
Capital redemption reserve	27	141.7	141.7
Other reserves	27	13.2	-
Profit and loss account	27	(637.9)	(637.6)
Total equity attributable to the owners of the parent		(462.5)	(475.9)

DIGNITY GROUP HOLDINGS LIMITED

CONSOLIDATED STATEMENT OF FINANCIAL POSITION

AS AT 26 DECEMBER 2025

Comparatives have been restated to reflect prior-year adjustments relating to the rescue provision and the significant financing component within deferred income. Refer to Notes 1 and 39 for further details.

The financial statements on pages 23 to 110 were approved by the Board of Directors and authorised for issue on 29 April 2026 and are signed on its behalf by:

Signed by:
Emily Tate
ETSDCIWSP01743D...

E Tate
Director

DIGNITY GROUP HOLDINGS LIMITED

COMPANY STATEMENT OF FINANCIAL POSITION

AS AT 26 DECEMBER 2025

| | Note | At 26 December
2025
£m | At 27 December
2024
£m |
| --- | --- | --- | --- |
| Fixed assets | | | |
| Tangible fixed assets | 12 | 0.4 | - |
| Investments | 14 | 79.5 | 75.5 |
| | | 79.9 | 75.5 |
| Current assets | | | |
| Debtors (including £1.3m (2024: £nil) due after more than one year) | 17 | 339.5 | 347.9 |
| Cash at bank and in hand | | 5.4 | 1.7 |
| | | 344.9 | 349.6 |
| Creditors: Amounts falling due within one year | 20 | (67.3) | (81.9) |
| Net current assets | | 277.6 | 267.7 |
| Total asset less current liabilities | | 357.5 | 343.2 |
| Creditors: Amounts falling due after more than one year | 21 | (4.2) | (3.3) |
| Net assets | | 353.3 | 339.9 |
| Capital and reserves | | | |
| Called up share capital | 26 | 6.2 | 6.2 |
| Share premium account | 27 | 14.3 | 13.8 |
| Capital redemption reserve | 27 | 158.4 | 141.7 |
| Other reserves | 27 | 7.8 | 7.8 |
| Profit and loss account | 27 | 166.6 | 170.4 |
| Total equity | | 353.3 | 339.9 |

As permitted by section 408 of the Companies Act 2006, the Company has not presented its own income statement, statement of comprehensive income and related notes as it prepares Group accounts. The Company made a loss attributable to the equity shareholders of £4.1m (2024: £23.5m) in the period. The financial statements were approved by the Board of Directors and authorised for issue on 29 April 2026 and are signed on its behalf by:

DIGNITY GROUP HOLDINGS LIMITED

CONSOLIDATED STATEMENT OF CHANGES IN EQUITY

FOR THE PERIOD ENDED 26 DECEMBER 2025

	Share capital	Share premium account	Capital redemption reserve	Other reserves	Profit and loss account	Total
	£m	£m	£m	£m	£m	£m
Balance at 29 December 2023 (Restated – Note 39)	6.2	13.8	141.7	-	(637.1)	(475.4)
Loss for the period (Restated – Note 39)	-	-	-	-	(1.4)	(1.4)
Other comprehensive loss:
Remeasurement gain on retirement benefit obligations	-	-	-	-	1.3	1.3
Deferred tax charge on actuarial gains on benefit plans	-	-	-	-	(0.3)	(0.3)
Deferred tax charge on pensions contributions					(0.9)	(0.9)
Current tax credit on pension contributions	-	-	-	-	0.8	0.8
Total comprehensive loss for the period	-	-	-	-	(0.5)	(0.5)
Balance at 27 December 2024 (Restated)	6.2	13.8	141.7	-	(637.6)	(475.9)
Loss for the period	-	-	-	-	(1.3)	(1.3)
Other comprehensive income:
Remeasurement gain on retirement benefit obligations	-	-	-	-	1.5	1.5
Deferred tax on actuarial gains on defined pension plans	-	-	-	-	(0.4)	(0.4)
Deferred tax charge on pensions contributions	-	-	-	-	(0.5)	(0.5)
Current tax on pension contributions	-	-	-	-	0.4	0.4
Total comprehensive profit for the period	-	-	-	-	(0.3)	(0.3)
Transactions with owners:
Share issue (Note 27)	-	0.5	-	-	-	0.5
Capital contribution (Note 27)	-	-	-	13.2	-	13.2
Total transactions with owners	-	0.5	-	13.2	-	13.7
Balance at 26 December 2025	6.2	14.3	141.7	13.2	(637.9)	(462.5)

DIGNITY GROUP HOLDINGS LIMITED

COMPANY STATEMENT OF CHANGES IN EQUITY

FOR THE PERIOD ENDED 26 DECEMBER 2025

| | Share capital
£m | Share premium account
£m | Capital redemption reserve
£m | Other reserves
£m | Profit and loss account
£m | Total
£m |
| --- | --- | --- | --- | --- | --- | --- |
| Balance at 29 December 2023 | 6.2 | 13.8 | 141.7 | 7.8 | 194.2 | 363.7 |
| Loss for the period | - | - | - | - | (23.5) | (23.5) |
| Total comprehensive loss for the period | - | - | - | - | (23.5) | (23.5) |
| Transactions with owners: | | | | | | |
| Total transactions with owners | - | - | - | - | - | - |
| Balance at 27 December 2024 | 6.2 | 13.8 | 141.7 | 7.8 | 170.7 | 340.2 |
| Loss for the period | - | - | - | - | (4.1) | (4.1) |
| Total comprehensive loss for the period | - | - | - | - | (4.1) | (4.1) |
| Transactions with owners: | | | | | | |
| Share issue (Note 27) | - | 0.5 | - | - | - | 0.5 |
| Capital contribution (Note | - | - | - | 16.7 | - | 16.7 |
| Total transactions with owners | - | 0.5 | - | 16.7 | - | 17.2 |
| Balance at 26 December 2025 | 6.2 | 14.3 | 141.7 | 24.5 | 166.6 | 353.3 |

DIGNITY GROUP HOLDINGS LIMITED

CONSOLIDATED STATEMENT OF CASH FLOWS

FOR THE PERIOD ENDED 26 DECEMBER 2025

| | 52 week period ended
26 December 2025 | | 52 week period ended
27 December 2024 |
| --- | --- | --- | --- |
| | Note | £m | £m |
| Cash flows from operating activities | | | |
| Cash generated from/(used in) operations | 30 | 5.6 | (13.1) |
| Interest received | | 1.2 | 0.9 |
| Interest paid | | (26.6) | (16.2) |
| Payment to restricted bank accounts for finance costs | 18 | (9.3) | (9.7) |
| Realised return on financial assets | | 0.4 | 0.7 |
| Income taxes paid | | (23.3) | (29.9) |
| Net cash used in operating activities | | (52.0) | (67.3) |
| Cash flows from investing activities | | | |
| Contingent consideration relating to acquisition of subsidiaries and businesses | | - | (0.2) |
| Proceeds from sale and leaseback transaction | | 43.8 | - |
| Proceeds from sale of tangible fixed assets | | 15.0 | 24.3 |
| Purchase of tangible fixed assets | | (27.9) | (13.9) |
| Purchase of financial assets (by the Trusts) | | (787.4) | (2,040.8) |
| Disposals of financial assets (by the Trusts) | | 895.0 | 2,199.1 |
| Acquisition of a subsidiary, net of cash acquired | 37 | 1.6 | - |
| Net cash generated from investing activities | | 140.1 | 168.5 |
| Cash flows from financing activities | | | |
| Repayment of other borrowings | | (44.0) | - |
| Receipt of other borrowings | | - | 3.0 |
| Payments of Secured Notes | | (21.4) | (85.6) |
| Payment in Relation to amendment of Secured Loan notes agreement | | (0.4) | - |
| Payments to restricted bank accounts for repayment of borrowings | 18 | (39.4) | (2.4) |
| Principal elements of lease payments | | (6.2) | (7.3) |
| Deferred consideration | | (0.2) | - |
| Net cash used in financing activities | | (111.6) | (92.3) |
| Net (decrease)/ increase in cash and cash equivalents | | (23.5) | 8.9 |
| Cash and cash equivalents at the beginning of the period | | 73.7 | 52.7 |

DIGNITY GROUP HOLDINGS LIMITED

CONSOLIDATED STATEMENT OF CASH FLOWS

FOR THE PERIOD ENDED 26 DECEMBER 2025

Cash and cash equivalents at the end of the period	18	50.2	61.6
Amounts set aside for debt service payments	18(c)	48.7	12.1
Cash and cash equivalents at the end of the period as reported in the consolidated balance sheet		98.9	73.7

DIGNITY GROUP HOLDINGS LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE PERIOD ENDED 26 DECEMBER 2025

1. Accounting policies

General Information

Dignity Group Holdings Limited ("the Company") is a private company limited by shares and is incorporated and domiciled in England and Wales. The Company's registered address and principal place of business is 4 King Edwards Court, King Edwards Square, Sutton Coldfield, West Midlands, B73 6AP.

The Company and its subsidiaries (the "Group") provide end-of-life services, including funerals, crematoria, prepaid funeral plans and, from 31 January 2025, legal services. The Directors do not anticipate material changes to the Group's principal activities.

Basis of preparation

The consolidated financial statements cover the 52-week period ended 26 December 2025 (comparative: 52-week period ended 27 December 2024) and have been prepared in accordance with FRS 102 and the Companies Act 2006, including the provisions of the Large and Medium-sized Companies and Group (Accounts and Reports) Regulations 2008 and under the historical cost convention unless otherwise stated. All values are presented in Sterling, rounded to £0.1m.

Transition to FRS 102

The Group and the Company previously prepared its statutory financial statements in accordance with UK Adopted International Accounting Standards (IAS) until the year ended December 2023. The amended version of FRS 102, as issued in September 2024, ("FRS 102") has been early adopted upon transition together with additional disclosures as required by FRS 103 for Insurance Contracts. Management concluded that the Dignity business does not fall into the scope of long-term insurance business as outlined in section 3 of FRS 103 and as a result, recognition and measurement is not applicable. The judgment made by management in reaching the conclusion is disclosed on page 50.

The Company is a qualifying entity for the purposes of FRS 102, being a member of a group where the parent of that group prepares publicly available consolidated financial statements, including this Company, which are intended to give a true and fair view of the assets, liabilities, financial position and profit or loss of the group.

The Company has therefore taken advantage of exemptions from the following disclosure requirements for parent company information presented within the consolidated financial statements:

Section 4 'Statement of Financial Position': Reconciliation of the opening and closing number of shares;
Section 7 'Statement of Cash Flows': Presentation of a statement of cash flow and related notes and disclosures;
Section 11 'Basic Financial Instruments' and Section 12 'Other Financial Instrument Issues': Carrying amounts, interest income/expense and net gains/losses for each category of financial instrument; basis of determining fair values; details of hedges, hedging fair value changes recognised in profit or loss and in other comprehensive income;
Section 26 'Share-based Payment'- Share-based payment expense charged to profit and loss, reconciliation of opening and closing number and weighted average exercise price of share options, how the fair value of options granted was measured, measurement and carrying amount of liabilities for cash-settled share-based payments, explanation of modifications to arrangements; and
Section 33 'Related Party Disclosures': Compensation for key management personnel.

Basis of consolidation

The financial statements include the Company and entities it controls. Control exists when the Group can direct financial and operating policies to obtain economic benefits. Subsidiary results are consolidated from the date control is obtained, with intra-group balances eliminated. Identifiable assets and liabilities of acquired subsidiaries are recognised at fair value on the acquisition date.

DIGNITY GROUP HOLDINGS LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE PERIOD ENDED 26 DECEMBER 2025

1. Accounting policies (continued)

Business combinations

Business combinations are accounted for using the purchase method.

The cost of a business combination is the fair value at the acquisition date, of the assets given, equity instruments issued and liabilities incurred or assumed plus the costs directly attributable to the business combination.

Contingent consideration is initially recognised at an estimated amount where the consideration is probable and can be measured reliably. Where the contingent consideration is not considered probable or cannot be reliably measured but subsequently becomes probable and measurable or contingent consideration previously measured is adjusted, the amounts are recognised as an adjustment to the cost of the business combination.

Going concern

The Group's consolidated and Company financial statements are prepared on a going concern basis. Financial performance of the Group and the Securitisation Group has been forecast for a period through to 30 June 2027 (the 'going concern period') and this forecast ('base case') has been subjected to a number of sensitivities to create a severe but plausible downside scenario. A reverse stress test was also performed.

Key forecast drivers include expected death rates, funeral volumes, pricing and operating costs. The base case assumes volumes in line with 2025 experience, pricing adjustments consistent with inflationary pressures and stable operational performance. The forecast also reflects the full year rental impact of the 2025 crematoria sale and leaseback and national insurance increase, efficiencies already delivered, planned operating investment and wider economic factors such as wage inflation and business rates changes announced in the 2025 Autumn Statement.

Debt and liquidity

As of 26 December 2025, the Group held £25.3m of cash, excluding cash in the Trusts and amounts set aside for debt service payments including the prepayment of the Class A Notes. Ongoing funding from January 2026 onwards consists of:

Class B Notes with an outstanding principal of £356.4m (matures 31 December 2049) are listed on the Euronext Dublin. The terms and conditions for these Loan Notes are covered by an Issuer/Borrower Loan Agreement ('IBLA'). Coupon of 4.6956% is paid each year on 30 June and 31 December;
A £7.0m loan from Yellow (SPC) Midco Limited ('Midco Loan'), a related party, with PIK interest rate of 18% (matures 31 December 2033);
A £9.5m loan from Yellow (SPC) Bidco Limited, a related party, with PIK interest rate of 15.5% (matures 31 January 2035).

The related party loans have no restrictive covenants or charges and therefore do not affect the Group's capital structure. Although the Midco loan is callable on demand, the ultimate lender, Valderrama Limited, has confirmed it will not be recalled within the going concern period.

The Group expects to maintain sufficient liquidity to meet obligations through to 30 June 2027, supported by available cash, working capital management, planned investment, and driving a cash conversion aligned to historic levels.

Covenant test

As part of the conditions of the Loan Notes, the Securitisation Group is required to comply with a quarterly EBITDA: Debt Service Charge Ratio ('DSCR') covenant, tested on a last 12 month ('LTM') basis, of at least 1.5x. Following the full repayment of the Class A Notes, the minimum EBITDA required to meet the 2026 debt service cost of c.£17.0m is approximately £25.5m. In 2025 the DSCR was fully met as EBITDA generated in 2025 was significantly higher than 1.5x debt service cost, demonstrating a substantial headroom against the covenant threshold.

DIGNITY GROUP HOLDINGS LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE PERIOD ENDED 26 DECEMBER 2025

1. Accounting policies (continued)

Going concern (continued)

Severe but plausible downside scenario

When assessing the going concern assumption, the Directors considered the principal risks facing the Group and modelled a severe but plausible downside scenario. This scenario applied reductions to volumes (1% decline year on year), market share (falling 20bps in funerals and 10bps in cremations vs prior year) and underlying profitability driven by a 6% fall in attended funeral mix, together with cost inflation and other adverse operational conditions beyond those assumed in the base case. The scenario is severe in the context of prior performance and a base case that assumes no market share growth and assumes, when all factors are combined, deaths fall to a level below that seen in 2020. Even under this downside scenario, the Group continues to meet all debt service and covenant requirements. Further mitigating actions have also been identified to ensure liquidity remains sufficient to meet obligations throughout the assessment period.

Trust Funding

Trust annual solvency assessments continue to indicate adequate funding with solvency in excess of regulatory requirements, as detailed in the Strategic Report on page 3. While trust surpluses have previously been used to reduce external debt, no further surplus withdrawals are planned during the going concern period and based on valuation assumptions the trusts are expected to remain sufficiently funded for the foreseeable future.

In assessing the Group's ability to continue as a going concern, the Directors have considered the funding position of the pre-need funeral trusts consolidated within the Group accounts. This assessment included a review of the latest Solvency Assessment Reports dated 31 December 2024 and 31 December 2025 where relevant. Based on this review, the Directors concluded that the trusts are adequately funded, with solvency ratios in excess of the regulatory requirement of 110%, and therefore no mitigating action, including but not limited to, change in investment strategy or cash injections from Dignity Group are anticipated. Accordingly, the Directors are satisfied that the going concern basis of preparation remains appropriate.

Conclusion

Having evaluated the forecasts, covenants, downside sensitivities, liquidity and trust positions, the Directors are satisfied that the Group remains a going concern through to 30 June 2027.

Accounting for pre-need funeral plans acquired on business combinations

The fair values of funeral plan contract liabilities acquired on a business combinations have been estimated in line with the fair value measurement requirements of FRS 102 Section 2A, considering a market participant approach. The funeral plans can be cancelled on demand. Accordingly, the fair value of the contract liability reflects the higher of the estimation of the "cost to serve" (as explained below) and the refund liability.

The cost to serve a plan reflects estimates in respect of future cash outflows that a market participant would expect to incur in fulfilling the obligation to provide a funeral, inclusive of a risk margin to reflect the compensation for assuming the risks associated with providing the service as well as the likelihood of cancellation and the payouts on cancellation. Where applicable, it is adjusted for cash inflows (such as future instalments) expected to be received over the life of funeral plan. In some cases, the fair value of the future instalments may be such that the plan would have an overall positive fair value.

The cost of providing a funeral includes the directly attributable costs, salaries, merchandise, vehicles and disbursements payable to third parties. The duration of cashflows have been estimated based on the life expectancy of plan holders, adjusted to include the effect of inflation and time value of money using the Bank of England inflation curve and discounted using an interbank borrowing rate.

Where the refund liability exceeds the cost to serve (after taking into account future instalments), an intangible asset has been recognised to reflect that a market participants valuation would also give consideration to future cash inflows due from plan holders and the likelihood of cancellation. As a consequence, the intangible asset and associated contract/refund liability reflects the true fair value of the plan.

DIGNITY GROUP HOLDINGS LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE PERIOD ENDED 26 DECEMBER 2025

Accounting policies (continued)

Accounting for pre-need funeral plans acquired on business combinations (continued)

A significant financing component, is charged to the income statement as a finance cost each period until the performance obligation is satisfied, using the Dignity Group incremental borrowing rate determined at the acquisition date. This is charged based on the amount of the contract/refund liability (except to the extent that this exceeds the amounts that have been received from the customer).

In relation to the rescue plans, significant financing is only charged to the extent that Dignity (rather than the predecessor plans) received funds. No significant financing is charged on the receivables from the windup of the rescue trusts until such time as these amounts are received by the Group.

The intangible asset is amortised to the income statement at the event of plan cancellation or delivery of funeral. When the service prescribed by the plan is delivered, revenue equal to the contract liability is recognised in the Income Statement as well as any unamortised intangible asset.

If a customer cancels their plan, the contract liability and intangible asset are derecognised and the significant finance component is also released to the Income Statement.

Revenue

The Group recognises revenue from contracts with customers as follows:

At-need funerals and cremations

Revenue is recognised at the point services are delivered. Ancillary services are not treated as separate performance obligations. Memorial revenues are recognised when goods are supplied.

Any ancillary services provided as part of funeral as considered integral to the overall funeral services and do not constitute separate performance obligation. Therefore, revenue for the entire funeral package is recognised upon the delivery of the funeral services.

All revenue is shown exclusive of VAT.

Probate management revenue

Revenue arising from probate referral fees is recognised at the point in time when the Group satisfies its performance obligation by providing the third-party legal firm, acting as principal, with all information required to initiate the probate process in accordance with the referral agreement. Referral fees become payable once the third-party firm has received full payment of the client fee, with settlement timings differing between liquid and illiquid estates and subject to reductions where the firm is unable to recover the full client fee. The Group recognises a bad debt provision to reflect expected non-recoverability of client fees by the third-party firm. Subsequent receipts from the third-party firm are recognised as a reduction of accrued income.

Wills Revenue

Revenue from wills is recognised when the Group satisfies its performance obligation in accordance with the principles of FRS 102, based on the transfer of control of services to the customer. For individually purchased wills, revenue is recognised at the point in time the will is completed and delivered, as control transfers when the customer can use and benefit from the will and the Group has no remaining substantive obligations. Revenue from amendments is recognised separately when each amendment service is provided.

For wills supplied under charity-funded bulk arrangements, revenue is recognised when an individual redeems a charity-issued will code, as this is the point at which the Group becomes obliged to deliver the will-writing service. Amounts received in advance from charities are recorded as contract liabilities until the related code is redeemed or expires.

For wills sold with a 12-month amendment option under a subscription model, the initial will creation and ongoing amendment rights are treated as a single combined performance obligation reflecting the continuous stand-ready nature of the service. Revenue attributable to the will is recognised upon delivery, while a judgement has been made to recognise revenue relating to the amendment right evenly over the 12-month subscription period reflecting the fact that the customer could utilise the service at any point during that timeframe. Management has assessed that any financing component is not significant and therefore the transaction price is not adjusted for the time value of money.

DIGNITY GROUP HOLDINGS LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE PERIOD ENDED 26 DECEMBER 2025

Accounting policies (continued)

Revenue (continued)

Pre-arranged funeral plans
Trust for Age UK Plans, National Funeral Trust, UK Funeral (2022) Trust and Farewill Funeral Plans Limited Trust

The Group markets and sells pre-arranged funeral plans, with monies received from selling funeral plans being held, invested and controlled by the Trusts. The responsibility for the ultimate performance of funerals is allocated to Funeral Directors, who are selected by the beneficiary of the plan. The sale of a pre-arranged plan is considered to have a single performance obligation, fulfilled by the delivery of the funeral service.

Amounts received from plan holders are deferred on the statement of financial position within contract liabilities until the related funeral is performed or the plan cancelled. A customer could cancel the plan at anytime. Where, based on historic experience, the Group expects that a proportion of plans will be cancelled, the deferral takes the form of a refund liability which, under the terms of the plan, is held based on the fixed amount received on inception of the plan if a single payment or on each individual instalment received. For the majority of plans where the service as per the funeral plan is expected to be performed, the deferred amount is subject to adjustment to reflect a significant financing component.

This significant financing component, which has been calculated based on the expected discount rate that would be reflected in a separate financing transaction between the Group and the plan holder at contract inception, is charged to the income statement as a finance cost each period and as a contract liability until the performance obligation is satisfied at which point it is then credited to revenue. The discount rate applied is fixed for the duration of each plan at inception and is based on the estimated incremental borrowing rate of the Group at the time of each cash flow.

The amount deferred on the statement of financial position includes amounts paid by the plan holder, which, in addition to the plan consideration includes amounts in respect of disbursements (such as crematoria fees, burial plots, ministers' fees and doctors' fees). When the service prescribed by the plan is delivered, revenue is recognised equal to the deferred revenue balance related to the specific plan. When a plan is cancelled, revenue is recognised equal to the deferred revenue balance related to the specific plan, less the fixed refund due to the plan holder.

Dignity, contractually guarantees with the holder of a pre-arranged funeral plan that (i) if the plan holder chooses to cancel their selected funeral plan, a full refund will be made to them of all monies paid in respect thereof (less in certain cases an administration fee payable to the Dignity); (ii) the Funeral Directors services (as selected by the plan holder) will be provided regardless of price rises in the future; and (iii) for the majority of plans sold, specific disbursements (such as crematoria fees, ministers' fees and doctors' fees) will be provided regardless of price rises in the future; and (iv) any payments made for additional service(s) will be accepted as a contribution towards the cost of the additional service(s) and will rise in line with CPI whilst the plan remains active. Rescue plans are covered separately below on page 37.

As only the direct attributable costs in respect of the marketing of the pre-arranged funeral plans are commission payments, these are held as deferred commissions in the consolidated statement of financial position and recognised in the Group's consolidated income statement, within administration expenses, on the performance of a funeral (single performance obligation) or cancellation of the plan (if outside of a clawback period). Following Financial Authority ('FCA') regulation on 29 July 2022, no further commissions have been paid.

Contract liabilities and deferred commissions balances are split between current and non-current based on historical experience. All costs in respect of the administration of the pre-arranged funeral plans are expensed in the Group's consolidated income statement as incurred, within the funeral services segment.

Other trust plans

Revenue in respect of funeral services subject to pre-need plan arrangements associated with the other trusts is recognised on delivery of the underlying service at the amount paid from the other trusts to the Group.

DIGNITY GROUP HOLDINGS LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE PERIOD ENDED 26 DECEMBER 2025

1. Accounting policies (continued)

Revenue (continued)

Insurance plans

The Group is the named beneficiary on a number of life assurance products sold by third party insurance companies, in consideration for which the Group has committed to performing the funeral (including some disbursements) of the plan holder at a discount to its rates prevailing at the time of death.

Where a commission is paid to the insurers, these costs are carried as a prepayment and charged to the consolidated income statement as a funeral is performed. A provision for impairment is made to cover future expected cancellations and is assessed at each period end.

Where a commission is payable only on delivery of the funeral no amounts are recorded until the funeral is performed. Where a commission is payable in the future, before the delivery of the funeral, a discounted liability is recognised on the consolidated statement of financial position. To the extent a funeral is expected to be delivered a corresponding asset is recognised.

In the event of the death of the policyholder, if the Group performs the funeral, it receives an agreed amount from the insurers which is recognised as revenue within the funeral services division. On occasions a third party will perform the funeral and the Group will pass on all monies received to that party and in this situation the Group is deemed to be acting as an agent and revenue is treated as pass through revenue and not grossed up within the consolidated income statement.

Contract liabilities

Contract liabilities represent the amounts received from plan holders deferred on the statement of financial position until the related funeral is performed, or the plan cancelled. The customers can cancel the plans at any time. Where, based on historic experience, the Group expects that a proportion of plans will be cancelled, the deferral takes the form of a refund liability which, under the terms of the plan, is held based on the fixed amount received on inception of the plan if a single payment or on each individual instalment received. For the majority of plans where the service as per the funeral plan is expected to be performed, the deferred amount is subject to adjustment to reflect a significant financing component.

Rescue plans

Until 2024, Dignity supported customers whose previous plan providers were unable to meet FCA requirements by facilitating the transfer of their plans onto Dignity arrangements. As at 26 December 2025, 46,000 rescue plans were active (2024: 57,000). Refunds on cancellation are capped at amounts received by Dignity from prior trusts.

DIGNITY GROUP HOLDINGS LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE PERIOD ENDED 26 DECEMBER 2025

Accounting policies (continued)

Rescue plans (continued)

A significant financing component is applied where applicable. Plans expected to be loss-making are assessed individually under FRS 102 Section 21. Expected inflows include instalments, transferred trust assets and memorial revenue; outflows include funeral delivery costs after accreting the expected cash outflows using the significant financing component used for the individual contract, consistent with the accounting methodology adopted for contract liabilities. For plans that have commenced paying direct debits to Dignity, a contract liability is recognised for the instalments received and accreted at the significant financing component at that date in accordance with the Group's accounting policy. Exit costs are not relevant given the nature of the business.

Dignity Promise

All funeral plans sold by Dignity include a feature that if the pre-need funeral plan is payable by 13 or more monthly payments and provided at the time of death all payments due under the plan are up to date, Dignity will perform the funeral even if there is shortfall in plan value compared with total amount paid; the 'Dignity Promise'. This promise applies to all post FCA funeral plans, including Rescue plans (back dated to the date a customer took out their plan with the previous provider). Dignity now provides this benefit to customers free of charge and as such a provision for the cost of £0.9m (2024: £1.2m) has been included in these financial statements. This is estimated based on actual experience of a claim rate of 4.4% (2024: 2.6%) derived from pre-need plans sold by Age UK Funeral Plans & National Funeral Trust and an average shortfall between the cost of delivering a funeral and the payments received of £1,100 (2024: £700).

For plans sold between 1 October 2019 and 29 July 2022, the cost of unpaid instalments where a customer qualified for the Dignity Promise were covered by an insurance product. A provision of £0.2m (2024: £0.3m) has been recognised in these financial statements with a corresponding financial asset, to recognise the fact that Dignity will receive any instalment shortfalls from the insurance provider.

Retirement Benefits

Defined Contribution Plans

Contributions are expensed as incurred.

Defined Benefit Plans

Defined benefit obligations are measured annually by independent actuaries using the projected unit method and discounted using high-quality corporate bond yields. Remeasurements are recognised in other comprehensive income, while service costs and net interest are recognised in profit or loss.

During the period 6 April 2012 to 5 April 2016 the Scheme was contracted-out of the State Second Pension on a 'Reference Scheme' basis. The Scheme is closed to new entrants but open to future accrual.

Changes in the present value of the defined benefit obligation resulting from plan amendments, curtailments or one-off adjustment such as GMP equalisation are recognised immediately in the consolidated income statement as a past service cost.

A surplus would be recognised as a net defined benefit asset to the extent that it is considered recoverable.

Taxation

The tax expense represents the sum of the current tax expense and deferred tax expense. Current tax assets are recognised when tax paid exceeds the tax payable.

Current tax is based on taxable profit for the year, with tax assets and liabilities measured using tax rates that have been enacted or substantively enacted by the reporting date.

Deferred tax is calculated at the tax rates that are expected to apply to the period when the asset is realised or the liability is settled. Deferred tax liabilities are recognised in respect of all timing differences that exist at the reporting date. Timing differences are differences between taxable profits and total comprehensive income that arise from the inclusion of income and expenses in tax assessments in different periods from their recognition in the financial statements.

DIGNITY GROUP HOLDINGS LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE PERIOD ENDED 26 DECEMBER 2025

Accounting policies (continued)

Taxation (continued)

Deferred tax assets are recognised only to the extent that it is probable that they will be recovered by the reversal of deferred tax liabilities or other future taxable profits.

Deferred tax is recognised on income or expenses from subsidiaries and associates that will be assessed to or allow for tax in a future period except where the Group is able to control the reversal of the timing difference and it is probable that the timing difference will not reverse in the foreseeable future.

Deferred tax is recognised on differences between the value of assets (other than goodwill) and liabilities recognised in a business combination accounted for using the purchase method and the amounts that can be deducted or assessed for tax, considering the manner in which the carrying amount of the asset or liability is expected to be recovered or settled. The deferred tax recognised is adjusted against goodwill or negative goodwill.

Current and deferred tax, other than the tax effects of distributions to owners, is charged or credited in profit or loss, except when it relates to items charged or credited to other comprehensive income or equity, when the tax follows the transaction or event it relates to and is also charged or credited to other comprehensive income, or equity.

The tax expense or income effects of distributions to owners are recognised in profit or loss.

Current tax assets and current tax liabilities and deferred tax assets and deferred tax liabilities are offset, if and only if, there is a legally enforceable right to set off the amounts and the entity intends either to settle on a net basis or to realise the asset and settle the liability simultaneously.

A deferred tax asset is regarded as recoverable and therefore recognised only when, on the basis of all available evidence, it can be regarded as more likely than not that there will be suitable taxable profits from which the future reversal of the deductible temporary difference can be utilised.

Dividends

Dividend distributions to the Company's shareholders are recognised as a liability in the financial statements in the period in which they are approved by the Company's shareholders. Interim dividends are recorded in the financial statements when paid.

Intangible assets – goodwill

Goodwill represents the excess of the fair value of the consideration paid and directly attributable costs of the purchase consideration over the fair value of the net assets acquired and liabilities assumed.

Goodwill is amortised evenly over its expected useful life, which is estimated to be 10 years. This represents the period over which the goodwill is expected to give rise to economic benefits.

Intangible assets (other than goodwill)

Software

Where purchased computer software is not an integral part of a related item of computer hardware, the software is treated as an intangible asset. Acquired computer software licences are capitalised on the basis of costs incurred to acquire and bring into use the specific software.

The Group capitalises development expenditure as an intangible asset if the costs are directly associated with the production of identifiable and unique software products, the asset is controlled by the Group, and it is probable that future economic benefits will flow to the Group. Capitalised costs include internal employee costs and external consultants.

Capitalised costs are amortised over their estimated useful lives (three to eight years) using the straight-line method.

Use of third-party brand name

The Group had a marketing agreement with Age UK Enterprises Limited, giving rights to market pre-arranged funeral plans under the Age UK brand. The value of this right has been recognised as a separate intangible asset. The decision was taken to fully impair this asset in the prior year as no funeral plans are currently being sold under this marketing agreement.

DIGNITY GROUP HOLDINGS LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE PERIOD ENDED 26 DECEMBER 2025

1. Accounting policies (continued)

Intangible assets (other than goodwill)

Other intangible assets

Intangible assets arising on a business combinations are recognised separately from goodwill if the intangible asset is both separable and arises from legal or contractual rights.

Trade names

Trade names are recognised as assets at the estimated fair value of the consideration paid to acquire them and are carried at historical cost less amortisation and provisions for impairment. The fair value is calculated by reference to the estimated incremental cash flows expected to arise by virtue of the trade name being well-established.

Trade names are amortised over 35 years. This is reviewed annually.

Tangible fixed assets

Tangible fixed assets are initially recorded at cost and subsequently measured at cost less depreciation and any impairment losses. Cost includes, where appropriate, directly attributable costs incurred in bringing each asset to its present location and condition.

Depreciation is charged so as to write-off the costs of assets to their estimated residual value (excluding freehold land and assets in the course of construction), over their expected useful lives using the straight-line method.

The bases and annual depreciation rates in use for the various classes of assets are as follows:

Freehold and long leasehold premises	2%-10%
Short leasehold premises (Includes lease improvements and other items on lease)	Over term of lease
Motor vehicles	7%-20%
Computers	20%
Other plant and equipment	5%-33%
Fixtures and fittings	15%

Freehold land is not depreciated on the basis that land has an indefinite life. Where the historical cost of land and buildings cannot be split, the Directors have estimated that the historical cost attributable to land is one third (based on historical data) of the original cost of acquiring the land and buildings.

Major renovations of the Group's trading premises and cremator re-linings are capitalised and depreciated over the remaining life of the related asset or to the estimated date of the next major renovation or cremator re-lining, whichever is sooner. Asset lives and residual values for each class of asset are reviewed annually and adjusted if appropriate at each statement of financial position date.

Assets in the course of construction are shown as work in progress at a value equal to costs incurred to date. Once completed, they are reclassified and depreciated using the Group's depreciation policy above.

Borrowing costs

General and specific borrowing costs directly attributable to the acquisition, construction or production of qualifying assets, which are assets that necessarily take a substantial period of time to get ready for their intended use or sale, are added to the cost of those assets, until such time as the assets are substantially ready for their intended use or sale.

All other borrowing costs are recognised in profit or loss in the period in which they are incurred.

Repairs and renewals

All repairs and renewals are charged to the income statement unless they represent an enhancement to the original asset.

DIGNITY GROUP HOLDINGS LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE PERIOD ENDED 26 DECEMBER 2025

1. Accounting policies (continued)

Tangible fixed assets (continued)

Profit (or loss) on sale of fixed assets

Gains and losses on disposals are determined by comparing the proceeds with the carrying amount and are recognised within profit (or loss) on sale of fixed assets in the Income statement.

Right-of-use assets and lease liabilities

At inception of a contract the Group assesses whether the contract is or contains a lease. A lease is present where the contract conveys, over a period of time, the right to control the use of an identified asset in exchange for consideration.

Where a lease is identified the Group recognises a right-of-use asset and a corresponding lease liability, except for short-term leases (leases with a lease term of 12 months or less, which do not contain a purchase option) and leases of low-value assets which are expensed as incurred.

Right-of-use assets

The Group recognises right-of-use assets at the commencement date of the lease. The cost of the asset comprises the following and disclosed as necessary:

initial measurement of the corresponding lease liability;
initial direct costs;
any lease payments made at or before the commencement date, less any lease incentives received; and
an estimate of costs to be incurred by the lessee in dismantling and removing the underlying asset, restoring the site on which it is located or restoring the underlying asset to the condition required by the terms and conditions of the leases, unless the costs are incurred to produce stock.

They are subsequently measured at cost less accumulated depreciation and impairment losses.

The right-of-use asset is presented as a separate line in the consolidated statement of financial position.

Right-of-use assets are depreciated on a straight-line basis over the shorter of its estimated useful life and the lease term. Right-of-use assets are subject to impairment under Section 27, Impairment of Assets.

Lease liabilities

At the commencement date of the lease, the Group recognises lease liabilities measured at the present value of lease payments to be made over the lease term. The lease payments include fixed payments (including in-substance fixed payments) less any lease incentives receivable, variable lease payments that depend on an index or a rate, and amounts expected to be paid under residual value guarantees. The variable lease payments that do not depend on an index or a rate are recognised as expense in the period in which the event or condition that triggers the payment occurs.

In calculating the present value of lease payments, the Group uses the incremental borrowing rate at the lease commencement date. After the commencement date, the amount of lease liabilities is increased to reflect the accretion of interest and reduced for the lease payments made. In addition, the carrying amount of lease liabilities is remeasured if there is a modification, a change in the lease term, a change in the in-substance fixed lease payments or a change in the assessment to purchase the underlying asset.

Short-term leases and leases of low-value assets

The Group applies the short-term lease recognition exemption to its short-term leases (defined as leases with a lease term of 12 months or less). It also applies the lease of low-value assets recognition exemption to leases that are considered of low-value. Lease payments on short-term leases and leases of low-value assets are recognised as operating expense on a straight-line basis over the lease term.

Sale and leaseback

Where the Group sells an asset and immediately reacquires the right to use it by entering into a lease with the buyer, the accounting reflects whether control of the asset has transferred to the buyer through the transfer of the substantial risks and rewards of ownership. A lease liability is recognised, the associated property, plant and equipment asset is derecognised, and a right-of-use asset is recognised based on the proportion of the previous carrying amount that relates to the right retained. Any gain or loss arising relates to the rights transferred to the buyer.

DIGNITY GROUP HOLDINGS LIMITED

NOTES TO THE FINANCIAL STATEMENTS

FOR THE PERIOD ENDED 26 DECEMBER 2025

Accounting policies (continued)

Right-of-use assets and lease liabilities (continued)

Sale and leaseback

Where control has not transferred, the transaction is accounted for as a financing arrangement and the asset is not derecognised.

Impairment of fixed assets

The carrying values of intangible assets, right-of-use assets and property, plant and equipment are reviewed for impairment in periods where events or changes in circumstances indicate that the carrying value may not be recoverable. Assets that have an indefinite useful life (e.g., goodwill) are not subject to amortisation and are tested annually for impairment.

Where an asset does not generate cash flows that are independent from other assets, the Group estimates the recoverable amount of the cash-generating unit to which the asset belongs. For goodwill, Farewill software and Farewill brand name this is considered at a business segment level as that is the level at which the return on assets acquired is monitored. For other non-current assets this is considered at a business unit or cluster level, which includes a number of branches as this is the lowest level at which independent cashflows can be identified.

Recoverable amount is the higher of fair value less costs of disposal and value-in-use. The value-in-use calculations use cash flow projections based on the latest forecast. Key assumptions used to produce the forecasts are managements estimated death rates (based on forecast death rates supplied by the ONS), anticipated funeral and cremation volumes, average revenues driven by pricing and the product mix between attended funerals and unattended funerals and medium and long-term growth rates. The value-in-use calculations for the December 2025 model are based off actual performance for the year to December 2025 adjusted for rollover of known price increases less salary inflation. For both Funerals and Crematoria business segments the 2026 forecast assumes death rates are aligned to ONS figures by 2027 and increased in line with ONS movements thereafter. Funeral and Crematoria volumes are forecasted to move in line with projected death rate; at the point in time when ONS growth is less than cost inflation, cost inflation is assumed.

These cash flows are discounted at rates that management estimates to be the risk affected average cost of capital for the particular segment and compared to the carrying value of the relevant asset. Any impairment in the value of an asset below its carrying value is charged to the income statement within operating profit. A reversal of an impairment loss is recognised in the income statement when there is indication that an impairment loss recognised in prior periods may no longer exist or may have decreased. Recognition is to the extent that the original loss was recognised, net of the amortisation or depreciation that would have been charged. Any impairment loss recognised for goodwill will not be reversed.

Fixed asset investments

Fixed asset investments are stated at historical cost, less provision for impairment.

Interests in subsidiaries and associates are assessed for impairment at each reporting date. Any impairments losses or reversals of impairment losses are recognised immediately in profit or loss.

Investments in associates

An associate is an entity over which the Group has significant influence. Significant influence is the power to participate in the financial and operating policy decisions of the investee, but it is not control or joint control over those policies.

The Group's investment in an associate is accounted for using the equity method. The investment is initially recorded at cost and the carrying amount is adjusted to recognise changes in the Group's share of net assets of the associate since the acquisition date and any recognised impairment.

Stock

Stock, which comprise funeral supplies and monumental masonry, are stated at the lower of cost and net realisable value. Cost includes all directly attributable costs incurred in bringing each product to its present location and condition. Net realisable value is based on estimated selling price less any further costs expected to be incurred in completion and sale.

DIGNITY GROUP HOLDINGS LIMITED

NOTES TO THE FINANCIAL STATEMENTS

FOR THE PERIOD ENDED 26 DECEMBER 2025

1. Accounting policies (continued)

Cash and cash equivalents

Cash and cash equivalents comprise cash in hand and on demand deposits and amounts included in accounts restricted for specific uses. Cash held in accounts restricted for specific uses is excluded from cash for the purpose of the cashflow statement in accordance with FRS 102. Cash and cash equivalents have an original maturity of three months or less, are subject to insignificant changes in value and are readily convertible into known amounts.

Provisions

Provisions are recognised when the Group has a present obligation (legal or constructive) as a result of a past event, where it is probable that a transfer of economic benefits will be required to settle the obligation and where a reliable estimate can be made of the amount of the obligation.

Provisions (other than deferred tax) are discounted where the present value of the provision is materially different to the undiscounted value. The unwinding of discounts is included within finance costs.

Financial instruments

The Group has elected to apply the provisions of FRS 102 Section 12.2(c), the recognition and measurement provisions of IFRS 9 Financial Instruments and the disclosure requirements of Sections 11 and 12 and the presentation requirements of paragraphs 11.38A and 12.25W.

Recognition and measurement of financial instruments

Financial assets and financial liabilities are recognised when the Group becomes a party to the contractual provisions of the instrument.

Classification of financial instruments

Financial instruments are classified as liabilities and equity instruments according to the substance of the contractual arrangements entered into. An equity instrument is any contract that evidences a residual interest in the assets of the Group after deducting all of its liabilities.

Financial assets

Trade and other debtors

Trade debtors are initially recognised at fair value and subsequently measured at amortised cost using the effective interest method, less any allowance for expected credit losses. Trade debtors are generally due for settlement within 30 days.

The Group has applied the simplified approach to measuring expected credit losses, which uses a lifetime expected loss allowance. To measure the expected credit losses, trade debtors have been grouped based on days overdue.

Other debtors are recognised at amortised cost, less any allowance for expected credit losses.

Investments and other financial assets

Investments and other financial assets are initially measured at fair value. Transaction costs are included as part of the initial measurement, except for financial assets at fair value through profit or loss. Such assets are subsequently measured at either amortised cost or fair value depending on their classification. Classification is determined based on both the business model within which such assets are held and the contractual cash flow characteristics of the financial asset unless an accounting mismatch is being avoided.

Financial assets are derecognised when the rights to receive cash flows have expired or have been transferred and the consolidated entity has transferred substantially all the risks and rewards of ownership. When there is no reasonable expectation of recovering part or all of a financial asset, its carrying value is written off.

Financial assets held by Trusts

The Group measures financial assets held by the Trusts at fair value and discloses fair values for all other financial assets and liabilities at each statement of financial position date.

Fair value related disclosures are set out in Note 26 in respect of financial instruments.

DIGNITY GROUP HOLDINGS LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE PERIOD ENDED 26 DECEMBER 2025

Accounting policies (continued)

Financial instruments (continued)

Financial Assets (continued)

Fair value is the price that would be received to sell an asset or paid to transfer a liability measured using the assumptions that market participants would use.

The Group uses valuation techniques that are appropriate in the circumstances and for which sufficient data is available to measure fair value, maximising the use of relevant observable inputs and where required the use of unobservable inputs.

Financial assets at fair value through profit or loss

Financial assets not measured at amortised cost or at fair value through other comprehensive income are classified as financial assets at fair value through profit or loss. Typically, such financial assets will be either: (i) held for trading, where they are acquired for the purpose of selling in the short-term with an intention of making a profit, or a derivative; or (ii) designated as such upon initial recognition where permitted. Fair value movements are recognised in profit or loss.

Impairment of financial assets

The Group recognises a loss allowance for expected credit losses on financial assets which are either measured at amortised cost or fair value through other comprehensive income.

Impairment of financial assets (continued)

The measurement of the loss allowance depends upon the consolidated entity's assessment at the end of each reporting period as to whether the financial instrument's credit risk has increased significantly since initial recognition, based on reasonable and supportable information that is available, without undue cost or effort to obtain.

Where there has not been a significant increase in exposure to credit risk since initial recognition, a 12-month expected credit loss allowance is estimated. This represents a portion of the asset's lifetime expected credit losses that is attributable to a default event that is possible within the next 12 months. Where a financial asset has become credit impaired or where it is determined that credit risk has increased significantly, the loss allowance is based on the asset's lifetime expected credit losses.

The amount of expected credit loss recognised is measured on the basis of the probability weighted present value of anticipated cash shortfalls over the life of the instrument discounted at the original effective interest rate.

For financial assets mandatorily measured at fair value through other comprehensive income, the loss allowance is recognised in other comprehensive income with a corresponding expense through profit or loss. In all other cases, the loss allowance reduces the asset's carrying value with a corresponding expense through profit or loss.

Financial liabilities

Trade creditors

These amounts represent liabilities for goods and services provided to the Group prior to the end of the financial year and which are unpaid. Due to their short-term nature, they are measured at amortised cost and are not discounted.

Borrowings

Loans and borrowings are initially recognised at the fair value of the consideration received, net of transaction costs. They are subsequently measured at amortised cost using the effective interest method.

DIGNITY GROUP HOLDINGS LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE PERIOD ENDED 26 DECEMBER 2025

Accounting policies (continued)

Financial instruments (continued)

Fair value measurement

When an asset or liability, financial or non-financial, is measured at fair value for recognition or disclosure purposes, the fair value is based on the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date; and assumes that the transaction will take place either: in the principal market; or in the absence of a principal market, in the most advantageous market.

Fair value is measured using the assumptions that market participants would use when pricing the asset or liability, assuming they act in their economic best interests. For non-financial assets, the fair value measurement is based on its highest and best use. Valuation techniques that are appropriate in the circumstances and for which sufficient data are available to measure fair value, are used, maximising the use of relevant observable inputs and minimising the use of unobservable inputs.

Assets and liabilities measured at fair value are classified into three levels, using a fair value hierarchy that reflects the significance of the inputs used in making the measurements. Classifications are reviewed at each reporting date and transfers between levels are determined based on a reassessment of the lowest level of input that is significant to the fair value measurement.

For recurring and non-recurring fair value measurements, external valuers may be used when internal expertise is either not available or when the valuation is deemed to be significant. External valuers are selected based on market knowledge and reputation.

Where there is a significant change in fair value of an asset or liability from one period to another, an analysis is undertaken, which includes a verification of the major inputs applied in the latest valuation and a comparison, where applicable, with external sources of data.

Equity

Equity instruments

Financial instruments classified as equity instruments are recorded at the fair value of the cash or other resources received or receivable, net of transaction costs, unless the equity instruments are issued to extinguish a financial liability due to a shareholder or a party under common control, or in accordance with the original terms of the financial liability.

Derecognition of financial assets and liabilities

A financial asset is derecognised when the rights to receive cash flows from the asset have expired or the Group has transferred its rights to receive cash flows from the asset and has either transferred substantially all the risks and rewards of the asset or has neither transferred nor retained substantially all the risk and rewards of the asset but has transferred control of the asset.

A financial liability (or part thereof) is derecognised when the obligation specified in the contract is discharged, cancelled or expires.

Prior Year restatements

Rescue provision

During the year, management identified an error in the Group's onerous rescue provision model, whereby instalments paid directly to Dignity by customers who had transferred from ceding trusts since 2023 were not included in the onerous provision assessment. As a result, the provision was incorrectly increased during 2023 and 2024, whereas it should have reduced when taking account of customer deaths and cancellations.

This error resulted in the provision being overstated by £4.6m, with the related deferred tax asset understated by £1.2m, as at 27 December 2024.

In accordance with FRS 102 Section 10, the error has been corrected retrospectively, with comparative figures restated and the opening balance sheet for the earliest comparative period adjusted. A reconciliation of reported to restated prior period comparatives is presented in Note 39.

DIGNITY GROUP HOLDINGS LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE PERIOD ENDED 26 DECEMBER 2025

Accounting policies (continued)

Prior Year restatements

Deferred Income

During the year, management identified an error in the deferred income models whereby the significant financing component for customers paying monthly was calculated using the interest rate applicable at each payment date rather than the rate prevailing when the plan holder first entered the plan, as required by FRS 102 Section 11. This resulted in deferred income being understated by £18.1m and the related deferred tax asset understated by £4.5m as at 27 December 2024.

In accordance with FRS 102 Section 10, the error has been corrected retrospectively, with comparative figures restated and the opening balance sheet of the earliest comparative period adjusted. A reconciliation of reported to restated prior period comparatives is provided in Note 39.

Judgements and key sources of estimation uncertainty

The preparation of the financial statements requires Directors to apply judgements, estimates and assumptions that affect reported amounts of assets and liabilities. These are based on historical experience and other relevant factors. Actual outcomes may differ. Estimates and assumptions are reviewed on an ongoing basis, with changes recognised in the period of revision and, where applicable, future periods.

Critical judgements

The following judgements (apart from those involving estimates) have had the most significant effect on amounts recognised in the financial statements.

Consolidation of pre-need trusts

The Group markets and sells pre-arranged funeral plans, with monies received from selling funeral plans being held and invested by pre-arranged funeral plan trusts. These financial statements reflect the consolidation of the two principal pre-arranged funeral plan trusts being the Trust for Age UK Plans and the National Funeral Trust (together the 'Trusts'). Since becoming FCA regulated on 29 July 2022, no further plans have been sold under these two trusts.

The Group now markets and sells pre-arranged funeral plans, with monies received from selling funeral plans being held and invested by a newly formed pre-arranged funeral plan trust called the UK Funerals (2022) Trust (UKFT) and its subsidiary called Dignity Limited Trust Fund formed in March 2024. UKFT and its subsidiary have been set up based on a similar structure as the existing trusts and these financial statements also reflect the consolidation of these two trusts.

Chapter 9 of FRS 102 is built on existing principles by identifying the concept of control as the determining factor on whether an entity should be included in the consolidated financial statements of the parent company. In order to have control, Chapter 9 requires a parent company to have power over the entity, through which parent company can govern the financial and operating policies of an entity so as to obtain benefits from its activities.

The decision as to whether to consolidate these Trusts is a matter of significant judgement in respect of which the Group believes that informed individuals could reach alternative conclusions. The Group concluded as part of its 2019 period end that more weight should be attributed to its ability to appoint and remove trustees and less to the legislative requirement for a majority of trustees to be unconnected with Dignity. As a result, the Group reached a judgement, the basis of which is summarised below, that it does have control as defined by Chapter 9 and therefore those pre-arranged funeral plan trusts where it has the ability to appoint and remove trustees are now consolidated.

Whether to consolidate the Trusts or not remains a key judgement and the basis of this judgement reflected in these financial statements is summarised in the table below. The table relates solely to the three principal trusts which are consolidated and for the purpose of the table, 'Dignity' refers to the Group excluding the Trusts.

DIGNITY GROUP HOLDINGS LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE PERIOD ENDED 26 DECEMBER 2025

Judgements and key sources of estimation uncertainty (continued)

Critical judgements (continued)

Consolidation of pre-need trusts (continued)

Chapter 9 consideration	Analysis
Power over more than half of the voting rights by virtue of an agreement with the investors;	Whilst Dignity has no voting rights over the Trusts or any rights to direct the activities of the Trusts, it does have the power to appoint and remove a majority of trustees. Whilst legislation requires the majority of trustees to be unconnected with Dignity this right does not prevent Dignity removing a majority of the trustees from office such that on balance it is considered that Dignity is able to control the actions of the trustees who in turn control the investment decisions of the Trust and negotiate with Dignity the marketing allowance paid to Dignity on behalf of the Trust.
Power to appoint or remove the majority of the members of the board of directors or equivalent governing and operating policies of the entity is by that board or body; or	Historically, Dignity established the level of funeral cover and negotiated the level of marketing allowance with the Trustees on an annual basis for the two long established Trusts. Going forward, Dignity will continue to negotiate the level of funeral cover payments made from the Trusts on an annual basis which in turn impacts the Trusts assets.
Power to cast the majority of votes at meetings of the board of directors or equivalent governing body and control of the entity is by that board or body.	Dignity received an allowance from the Trusts for the marketing of the plans in the Trust for the Age UK Funeral Plans and the National Funeral Trust; however, this stopped following FCA registration and plans were no longer sold through these Trusts. The Group continues to receive an allowance for administration cost and for the performance of a funeral from these two Trusts. From time-to-time Dignity may receive a surplus from these two Trusts.
Power to govern the financial and operating policies of the entity under an agreement.	Under FCA regulation, the Group will receive an allowance for the performance of a funeral and may only withdraw a surplus from the Trusts if the solvency level of the Trust is above 110 per cent when calculated on a best estimate basis and the withdrawal has been approved by an actuary who is a fellow of the Institute and Faculty of Actuaries. Certain administration costs fall within the definition of permitted payments and do not require a withdrawal from surplus to recover.
	Ultimately Dignity's return is wholly dependent on the amounts held for investment in the Trusts and the investment performance of the Trusts.
	The investment strategy is set, implemented and monitored by the Trustees. Consequently, as Dignity is on balance considered to control the actions of the Trustees, Dignity has the power to govern the financial and operating policies of the Trusts and influence the amount of its returns.

For other, smaller trusts from which Dignity receives funeral cover in the event that Dignity delivers a funeral service, the judgement is that the Group has no power over the actions of the investee as Dignity does not have the ability to appoint or remove trustees and consequently does not have the ability to govern the operating and financial policies. Further, as these trusts do not accept new plans and the level of funeral cover paid by these trusts is derived based on the value of trust assets and the number of remaining open funeral plans alone, Dignity has no wider ability to affect its benefits available from these trusts. Consequently, Dignity is unable to use its power to influence its benefits, such that the Group is not considered to control these trusts and therefore these trusts are not consolidated.

DIGNITY GROUP HOLDINGS LIMITED

NOTES TO THE FINANCIAL STATEMENTS

FOR THE PERIOD ENDED 26 DECEMBER 2025

2. Judgements and key sources of estimation uncertainty (continued)

Critical judgements (continued)

Consolidation of pre-need trusts (continued)

During the year, Dignity acquired Farewill Ltd, which includes Farewill Funeral Plans Limited Trust. The assessment of whether this trust should be consolidated represents a significant judgement in preparing these financial statements. Management has evaluated the substance of the Group's relationship with this trust, including the extent of control, exposure to variable returns and the ability to direct relevant activities.

Based on this assessment, management concluded that this trust does meet the criteria for consolidation, as the Group is deemed to have the power to govern this trust's financial and operating policies and has substantive rights to its residual returns. Below are the factors considered by management.

Chapter 9 consideration	Analysis
Power over more than half of the voting rights by virtue of an agreement with the investors;

Power to appoint or remove the majority of the members of the board of directors or equivalent governing and operating policies of the entity is by that board or body; or

Power to cast the majority of votes at meetings of the board of directors or equivalent governing body and control of the entity is by that board or body.

Power to govern the financial and operating policies of the entity under an agreement. | The Trust Deed grants Farewill Funerals Ltd the power to appoint and remove trustees, giving it the ability to influence the composition of the governing body. Although no more than half of trustees may be "connected persons," key protective rights remain with the Farewill Funerals Limited, including the requirement for joint execution of any amendments to the Trust Deed and the need for Company consent for transfers of funds to other trusts.

The Trust deed also specifies that the appointment and oversight of professional advisers including actuaries and investment advisers requires prior Farewill Funerals Limited approval further demonstrating substantive power over relevant activities. |
| Power to govern the financial and operating policies of the entity under an agreement. | Farewill Funerals Ltd is directly exposed to variable returns and has responsibilities linked to the fund's performance. It may request payment of actuarial surpluses and bears the risk of deficits by being required to implement plans to remedy shortfalls. In addition, the Company indemnifies the custodian trustees against liabilities (other than those arising from gross negligence, wilful default or fraud), evidencing that it absorbs risk and return variability. These rights and obligations demonstrate the Company's practical ability to affect the Trust's financial outcomes.

Farewill Funerals Ltd's entitlement to surplus distributions and obligation to support deficits shows direct exposure to the Trust's variable returns. Its contractual powers for example appointment or removal of trustees, consent rights, and influence over investment and advisory arrangements enable it to affect decisions that impact those returns. Together, these factors meet the FRS 102 definition of control, as the Company both (i) has power over relevant activities and (ii) is exposed to variable returns that it can influence through that power. |

DIGNITY GROUP HOLDINGS LIMITED

NOTES TO THE FINANCIAL STATEMENTS

FOR THE PERIOD ENDED 26 DECEMBER 2025

Judgements and key sources of estimation uncertainty (continued)

Critical judgements (continued)

Deferred revenue and associated significant financing

The significant financing component is based on estimates made in respect of the enlarged Group's (to include the Trusts) incremental borrowing rate at the time of inception of each funeral plan. A management judgement is made on Incremental Borrowing Rate (IBR) for the Group and its subsidiaries. Once established, the rate applied to a plan is fixed for the duration of the plan. Given the rates are fixed at inception, there is no further estimation uncertainty on these cash flows, and therefore no further sensitivity disclosures are applied as for more recent cash flows in respect of 2024 and 2025, the estimate of the Group's (including the Trusts) incremental borrowing rate contains less estimation uncertainty.

Allocation of goodwill to cash generating units (CGUs)

Goodwill arising from the acquisition of Farewill has been allocated to funeral and legal services which are the two main cash generating units that are expected to benefit from the synergies arising from the business combination. These two have been identified as smallest identifiable group of assets which generates independent cashflows and is consistent with internal reporting to the board and management on performance. In addition, resource allocation is determined based on performance of the two cash generating units. Management made a judgement to allocate goodwill for the two CGUs based on revenue proportions generated by each CGU. See note 37 for further details.

Equity instruments issued by other Group companies.

Management exercised judgement in determining the acquirer in the business combination, as equity instruments were issued by Castelnau and Valderamma as part of the mechanism to acquire Farewill Limited. Although these equity instruments were issued by fellow group entities in exchange for loan notes, management assessed whether these entities were acting on behalf of Dignity Ventures Limited and whether the instruments formed part of the substantive consideration under FRS 102. Based on this assessment, management concluded that the shares issued by Castelnau and Valderamma did not represent purchase consideration but were issued solely in exchange for the original loan notes that Dignity Ventures Limited had issued to acquire the entire share capital of Farewill Limited. Accordingly, management determined that Dignity Ventures Limited was the acquirer.

FRS 103 applicability to the Group

The Group has pre-need funeral plans which are specifically listed as an example of insurance contracts under FRS 103, therefore the Group falls within the scope of FRS 103. As a result, the following sections of FRS 103 are applicable to the Group;

Section 2-Accounting policies, recognition and measurement.
Section 4- Disclosure
Section 6-Transition to FRS.

FRS 103 requirements for disclosures and accounting policies apply to all entities applying FRS 103.

The definition of 'long-term insurance business under FRS 103 is based on the UK regulatory definition of contracts of long-term insurance. They are insurance contracts (including reinsurance) falling within one of the classes of insurance specified in Part II of Schedule 1 to the Financial Services and Markets Act 2000 (Regulated Activities) Order 2001 (SI 2001/544. Management obtained legal advice and concluded that none of the classes of insurance specified in the schedule covers the pre-need funeral plans that the Group offers to its customers. Given that pre-need plans are specifically scoped out of the legislation (as defined under Article 3(1) of the RAO), management concluded that the accounting recognition and measurement requirements under section 3 of FRS 103 do not apply to the Group

Management considered the requirements of section 2 of FRS 103 which allows the Group to apply paragraph 10.4 of FRS 102 which provides guidance when FRS does not specifically address a transaction, other event, or condition. It requires management to use its judgement in developing and applying an accounting policy that results in information that is most useful to the users of the accounts. Below is management assessment of each principle.

DIGNITY GROUP HOLDINGS LIMITED

NOTES TO THE FINANCIAL STATEMENTS

FOR THE PERIOD ENDED 26 DECEMBER 2025

2. Judgements and key sources of estimation uncertainty (continued)

Critical judgements (continued)

FRS 103 applicability to the Group (continued)

FRS 102 requirements	Management considerations.
a) relevant to the economic decision-making needs of users;	All relevant disclosures regarding recognition and measurement of the pre-need plans are disclosed in Note 1, ensuring that users have the necessary information to make informed economic decisions.
b) represent faithfully the financial position, financial performance and cash flows of the entity;	Recognition and measurement principles applied and disclosed in Note 1 and within the relevant notes to the financial statements represents faithfully the position, financial performance and cashflows of the entity, providing a true and fair view of the financial statements.
c) reflect the economic substance of transactions, other events and conditions, and not merely the legal form;	The recognition and measurement principles have been consistently applied and are aligned to the service obligations associated with the contracts.
d) are neutral, i.e., free from bias.	The recognition, measurement and disclosures made in the financial statements are designed to be neutral, ensuring that they are free from bias and present an objective view of the entity's financial situation.
e) are prudent; and	The recognition, measurement and disclosures made are considered to be prudent and faithfully represents the substance of the transactions.
f) are complete in all material respects.	The initial recognition and subsequent measurement and relevant disclosures are complete in all material respects.

After careful consideration of the above, management made a judgement to follow requirements of Chapter 23 of FRS 102 in accounting for the pre-need plans.

Critical accounting estimates

The most sensitive estimates affecting the financial statements are detailed below:

Onerous contract provision

The onerous contract provision reflects estimates in respect of the value of assets due to Dignity from the ceding trusts, future instalments payable to Dignity by customers, the cost to fulfil the plans, future cost inflation, the life expectancy of plan holders and future cash inflows due from customers paying by instalments, as well as the discount rate and significant financing component.

A significant proportion of assets due from the ceding trusts to Dignity have not yet been received. During the year £2.3m (2024: £1.0m) was received from the ceding Trusts. Under the asset transfer agreements with the ceding trusts, Dignity is entitled to an equitable share of the trust assets, as each plan receives the same percentage of payments made into the trust to a level that distributes all of the remaining assets.

The value of payments made into the ceding trusts has been calculated using the customer's plan price and outstanding future instalments as provided by the ceding trusts. A range of 4% to 35% for those trusts with remaining assets has been assessed as recoverable for each contract.

DIGNITY GROUP HOLDINGS LIMITED

NOTES TO THE FINANCIAL STATEMENTS

FOR THE PERIOD ENDED 26 DECEMBER 2025

2. Judgements and key sources of estimation uncertainty (continued)

Critical accounting estimates (continued)

Onerous contract provision (continued)

The valuation of assets due from the ceding trusts has been estimated using the most recently available actuarial valuation reports provided by the ceding trusts. Since those reports are prior to the statement of financial position date, additional data containing customer payments and outstanding balances was obtained from the ceding trusts to update the values to the dates listed above, with no adjustments to the fair valuation of assets themselves.

The Group have considered the potential for changes in the assets due to Dignity from the ceding trusts between the valuation dates and the statement of financial position date as there is uncertainty until final asset position has been confirmed. An 5% movement in the value of trust assets due to Dignity would alter the provision by £0.7m.

The cost to fulfil the plans includes all directly attributable costs. This includes salaries, merchandise, vehicles and disbursements payable to third parties as well as a commensurate allocation of overheads including facilities costs and depreciation. The average cost is approximately £2.200 per plan, inflated at 2% per annum. This is significantly higher than the marginal cost to Dignity of fulfilling the plans.

Section 21, Provisions and Contingencies, required that costs to fulfil a contract should include all incremental costs of fulfilling that contract and an allocation of other costs directly attributable. This is aligned to the long-term Oxford Economics CPI forecast. A 50bps change in the annual inflation rate would impact the provision by £2.4m - 2.5m.

Life expectancy is based on English Life Tables (no.17), with a one-year change affecting the provision by £1.8m - £1.9m.

The significant financing component has been calculated based on the expected discount rate that would be reflected in a separate financing transaction between the Group and the plan holder at contract inception. The discount rate applied is fixed for the duration of each plan at inception and is based on the estimated incremental borrowing rate of the Group at the time of each cash flow. A 50bps change in the annual rate would impact the provision by £0.6m - £0.7m.

The discount rate applied in discounting the onerous provision has been set at the 10-year UK GILT rate of 4.50% (2024: 4.64%) for plans with a maturity of 15 years or less and the 20-year UK GILT rate of 5.14% (2024: 5.13%) for all other plans as at the statement of financial position date. A 50bps change in both rates would impact the provision by £1.5m to £1.6m.

The Dignity Promise provision uses a claim rate of 4.4% to determine how many plans will need to be provided for. A 50bps increase/decrease in the claim rate would increase/decrease the provision by £0.1m. It also uses the shortfall amount to calculate the provision. A 10% movement in the shortfall amount would alter the provision by £0.1m.

Discount rate applied in the valuation of Farewill intangible assets.

The fair value of intangible assets recognised on the acquisition of Farewill (see note 37) has been determined using discounted cash flow valuation techniques, which require management estimate of the discount rate, which reflects the time value of money and risks specific to the intangible assets. The discount rate has been derived from a weighted average cost of capital, adjusted where appropriate to reflect asset-specific risks and prevailing market conditions at the acquisition date. Management considers the assumptions applied to be reasonable and consistent with observable market data. Changes in the discount rate could have a material impact on the fair value and carrying value of the intangible assets.

DIGNITY GROUP HOLDINGS LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE PERIOD ENDED 26 DECEMBER 2025

Judgements and key sources of estimation uncertainty (continued)

Critical accounting estimates (continued)

Pensions (see Note 28)
Defined benefit obligations are measured using actuarial assumptions, principally the discount rate and inflation. Changes in assumptions affect the valuation of liabilities and related costs. The scheme is closed to new entrants.

At the reporting date, the Group's defined benefit pension scheme was in an actuarial surplus of £1.9m (2024: £1.2m deficit). The surplus has primarily arisen due to the deficit contributions paid by the Dignity, together with favourable investment returns and changes in financial assumptions during the year.

The surplus has been recognised as a net defined benefit asset to the extent that it is considered recoverable. The Group has assessed recoverability based on its unconditional right to reduce future contributions to the scheme in accordance with the trust deed and scheme rules.

Management considers that the recognised surplus of £1.9m is recoverable through reductions in future employer contributions over the remaining life of the scheme. No refund of surplus is assumed.

The recognition of the surplus involves significant judgement, particularly in assessing the Group's rights under the scheme rules and in determining the appropriate actuarial assumptions, including the discount rate, inflation and longevity assumptions. Changes in these assumptions could give rise to material movements in the recognised surplus.

Impairment assessment (see Note 11)
The Group has assessed the recoverable amount of its fixed assets, including trade names, right-of-use assets and tangible assets, due to changes in the funeral market and reduced profitability. Estimates include future cash flows, discount rates and long-term growth assumptions inclusive of known price increases and salary inflation.

Fair value of financial assets (see Note 25)
Some trust investments are valued using unobservable inputs. Valuations are provided by the trusts' investment managers. The Group does not influence the valuation methodology.

Contract liabilities
Deferred revenue and refund liabilities are classified between current and non-current based on expected utilisation or cancellation within 12 months. Estimates are based on historical experience and may differ from actual outcomes.

Insurance plan cancellation rates
Deferred insurance plan assets and liabilities depend on expected cancellation rates. A current assumption of 1.6% is used, based on historical experience of similar third-party plans. A 0.2% change affects the impairment charge by approximately £0.2m; a 0.4% change affects it by £0.4m.

Recoverability of deferred tax assets
Deferred tax assets are expected to unwind over 10–15 years in line with maturity of contract liabilities. Higher UK mortality accelerates recovery. Estimation uncertainty relates to the timing of these reversals.

Impairment of intercompany debtors (Company)
The Company takes into account relevant qualitative and quantitative information in assessing whether there is a significant increase in credit risk, including the matters disclosed in Note 18 to the financial statements. Having considered these matters, the Directors consider that use of 12 month ECL remains appropriate.

The calculation considers the historical credit loss experience, adjusted for identifiable forward-looking factors specific to the debtors and the economic environment. Within the calculation a probability of default based on the credit rating of the Dignity group's external Secured Notes is used. Therefore, this estimate is sensitive to fluctuations in this rate.

Management has not identified any further judgements or estimates that materially affect these financial statements.

DIGNITY GROUP HOLDINGS LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE PERIOD ENDED 26 DECEMBER 2025

3. Financial risk management

The Group finances its operations through a combination of shareholder funding, Secured Notes and bank borrowings, aiming to minimise financing costs and optimise shareholder value. The Group does not actively trade in derivatives.

Market risk

Interest rate risk and other price risk

The Group's primary borrowings are fixed-rate Secured Notes, providing a predictable repayment profile. Their fair value fluctuates with gilt prices and market yield spreads. During the year, partial repayment of the Secured Notes affected the interest recognised, repayment profile and related fair values. Further details are provided in Notes 25(f) and 36.

Further detail on the loans regarding covenants, charges over any assets, prepayment terms, repayment terms, repayments following the period end and other details can be found on Note 25(f).

The Trusts also hold significant cash and investment balances exposed to market movements. Trustees, who are largely independent of the Trading Group, operate under a defined investment policy targeting returns above funeral cost inflation within set risk parameters.

None of the Group's other financial liabilities or financial assets carry any significant interest rate risk.

Credit risk

Credit risk arises primarily from trade debtors, mitigated through established credit control procedures. Ageing analysis is provided in Note 25(c). The Group has recognised a £1.1m (2024: £1.5m) provision for funerals to be performed under the Dignity Promise where plan balances remain outstanding.

Liquidity risk

The Group manages its liquidity risk by maintaining sufficient cash reserves, committed undrawn borrowing facilities and regular monitoring and forecasting of cash balances. In addition, the Group is required under the terms of its secured borrowings to maintain EBITDA to total debt service ratio of at least 1.5 times in respect of the Securitisation Group, excluding the consolidation of the Trusts and the impact relating to the application of FRS 102 Section 23, Revenue and FRS 102 Section 20, Leases. This ratio was determined when raising the debt as being sufficient to ensure all borrowings could be repaid. More about the liquidity is disclosed in note 1, under the Going Concern section.

Capital risk management

The Group's objective under managing capital is to safeguard the Group's ability to continue as a going concern in order to provide returns for shareholders and to repay holders of Secured Notes. It also aims to reduce its cost of capital by maintaining an optimal capital structure. The Group's capital comprises equity and net debt as set out in Note 32. The Group's principal source of long-term debt financing is the Secured A Notes and the Secured B Notes. On 15 August 2025, S&P Global Ratings upgraded its credit ratings on the Company's Class A Notes to 'BB+(sf)' from 'B+ (sf)' and the Class B Notes to 'CCC+(sf)' from 'CC (sf)'. On 4 December 2025, Fitch Ratings affirmed its credit ratings on the Company's Class A Notes at 'BBB' and upgraded its credit ratings on the Class B Notes to 'B-' from 'CCC'. The Class A Notes have been fully repaid after the end of the period (refer to Note 36).

The Group monitors capital using the ratio of Securitisation Group gross debt service to underlying EBITDA. Adjustments to the capital structure may include dividend changes, capital returns, share issuance or issuance of further Secured Notes; however, additional Secured Notes cannot currently be issued until the Class B rating is upgraded to BBB by both agencies.

Climate risk

The Group has assessed the impact of climate change in preparing these financial statements. No material impacts were identified on current-period judgements or estimates, including impairment assessments or deferred tax asset recovery. Climate change is not expected to significantly affect the going concern assessment through 30 June 2027.

DIGNITY GROUP HOLDINGS LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE PERIOD ENDED 26 DECEMBER 2025

4. Turnover

Funeral services relate to:

Funerals arranged and funded by the customer at the time of need, in addition to ancillary items, such as memorials and floral tributes; and
Funerals arranged and funded by a pre-arranged Trust funeral plan at the time of need, for which an element also arises from the de-recognition of deferred revenue on completion of the related performance obligation.

Crematoria services relate to cremation services and the sale of memorials and burial plots at the Dignity operated crematoria and cemeteries.

Legal services related to revenue from selling wills and probate services.

Revenue derived from outside the United Kingdom and Channel Islands is not deemed material.

| | 52 week
period ended
26 December
2025
£m | 52 week
period ended
27 December
2024
£m |
| --- | --- | --- |
| Funeral services | 234.9 | 243.1 |
| Crematoria | 90.4 | 85.0 |
| Legal services | 3.5 | - |
| | 328.8 | 328.1 |

*Comparatives have been restated to reflect prior-year adjustments relating to the rescue provision and the release on deaths and cancellations within deferred income. Refer to Notes 1 and 39 for further details

Due to satisfaction of performance obligations or cancellation of pre-need trust plans during the period £116.9m (2024: £118.9m) of revenue, previously included in the contract liability balance, has been recognised within funeral services revenue. On cancellation, only the significant financing component that is accumulated as contract liability is released to revenue.

5. Employees

The average number of persons (including directors) employed by the Group during the period was:

| | 52 week
period ended
26 December
2025
Number | 52 week
period ended
27 December
2024
Number |
| --- | --- | --- |
| Management and administration | 359 | 313 |
| Funeral services staff | 2,226 | 2,295 |
| Crematoria staff | 429 | 440 |
| Pre-arranged funeral plan staff | 42 | 73 |
| | 3,056 | 3,121 |

DIGNITY GROUP HOLDINGS LIMITED

NOTES TO THE FINANCIAL STATEMENTS

FOR THE PERIOD ENDED 26 DECEMBER 2025

5. Employees (continued)

| Analysis of staff costs: | 52 week
period ended
26 December | 52 week
period ended
27 December |
| --- | --- | --- |
| | 2025
£m | 2024
£m |
| Wages and salaries | 111.7 | 106.2 |
| Social security costs | 13.2 | 10.2 |
| Other pension costs | 4.2 | 4.3 |
| | 129.1 | 120.7 |

6. Directors' remuneration

The directors' remuneration for the period was as follows:
	52 week
period ended
26 December	52 week
period ended
27 December
	2025
£m	2024
£m
Remuneration for qualifying services	2.5	1.7
Remuneration disclosed above includes the following amounts paid to the highest paid director:
Remuneration for qualifying services	1.5	0.7

Directors' pension contributions to money purchase schemes for the period is £15,995 (2024: £16,000) of which £nil (2024: £nil) represents contributions on behalf of the highest paid director. One director (2024: two directors) accrue retirement benefits under a defined contribution scheme.

DIGNITY GROUP HOLDINGS LIMITED

NOTES TO THE FINANCIAL STATEMENTS

FOR THE PERIOD ENDED 26 DECEMBER 2025

7. Interest receivable and similar income

	52 week period ended 26 December 2025 £m	52 week period ended 27 December 2024 £m
Fair value gains on financial assets held by the Trusts	13.3	-
Hedging/foreign exchange rate gains arising on financial assets held by the Trusts	-	10.4
Finance income	1.2	1.4
	14.5	11.8

8. Interest payable and similar expenses

	52 week period ended 26 December 2025	52 week period ended 27 December 2024
	£m	Restated £m
Secured Notes	19.8	19.9
Other loan interest	6.6	7.0
Net interest on the net defined pension liability	-	0.1
Interest on lease liabilities (Note 23)	7.6	4.6
Deferred revenue significant financing	53.2	54.5
Hedging/foreign exchange rate losses arising on financial	4.3	-
Fair value loss on financial assets held by the Trusts	-	29.0
	91.5	115.1

Comparatives have been restated to reflect prior-year adjustments relating to the rescue provision and the significant financing component within deferred income. Refer to Notes 1 and 39 for further details.

DIGNITY GROUP HOLDINGS LIMITED

NOTES TO THE FINANCIAL STATEMENTS

FOR THE PERIOD ENDED 26 DECEMBER 2025

9. Profit/(Loss) before taxation

| | 52 week
period
ended 26
December
2025 | 52 week
period
ended 27
December
2024
Restated |
| --- | --- | --- |
| | £m | £m |
| Operating profit/(loss) before taxation is stated after charging/(crediting): | | |
| Staff costs (Note 5) | 129.1 | 120.7 |
| Cost of stock recognised as an expense (included in cost of sales) | 20.3 | 20.8 |
| Depreciation of tangible fixed assets - owned | 17.0 | 17.8 |
| Depreciation of right-of-use asset (Note 13) | 3.5 | 3.3 |
| Amortisation of intangible assets | 8.3 | 7.1 |
| Expenses related to practical expedients applied under FRS 102 (Note 23) | 0.6 | 0.4 |
| Transaction costs (included in administrative expenses) | 0.8 | 4.0 |
| (Profit)/Loss on sale of fixed assets | (17.0) | (16.8) |
| Trade name impairment (Note 11) | 2.4 | 4.2 |
| Goodwill impairment (Note 11) | 0.4 | - |
| Trade name write off (Note 11) | 0.5 | 0.3 |
| Right-of-use asset impairment (Note 13) | 2.6 | 3.1 |
| Tangible fixed assets impairment (Note 12) | 3.7 | 14.6 |
| Rescue plans – transition costs | - | 0.9 |
| Rescue plans – onerous provision | 0.9 | 3.5 |
| Dignity promise – provision | (0.4) | - |
| Restructuring costs | 5.6 | 16.1 |
| Fees payable to the Company's auditor for the audit of the parent company and consolidated financial statements | 0.6 | 0.6 |
| Fees payable to the Company's auditor and its associates for other services: | | |
| The audit of Company's subsidiaries | 0.5 | 0.3 |
| Non-audit related assurance services | - | - |
| | 1.1 | 0.9 |

*Comparatives have been restated to reflect prior-year adjustments relating to the rescue provision and the significant financing component and the release on deaths and cancellations within deferred income. Refer to Notes 1 and 39 for further details

DIGNITY GROUP HOLDINGS LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE PERIOD ENDED 26 DECEMBER 2025

Taxation

| | 52 week
period
ended 26
December
2025 | 52 week
period
ended 27
December
2024 |
| --- | --- | --- |
| | £m | £m |
| Current tax | | |
| UK corporation tax | 23.4 | 29.1 |
| Adjustment in respect of prior periods | (2.7) | 0.5 |
| Total current tax | 20.7 | 29.6 |
| Deferred tax | | |
| Origination and reversal of timing differences | (10.9) | (17.1) |
| Adjustment in respect of prior periods | (0.2) | (0.7) |
| Total deferred tax | (11.1) | (17.8) |
| Total tax charge | 9.6 | 11.8 |
| Tax on items credited to other comprehensive income | | |
| | 52 week
period
ended 26
December
2025 | 52 week
period
ended 27
December
2024 |
| | £m | £m |
| Deferred tax charge on actuarial gains on defined benefit plans | 0.4 | 0.3 |
| Deferred tax charge on pension contributions | 0.5 | 0.9 |
| Current tax credit on pension contributions | (0.4) | (0.8) |
| | 0.5 | 0.4 |

DIGNITY GROUP HOLDINGS LIMITED

NOTES TO THE FINANCIAL STATEMENTS

FOR THE PERIOD ENDED 26 DECEMBER 2025

10. Taxation (continued)

The taxation charge for the period is higher (2024: higher) than the standard rate of corporation tax in the UK of 25% (2024: 25%). The differences are explained below:

| | 52 week
period
ended 26
December
2025
£m | 52 week
period
ended 27
December
2024
Restated
£m |
| --- | --- | --- |
| Group profit before taxation | 8.3 | 10.4 |
| Expected tax credit based on the standard rate of corporation tax in the UK of 25% (2024: 25%) | 2.1 | 2.6 |
| Expenses not deductible for tax purposes (including goodwill amortisation) | 5.7 | 6.6 |
| Adjustments in respect of prior periods | (2.9) | (0.2) |
| Corporate interest restriction disallowance | 4.7 | 2.8 |
| Tax charge for the period | 9.6 | 11.8 |

DIGNITY GROUP HOLDINGS LIMITED

NOTES TO THE FINANCIAL STATEMENTS

FOR THE PERIOD ENDED 26 DECEMBER 2025

Intangible fixed assets

Group	Trade names(1)	Use of third-party brand name(2)	Intangible asset-Preneed plans	Other(3)	Software	Subtotal	Goodwill	Total
	£m	£m	£m	£m	£m	£m	£m	£m
Cost
At 27 December 2024	150.4	3.2	-	2.8	4.1	160.5	233.2	393.7
Acquisition of Farewill (see Note 37)	1.4	-	0.7	-	6.8	8.9	1.0	9.9
Addition(4)	-	-	-	-	0.8	0.8	-	0.8
At 26 December 2025	151.8	3.2	0.7	2.8	11.7	170.2	234.2	404.4
Amortisation and impairment
At 27 December 2024	(125.2)	(3.2)	-	(0.9)	(2.6)	(131.9)	(189.2)	(321.1)
Amortisation charge	(1.1)	-	(0.1)	(0.1)	(1.4)	(2.7)	(5.6)	(8.3)
Trade name write-off(5)	(0.5)	-	-	-	-	(0.5)	-	(0.5)
Impairment losses	(2.4)	-	-	-	-	(2.4)	(0.4)	(2.8)
At 26 December 2025	(129.2)	(3.2)	(0.1)	(1.0)	(4.0)	(137.5)	(195.2)	(332.7)
Carrying amount
At 26 December 2025	22.6	-	0.6	1.8	7.7	32.7	39.0	71.7
At 27 December 2024	25.2	-	-	1.9	1.5	28.6	44.0	72.6

The amortisation charge for the year and impairment losses are included within administrative expenses.

(1) Trade names arise on the acquisition of funeral businesses and their fair value is calculated by reference to the estimated incremental cash flows expected to arise by virtue of the trade name being well established. There are no individually material trade names that amount to eight per cent or more of the total net bank value.

(2) The Group had a marketing agreement with Age UK Enterprises Limited, giving rights to market pre-arranged funeral plans under the Age UK brand. The value of this right has been recognised as a separate intangible asset. The decision was taken to fully impair this asset in the prior year as no funeral plans are currently being sold under this marketing agreement.

(3) Within other intangibles is £1.8m relating to previously acquired interests in a crematorium subject to a finite period of operation (by way of losses). The fair value of this interest has been identified and recognised as a separate intangible asset. The value of this interest will be amortised over the remaining period of operation.

(4) Additions include £0.8m of capitalised staff costs associated with internally generated development projects.

(5) Trade names arise on the acquisition of businesses and their fair value is calculated by reference to the estimated incremental cash flows expected to arise by virtue of the trade name being well established. The write-off in the year relates to a Farewill instenome no longer in use.

DIGNITY GROUP HOLDINGS LIMITED

NOTES TO THE FINANCIAL STATEMENTS

FOR THE PERIOD ENDED 26 DECEMBER 2025

11. Intangible fixed assets (continued)

Impairment tests for goodwill and fixed assets (excluding investments)

Under FRS 102, goodwill must be amortised over its estimated useful life. Both the amortisation charge and the net book value are shown in the table above. The amortisation charge for the year is £5.6m (2024: £5.5m).

Goodwill is also subject to an annual impairment assessment. Other fixed assets (excluding investments) are only tested for impairment when there is an indicator that their value may not be recoverable. For the period ending 26 December 2025, operating profit was lower than expected and this is an impairment indicator. Given that the underlying factors that led to the impairment in previous periods remain, no impairment reversal has been recognised in the current period. A key contributor to this assessment is continued underperformance against budget.

For the impairment test, goodwill is assessed at the business segment level, as this is the lowest level at which the performance of acquired assets, including goodwill, is monitored.

For this assessment, goodwill is allocated to the Crematoria, Funerals, Farewill Funerals and Farewill Wills and Probate segments. These are treated as both business segments and a cash-generating units (CGU). Goodwill previously allocated to the Funerals segment has already been fully impaired in earlier periods. The segmental allocation of goodwill, along with the recoverable amount of the CGU's, is set out in the table below.

| | Book Value 26
December 2025 | Recoverable
amount 26
December 2025 | Book Value
27
December 2024 | Recoverable
amount 27
December 2024 |
| --- | --- | --- | --- | --- |
| | £m | £m | £m | £m |
| Funeral services | - | 152.9 | - | 200.5 |
| Crematoria | 38.5 | 415.4 | 44.0 | 425.7 |
| Farewill Funerals | - | 0.2 | - | - |
| Farewill Wills and Probate | 0.5 | 14.9 | - | - |
| | 39.0 | 583.4 | 44.0 | 611.3 |

DIGNITY GROUP HOLDINGS LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE PERIOD ENDED 26 DECEMBER 2025

11. Intangible fixed assets (continued)

Impairment tests for goodwill and fixed assets (excluding investments) (continued)

The recoverable amount of the goodwill CGU is determined using a value-in-use calculation, which is then compared to the carrying value of the CGU. Any resulting impairment is recognised within cost of sales or administrative expenses. The value-in-use model is based on cash flow projections from the latest forecast, reflecting management's estimates of UK death rates (aligned to ONS data), expected funeral and cremation volumes, average revenues influenced by pricing and product mix, and medium to long-term growth assumptions.

The value-in-use model applied to Farewill differs from that used elsewhere in the Group. For the Wills and Probate CGU, the model is based on actual post-acquisition results for 2025, annualised to reflect a full-year performance. For the Funerals CGU, the model is based on actual results for the period from November 2025 to March 2026, similarly extrapolated to a full-year equivalent. For both CGUs, cash flows are subsequently projected into perpetuity using a terminal growth rate of 2.25%.

For the rest of the Group the model uses the 2025 actual results paired with elements of the approved 2026 forecast. Death rate assumptions follow ONS projections for 2026 and converge to total ONS forecast levels by 2028. Projected Funeral and Crematoria volumes move in line with these death rate assumptions. Where forecast ONS growth falls below expected cost inflation, cost inflation is applied. Cash flows beyond the initial 36-month period (December 2024: 36 month period) are extrapolated to 2040 ('medium term growth rate') using the growth in the ONS death rate as this is considered the most reliable basis for the Group. Medium-term growth rates range from 2.41% to 4.05% (December 2024: 2.37% to 3.56%). Beyond 2040 ('long-term growth rate') a growth rate of 2.25% (December 2024: 2.25%) is applied, reflecting long-term expectations for inflation and death rates.

The resulting cash flows for each segment are discounted using a pre-tax weighted average cost of capital ('WACC') of 11.9% (December 2024: 12.5%).

Goodwill assessment

The impairment assessment concluded that no impairment was required for the Crematoria, Funeral, or Farewill Wills and Probate divisions. Within the Crematoria division, headroom remains significant at £219.8m (2024: £225.7m). No reasonably possible change in key assumptions would remove this headroom; the discount rate would need to rise to 33.7% (2024: 30.1%) or the long-term growth rate fall to minus 37.8% (2024: minus 24.9%), both of which are considered highly unlikely in the current market environment. The Funeral division also showed no indicators of impairment, with headroom of £49.9m (2024: £68.5m). This headroom would only be exhausted if the discount rate increased to 18.5% (2024: 19.3%) or the long-term growth rate increased to 4.0% (2024: 4.8%), movements similarly regarded as improbable given prevailing market conditions. For the Farewill Wills and Probate division, the review identified no impairment and headroom of £10.7m (2024: £nil). Headroom would be removed only if the discount rate increased to 45.7% (2024: nil) or if the long-term growth rate declined to minus 19.2% (2024: nil), assumptions viewed as unlikely based on current expectations.

An impairment was identified solely within the Farewill Funerals division. The recoverable amount (determined using a value-in-use model) was lower than the carrying amount and, accordingly, a goodwill impairment of £0.4m was recognised (2024: £nil).

DIGNITY GROUP HOLDINGS LIMITED

NOTES TO THE FINANCIAL STATEMENTS

FOR THE PERIOD ENDED 26 DECEMBER 2025

11. Intangible fixed assets (continued)

Impairment tests for goodwill and fixed assets (excluding investments) (continued)

Software assessment

As part of the Group's strategic review, it was identified that the Farewill Funerals brand acquired in January 2025 had ceased to be used and therefore required impairment, resulting in a £0.5 million charge within administrative costs.

No impairment was recorded in respect of any other software, as its fair value remained supportable.

Trade name, right-of-use and property, plant and equipment assessment

Given the changes in the funeral market noted above, an impairment review was performed for the Funeral Services CGU in respect of the Group's other fixed assets. Farewill Funerals and Wills and Probate were also reviewed for impairment due to their pre-acquisition performance, in accordance with FRS 102.

For the Funeral Services CGU, a value-in-use assessment was undertaken at the business-unit level, as this is the level at which performance is monitored and where independent cash inflows can be identified. Each business unit comprises several interdependent branches that collectively deliver funeral services, and management considers this the most appropriate definition of a CGU. Cash flow projections are based on the next 12 months' forecasts, including allocated central costs, and are then extrapolated using the same longer-term assumptions applied in the broader Funeral Services impairment assessment.

Any impairment identified at CGU level is allocated across fixed assets on a pro-rata basis, including an allocation to central assets. This assessment indicated the following impairments within the Funeral Services segment:

£2.4m (December 2024: £4.2m) relating to trade names;
£2.6m (December 2024: £3.1m) relating to right-of-use assets; and
£3.7m (December 2024: £6.2m) relating to property, plant and equipment.

For the Farewill Wills and Probate CGU, a value-in-use assessment was performed for each single CGU, and no impairment was identified. In contrast, the Farewill Funerals CGU, also comprising a single CGU, was determined to be impaired. The CGU's were determined at the level at which performance is monitored and where independent cash inflows can be identified. Cash flow projections for this CGU were prepared using the next 12 months' forecasts, including central cost allocations, and extrapolated using the similar longer-term assumptions applied to the Funeral Services assessment.

Although the Farewill Funerals CGU was determined to be impaired, the carrying value of its property, plant and equipment was supported by fair value, and therefore no write-down was required.

Of the total impairment, £1.2m (December 2024: £1.4m) has been recognised within cost of sales, and £8.4m (December 2024: £12.1m) has been recognised within administrative expenses in the consolidated income statement.

DIGNITY GROUP HOLDINGS LIMITED

NOTES TO THE FINANCIAL STATEMENTS

FOR THE PERIOD ENDED 26 DECEMBER 2025

11. Intangible fixed assets (continued)

Impairment tests for goodwill and fixed assets (excluding investments) (continued)

In summary the impairment booked against the group is as follows:

£0.4m (December 2024: £nil) relating to goodwill
£2.9m (December 2024: £4.2m) relating to trade names;
£2.6m (December 2024: £3.1m) relating to right-of-use assets; and
£3.7m (December 2024: £6.2m) relating to property, plant and equipment.

The recoverable amount of all impaired CGUs within the funeral services division is £8.5m (2024: £5.7m), based on a value-in-use calculations. In line with reporting requirements, a review was performed on an asset-by-asset basis to ensure that no asset (or CGU) has been impaired below its value-in-use or fair value less cost of disposal. This exercise has included obtaining external market valuations for freehold properties and vehicles, and assessing right-of-use assets by considering market rents, sub-letting potential and discounted cashflows. The recoverable amount for trade names within impaired CGUs was assessed to be £nil (2024: £nil).

Other fixed asset (excluding investments) sensitivities

The impairment recognised reflects management's best estimate of future performance; however, significant judgement and estimation uncertainty remain, particularly in forecasting future cash flows. The table below sets out the effect of a range of reasonably possible downside sensitivities on the impairment charge for the Funeral Services segment, prepared in line with the Group's going concern assumptions.

Sensitivity applied to trade names and other fixed assets (excluding investments)	Decrease/(increase) in impairment charge £m
Increase in discount rate of 1 per cent (to £12.9 per cent)	(0.2)
Increase in 2026 funeral services EBITDA and beyond of £5.0m	3.1
Decrease in 2026 funeral services EBITDA and beyond of £5.0m	(1.4)
Increase in 2026 funeral services EBITDA and beyond of £10.0m	5.0
Decrease in 2026 funeral services EBITDA and beyond of £10.0m	(4.5)

DIGNITY GROUP HOLDINGS LIMITED

NOTES TO THE FINANCIAL STATEMENTS

FOR THE PERIOD ENDED 26 DECEMBER 2025

Tangible fixed assets

Group	Freehold land and buildings	Leasehold improvements (1)	Plant, machinery, fixtures and fittings	Motor vehicles	Work in progress	Total
	£m	£m	£m	£m	£m	£m
Cost
At 27 December 2024	181.8	84.6	86.2	79.2	6.6	438.4
Additions	1.0	1.2	5.4	1.1	18.3	27.0
Disposals	(26.0)	(12.9)	(4.6)	(5.9)	(0.4)	(49.8)
Transfers	4.5	2.8	10.2	-	(17.5)	-
At 26 December 2025	161.3	75.7	97.2	74.4	7.0	415.6
Depreciation and impairment
At 27 December 2024	(68.8)	(54.5)	(61.8)	(58.4)	-	(243.5)
Depreciation charge	(4.8)	(2.8)	(5.6)	(3.8)	-	(17.0)
Disposals	9.4	4.3	3.7	5.4	-	22.8
Impairment	-	(0.2)	(2.3)	(1.2)	-	(3.7)
At 26 December 2025	(64.2)	(53.2)	(66.0)	(58.0)	-	(241.4)
Carrying amount
At 26 December 2025	97.1	22.5	31.2	16.4	7.0	174.2
At 27 December 2024	113.0	30.1	24.4	20.8	6.6	194.9

(1) Leasehold improvements represent expenditure on enhancing transit properties and are accounted for separately from right-of-use assets. Right-of-use assets comprise the initial measurement of the related lease liability and any directly attributable costs and are subsequently measured at cost less accumulated depreciation and impairment losses.

DIGNITY GROUP HOLDINGS LIMITED

NOTES TO THE FINANCIAL STATEMENTS

FOR THE PERIOD ENDED 26 DECEMBER 2025

12. Tangible fixed assets (continued)

The Company recorded £0.4m of work-in-progress asset additions. These assets are classified as held for sale and are expected to be disposed of within one year.

Depreciation expense of £7.6m (2024: £8.0m) is included within cost of sales and £9.4m (2024: £9.8m) is included within administrative expenses.

Details of any security over assets are disclosed in Note 32.

The Group had capital expenditure of £13.2m (2024: £7.6m) authorised and contracted at the balance sheet date in respect of tangible fixed assets.

13. Right-of-use assets

	26 December 27 December
	2025	2024
Reconciliation of net book value:	£m	£m
At the beginning of the period	48.2	50.0
Additions	16.5	3.9
Depreciation charge	(3.5)	(3.3)
Impact of changes in lease payments	(2.3)	0.7
Impairment	(2.6)	(3.1)
At the end of the period	56.3	48.2

Right-of-use assets relate entirely to leasehold properties.

On 14 January 2025 and 7 March 2025, the Group disposed of six crematoria for total proceeds of £43.0 million and entered into leaseback agreements to continue operating the sites for 40 years, with an option to extend for a further 20 years. As the transactions meet the definition of a sale under revised FRS 102 Section 20, the Group recognised a right-of-use asset of £13.5 million and a corresponding lease liability of £31.5 million. The portion of the gain relating to the rights transferred to the buyer-lessor, totalling £6.4 million, has been recognised in profit or loss, with the remaining gain incorporated into the measurement of the right-of-use asset.

During the year, the Group also disposed of one funeral branch for proceeds of £0.8 million and simultaneously leased it back for operational use over a 15-year term. As this transaction also qualifies as a sale under revised FRS 102 Section 20, a right-of-use asset of £0.1 million and a lease liability of £0.3 million were recognised. The portion of the gain attributable to the rights transferred to the buyer-lessor, amounting to £0.6 million, has been recognised in profit or loss, with the balance reflected in the measurement of the right-of-use asset.

DIGNITY GROUP HOLDINGS LIMITED

NOTES TO THE FINANCIAL STATEMENTS

FOR THE PERIOD ENDED 26 DECEMBER 2025

14. Investments Group

	26
	December	December
	2025	2024
	£m	£m
Investment in associates (Note 15)	-	-
Financial assets – held by the Trusts	847.9	899.4

The Trusts continue to obtain independent advice on their investment strategy.

Asset investment allocations are designed to meet expected cash outflows while supporting long-term asset growth, reflecting the Trusts' expectation that cash inflows from new business will exceed future outflows. Details of the composition of investments for the Trusts can be found in the annual Solvency Assessment Returns. (Solvency Assessment Report)

Analysis of the movements in financial assets held by the Trusts:

	26 December 27 December
	2025	2024
	£m	£m
Fair value at the start of the period	899.4	978.1
Remeasurement recognised in interest receivable and similar income *	13.3	(29.0)
Investment income *	50.0	99.5
Purchases (2)	787.4	2,040.8
Disposals (2)	(895.0)	(2,199.1)
Hedging / foreign exchange losses * (1)	(4.3)	10.4
Investment administrative expenses deducted at source	(2.9)	(1.3)
Fair value at the end of the period	847.9	899.4

(1) This represents foreign exchange movements and currency hedges relating to the Trusts' global equity portfolios.
(2) These movements are lower compared to prior year because of the nature of the change in the Outsourced Chief Investment Officer and investment made in the prior year. In addition, the investment portfolios of NFT & AUK were de-risked into lower return seeking assets such as govt bonds. As a result, a number of assets would have been disposed of and new assets acquired towards the end of 2025.

The sum of these line items forms part of the remeasurement of financial assets held by the Trusts and related income, recognised in interest receivable and similar income. Realised investment income is lower compared to prior year due to existing funds being redeemed as a result of the change in the trust's investment profile in the prior year.

DIGNITY GROUP HOLDINGS LIMITED

NOTES TO THE FINANCIAL STATEMENTS

FOR THE PERIOD ENDED 26 DECEMBER 2025

14. Investments (continued)

Company	Subsidiary undertakings £m
Cost
At 27 December 2024	165.6
Additions	4.0
At 26 December 2025	169.6
Impairment
At 27 December 2024	(90.1)
At 26 December 2025	(90.1)
Carrying amount
At 26 December 2025	79.5
At 27 December 2024	75.5

A full list of subsidiary undertakings is included in Note 38.

The Directors consider that the carrying value of the investments is supported by their underlying value-in-use. The value-in-use calculation uses cash flow projections derived from the latest forecast. Key assumptions used to produce the forecasts are managements estimated death rates (based on forecast death rates supplied by the ONS), anticipated funeral and cremation volumes, average revenues driven by pricing and the product mix between attended funerals and unattended funerals and medium and long-term growth rates. The value-in-use considers both Funerals and Crematoria business segment and is adjusted for pre-need trust cashflows and the fair value of the Group's external debt, as set out in [Note 25].

During the year the Company increased its investment in its subsidiary, DVL through the £0.5m acquisition of Farewill (Note 37) and the £3.5m capital contribution from the acquisition loans received from Yellow (SPC) BidCo Limited (Note 25(f)).

DIGNITY GROUP HOLDINGS LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE PERIOD ENDED 26 DECEMBER 2025

15. Investment in associates

As at 26 December 2025 and 27 December 2024, the Group held a 23.8% interest in Funeral Zone Limited, a UK-based online funeral resource platform providing services to funeral directors and clients.

Although the Group holds less than 2% of the voting rights, it is considered to have significant influence over Funeral Zone Limited. This is due to the Group having the right to appoint a director who represents 25% of the Board, providing the ability to participate in financial and operating policy decisions. The Group also holds a call option over an additional 44.4% of the shares; however, this option is not regarded as substantive at the reporting date due to its pricing mechanism and has therefore not been included when assessing significant influence or control.

The Group fully impaired the carrying amount of the investment in 2019. There has been no change in this assessment as at 26 December 2025.

Based on the latest publicly available information up to December 2024, the Group's share of Funeral Zone's cumulative losses amounts to £1.5m. Of these losses, £0.6m was recognised in the consolidated income statement up to 2019 under the equity method.

16. Stock

| Group: | 26 December 2025
£m | 27 December 2024
£m |
| --- | --- | --- |
| Raw Materials | 0.4 | 0.5 |
| Finished goods | 6.3 | 6.3 |
| | 6.7 | 6.8 |

DIGNITY GROUP HOLDINGS LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE PERIOD ENDED 26 DECEMBER 2025

17. Debtors

	Company		Group
	26 December 2025	27 December 2024	26 December 2025	27 December 2024 Restated
	£m	£m	£m	£m
Amounts falling due within one year:
Trade debtors: Trusts	-	-	11.5	9.9
Trade debtors: at-need	-	-	15.4	16.6
Less: provision for impairments (Note 25(c))	-	-	(3.9)	(5.6)
Net trade debtors	-	-	23.0	20.9
Amounts owed by subsidiary undertakings	338.2	347.9	2.0	-
Corporation tax	-	-	3.4	1.4
Other debtors	-	-	13.8	23.0
Prepayments and accrued income	-	-	7.3	6.5
	338.2	347.9	49.5	51.8
Amounts falling due after more than one year:
Other debtors	-	-	82.0	87.9
Amounts owed by subsidiary undertakings	1.3	-	-	-
Deferred tax asset (Note 19)	-	-	84.1	75.9
	1.3	-	166.1	163.8
	339.5	347.9	215.6	215.6

Trust trade debtors represent amounts due to the Group's Trusts in respect of plans sold, where the Group's performance obligation has yet to be satisfied and these instalments are contractually due. Instalments due to the Trusts after the statement of financial position date are excluded as they are not contractually due.

At-need trade debtors comprise all other trade debtors due to the Group.

Credit risk is limited due to the Group's large and diverse customer base, and management considers that no additional provision is required beyond the expected credit loss recognised. Further details of past-due and impaired balances are provided in Note 25(c). Given the short-term nature of these receivables, their carrying value is considered to approximate fair value.

Company: An ECL provision of £4.5m (2024: £5.6m) is held against amounts owed by subsidiary undertakings, based on a 12-month ECL. These balances are unsecured, non-interest bearing and repayable on demand.

Although amounts owed by subsidiary undertakings are classified as due within one year, in line with Companies Act 2006 requirements for balances repayable on demand, they are not expected to be settled within the next 12 months.

DIGNITY GROUP HOLDINGS LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE PERIOD ENDED 26 DECEMBER 2025

17. Debtors (continued)

Deferred insurance commissions

Included in other debtors are deferred insurance commissions of £7.6m (2024: £7.7m). These arise because the Group is the named beneficiary of certain life assurance policies sold by third-party insurers, under which the Group commits to performing the funeral (including some disbursements) at a discount to its rates prevailing at the time of death. The asset reflects the level of expected future funerals on commissions paid and payable in the future and is offset with a provision for expected future cancellations.

An impairment of £0.1m (2024: £0.1m) has been charged to the consolidated income statement which reflects the changes in future expected cancellation rates.

Deferred commissions

Other debtors, due after more than one year, include deferred commissions of £79.1m (2024: £85.3m). These represent directly attributable marketing costs relating to pre-arranged funeral plans that have not yet been used or cancelled. During the period, £6.2m (2024: £6.9m) was amortised to administrative expenses within the consolidated income statement.

18. Cash and cash equivalents

		26 December	27 December
		2025	2024
		£m	£m
Trading Group	(a)	25.3	51.4
Trusts	(b)	24.9	10.2
Operating cash as reported in the consolidated statement of cash flows as cash and cash equivalents		50.2	61.6
Amounts set aside for debt service payments	(c)	48.7	12.1
Cash and cash equivalents as reported in the balance sheet		98.9	73.7

(a) Special purpose cash balances

Within the Trading Group, cash includes £4.3m (2024: £28.1m) of special purpose cash. This amount is ring-fenced under the agreement with bondholders and may be used for capital expenditure, crematoria upgrades, and the repayment of additional debt principal and interest. Unlike the amounts reserved for debt service payments described in Note 18(c), this cash can be accessed and utilised without prior notification to bondholders.

(b) Trusts cash balances

All Trust assets may only be used for certain prescribed purposes such as, but not limited to, paying for a funeral or issuing refunds on cancelled plans. They cannot be used for day-to-day operations of the wider Trading Group and, for example, cannot be used to fund capital expenditure projects. Although the cash is held in Trust bank accounts, it is accessible without restriction for any allowable Trust purpose, including payments following the performance of a funeral. As Dignity is considered to control the activities of the Trusts, this cash meets the requirements to be included within cash and cash equivalents under FRS 102.

18. Cash and cash equivalents (continued)

DIGNITY GROUP HOLDINGS LIMITED

NOTES TO THE FINANCIAL STATEMENTS

FOR THE PERIOD ENDED 26 DECEMBER 2025

(c) Amounts set aside for debt service payments

Amounts are transferred to these restricted bank accounts shortly in advance of making the bi-annual payments to the holders of the Secured Notes, which include the payment of the interest and principal on the Secured Notes, the repayment of liabilities due on the Group's commitment fees due on its undrawn borrowing facilities and for no other purpose. The restrictions are imposed by contracts with noteholders. The consolidated statement of cash flows shows the gross amounts of payments to the restricted bank accounts as 'finance costs paid' and 'payments due under Secured Notes', in accordance with their nature. In the period, this amount includes amounts transferred to these restricted bank accounts shortly in advance of making a prepayment to the holders of the Secured Notes.

The loan notes Trustees have a charge over this restricted bank account.

19. Deferred tax

The company did not have any deferred tax assets or liabilities. Provision for deferred tax has been made for the Group as follows:

| | 26
December
2025 | 27
December
2024
Restated |
| --- | --- | --- |
| £m | £m |
| Deferred tax liabilities | 263.1 | 272.6 |
| Deferred tax assets | (347.2) | (348.6) |
| Net Deferred Tax Assets | (84.1) | (76.0) |

All the deferred tax assets were available to offset against the deferred tax liabilities. The net deferred tax asset as at 26 December 2025 was £84.1m (2024 restated: £76.0m). Included in the net Deferred tax asset is £97.2m (2024 restated: £85.9m) relating to the Trusts and is expected to be recovered against suitable taxable profits. The deferred tax assets are expected to unwind in line with the maturity of the contract liabilities and the range is between 7 and 14 years. (See Note 1 for more details). The net asset has increased during the year due to decrease in Deferred commissions and Trust assets and increase in Trust liabilities.

Other deferred tax liabilities include capital gains rolled over and deferred tax on software and leasehold land. Other deferred tax assets include long service awards and leases.

DIGNITY GROUP HOLDINGS LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE PERIOD ENDED 26 DECEMBER 2025

19. Deferred tax (continued)

The elements of the deferred tax asset and liabilities may be payable or recoverable within 12 months. However, the Directors consider that it is not possible to quantify the amounts due to the level of uncertainty in the timing of events and have therefore classified the whole balance as due after more than one year.

There are unrecognised gross timing differences of £117.0m (2024: £97.6m) which would create a deferred tax asset of £29.3m (2024: £24.4m), relating to disallowed interest expense calculated in the Group's annual corporate interest restriction returns. These are unrecognised due to insufficient evidence to support recognition.

The Group has not recognised a deferred tax asset of £5.7m (2024: £nil) in respect of brought forward losses arising on the acquisition of Farewill, as there is uncertainty regarding the timing and amount of future taxable profits against which the losses may be utilised. In accordance with FRS 102, deferred tax assets may be recognised in future periods to the extent that sufficient taxable profits become available.

The major deferred tax liabilities and assets recognised by the Group are as follows:

| | 26
December
2025 | 27
December
2024
Restated |
| --- | --- | --- |
| Deferred tax liabilities: | £m | £m |
| Accelerated capital allowances | 9.2 | 7.3 |
| Trade names | 4.8 | 5.4 |
| Deferred commissions and Trust Assets | 243.8 | 256.0 |
| Other | 4.8 | 3.9 |
| Pensions | 0.5 | - |
| | 263.1 | 272.6 |
| | 26
December
2025 | 27
December
2024
Restated |
| Deferred tax assets: | £m | £m |
| Contract liabilities and Trust onerous provision | (341.0) | (341.8) |
| Pensions | - | (0.3) |
| Other | (1.9) | (1.6) |
| Goodwill | (4.3) | (4.9) |
| | (347.2) | (348.6) |

DIGNITY GROUP HOLDINGS LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE PERIOD ENDED 26 DECEMBER 2025

Creditors: amounts falling due within one year

	Company	Group
26 December	27 December	26 December
2025	2024	2025
£m	£m	£m
Borrowings (Note 22)	67.3	63.7
Lease liabilities (Note 23)	-	-
Trade creditors	-	-
Other taxation and social security	-	-
Amount due to subsidiary undertakings	-	18.1
Amounts due to intermediate parent	-	-
Other creditors	-	-
Contract liabilities – At-need	-	-
Accruals	-	0.1
Contract liabilities – deferred revenue (Note 21(a))	-	-
Refund liability (Note 21(b))	-	-
Corporation tax - Trusts	-	-
	67.3	81.9

Amounts owed to subsidiary undertakings are unsecured and non-interest bearing.

Creditors: amounts falling due after more than one year

	Company	Group
26 December	27 December	26 December
2025	2024	2025
£m	£m	£m
Borrowings (Note 22)	4.2	3.3
Lease liabilities (Note 23)	-	-
Other creditors	-	-
Contract liabilities – deferred revenue (Note 21(a))	-	-
Refund liability (Note 21(b))	-	-
	4.2	3.3

DIGNITY GROUP HOLDINGS LIMITED

NOTES TO THE FINANCIAL STATEMENTS

FOR THE PERIOD ENDED 26 DECEMBER 2025

21. Creditors: amounts falling due after more than one year (continued)

Movement in contract liabilities and refund liabilities

| Group | 26 December
2025
£m | |
| --- | --- | --- |
| | 2024
Restated | 27 December
2024
£m |
| Balance at the beginning of the year | 1309.7 | 1,316.5 |
| Sale of new Trust plans* | 69.4 | 57.6 |
| Increase due to significant financing | 53.2 | 54.5 |
| Recognition of revenue following delivery or cancellation of a Trust plan | (116.9) | (118.9) |
| Balance at the end of the year | 1,315.4 | 1,309.7 |

Comparatives have been restated to reflect prior-year adjustments relating to the rescue provision and the significant financing component and the release on deaths and cancellations within deferred income. Refer to Notes 1 and 39 for further details.
*This includes the £6m received from Castelnau Group in relation to the guarantee provided on the rescue assets.

a) Contract liabilities - deferred revenue

Deferred revenue represents amounts received from pre-arranged funeral plan holders adjusted for the significant financing component, where the Group has not yet fulfilled its performance obligations at the statement of financial position date. The balance is split between current and non-current based on historical experience of when plans are expected to be used within the next 12 months. Plan holders may cancel their plans at any time and may request a refund on demand.

b) Refund liability

Refund liabilities represent amounts received from pre-arranged funeral plan holders where, based on historical experience, the related plans are expected to be cancelled. The balance is split between current and non-current to reflect the expected timing of cancellations within the next 12 months. Plan holders may cancel their plans at any time.

DIGNITY GROUP HOLDINGS LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE PERIOD ENDED 26 DECEMBER 2025

22. Borrowings

The Group and Company has the following borrowings:

	Company	Group
26 December	27 December	26 December
2025	2024	2025
£m	£m	£m
Creditors: amounts falling due within one year:
Secured Notes	-	-
Other borrowings	67.3	63.7
	67.3	63.7
Creditors: amounts falling due after more than year
Secured notes	-	-
Other borrowings	4.2	3.3
	71.5	67.0

Secured Notes

Included in borrowings are secured loan notes of £402.1m (2024: £ 423.0m). On 17 October 2014, the Company issued £238.9m Class A Secured 3.5456% Notes due 2034 ('Class A Notes') and £356.4m Class B Secured 4.6956% Notes due 2049 ('Class B Notes' and together with the Class A Notes, the 'Secured Notes'). Interest is payable on the Secured Notes on 30 June and 31 December of each period. Transaction costs of £0.3m and £0.4m were incurred directly by the Company relating to the A Notes and the B Notes respectively. At 26 December 2025, £nil (2024: £0.1m) and £0.2m (2024: £0.2m) of the transaction costs in respect of the A Notes and the B Notes respectively remain unamortised. Across the current and comparative periods debt prepayments were made on the A Notes which resulted in increased amortisation proportional to the amount of debt prepaid, this increased amortisation applied to the original transaction costs, those incurred in 2023 and those incurred in 2025. After the year end, on 31 December 2025, the remaining Class A Secured Notes were fully redeemed with a further £37.6m prepayment. This resulted in all transaction costs relating to the Class A Secured Notes to be amortised to £nil.

In 2023 transactions costs of £2.7m and £3.0m were incurred directly by the Company on the consent solicitation and covenant waivers relating to the A Notes and the B Notes respectively. At 26 December 2025 £nil (2024: £1.6m) and £2.8m (2024: £2.9m) of these transactions costs in respect of the A Notes and the B Notes remain unamortised. For further details on the covenants, please refer to the going concern section within Note 1.

In 2025 transactions costs of £0.4m were incurred directly by the Company on the consent solicitation and covenant waivers in previous years relating to the A Notes. At 26 December 2025 £nil of these transactions costs in respect of the A Notes remain unamortised.

In addition to the above there is £9.3m (2024: £9.7m) of accrued interest due on the A Notes and B Notes.

The Group also has access to a £55.0m liquidity facility relating to the Class A and Class B Secured Notes which attracts floating interest rates once drawn.

See Note 25(d). For further details of security over the Secured Notes see Note 32.

DIGNITY GROUP HOLDINGS LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE PERIOD ENDED 26 DECEMBER 2025

22. Borrowings (continued)

Other Borrowings

Other borrowings include a £10.2m loan held with Yellow (SPC) MidCo Limited (2024: £8.7m) and a £6.7m loan held with Yellow (SPC) BidCo Limited (2024: £nil). Loans previously held with Phoenix UK Fund (2024: £55.1m), SPWOne Limited (2024: £1.1m) and Castelnau Group Limited (2024: £2.2m) were fully repaid during the year. Further details are provided in Note 25(f).

The loan held with Yellow (SPC) BidCo Limited was provided to fund the acquisition of Farewill Ltd. Additional information is included in Note 37.

23. Lease liabilities

| | 26
December
2025
£m | 27
December
2024
£m |
| --- | --- | --- |
| At the beginning of the period | 78.7 | 81.2 |
| Additions* | 34.7 | 3.9 |
| Impact of changes in lease payments | (2.7) | 0.9 |
| Interest expense | 7.6 | 4.6 |
| Payments | (13.3) | (11.9) |
| At the end of the period | 105.0 | 78.7 |
| Current | 6.2 | 6.8 |
| Non-current | 98.8 | 71.9 |
| | 105.0 | 78.7 |

In the year, £1.3m (2024: £1.0m) was recognised in the consolidated income statement for contingent rentals and other lease-related charges, with £1.3m (2024: £1.0m) included within cash flows from operating activities. Contingent rentals vary with revenue in accordance with the relevant lease agreements.

Total lease-related cash outflows were £13.3m (2024: £11.9m). Non-cash additions amounted to £16.5m for right-of-use assets (2024: £3.9m) and £34.7m for lease liabilities (2024: £3.9m).

On 14 January 2025 and 7 March 2025, the Group disposed of six crematoria for total proceeds of £43.0 million and entered into leaseback agreements to continue operating the sites for 40 years, with an option to extend for a further 20 years. As the transactions meet the definition of a sale under revised FRS 102 Section 20, the Group recognised a right-of-use asset of £13.5 million and a corresponding lease liability of £31.5 million. The portion of the gain relating to the rights transferred to the buyer-lessor, totalling £6.4 million, has been recognised in profit or loss, with the remaining gain incorporated into the measurement of the right-of-use asset.

DIGNITY GROUP HOLDINGS LIMITED

NOTES TO THE FINANCIAL STATEMENTS

FOR THE PERIOD ENDED 26 DECEMBER 2025

buyer-lessor, amounting to £0.6 million, has been recognised in profit or loss, with the balance reflected in the measurement of the right-of-use asset.

Practical expedient related cash outflows totalled £0.6m (2024: £0.4m).

Sublease income received in the period amounted to £0.2m (2024: £0.2m) and future sublease payments receivable at the statement of financial position date totalled £0.1m (2024: £0.2m).

24. Provisions

Group	Dilapidation £m	Onerous £m	Other £m	Total £m
At beginning of period (Restated)	11.2	29.1	1.5	41.8
Charged to income statement	0.7	2.3	-	3.0
Released to income statement	(0.4)	(1.6)	(0.4)	(2.4)
Utilised in the period	(2.2)	-	-	(2.2)
At the end of period	9.3	29.8	1.1	40.2

Onerous

The onerous contracts provision totals £29.8m (2024 restated: £29.1m) and includes: unavoidable costs associated with underperforming branches £0.1m (2024: £0.3m); £2.6m (2024: £2.6m) relating to certain historical funeral plans; and £27.1m (2024: £26.3m) for loss making contracts within the Rescue Plan portfolio, where insufficient economic benefit is expected to cover the full cost of the funeral.

Dilapidations

The dilapidations provision reflects expected repair costs for leased premises where a dilapidation notice has been received, or where an obligation exists but no notice has yet been issued.

Other

The Other provision relates to the Dignity Promise. This consists of funeral plans that include a commitment to perform the funeral even if the plan value is insufficient, provided qualifying payment conditions are met. These plans are backed by insurance, and the related asset is recognised within other debtors.

DIGNITY GROUP HOLDINGS LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE PERIOD ENDED 26 DECEMBER 2025

25. Financial instruments

Fair values of non-derivative financial assets and financial liabilities

The following fair value measurement hierarchy has been applied to instruments that are measured at fair value:

Quoted prices (unadjusted) in markets for identical assets or liabilities (level 1).
Inputs other than quoted prices included within level I that are observable for the asset or liability, either directly (that is, as prices) or indirectly (that is, derived from prices) (level 2).
Inputs for the asset or liability that are not based on observable market data (that is, unobservable inputs) (level 3).

Financial assets held by the Trusts are held at fair value. All other financial assets and liabilities are held at amortised cost.

For the purpose of fair value disclosures, the Group has determined classes of assets and liabilities on the basis of the nature, characteristics and risks of the asset or liability and the level of the fair value hierarchy as explained above.

Market risk, credit risk, liquidity risk and capital risk management

The Group's exposure to market, credit, liquidity and capital risks, together with its approach to managing these risks, is set out in Note 3 to these financial statements.

Dividend policy

The Group did not pay a dividend in the period and the Directors do not expect to do so until the business has returned to a more sustainable financial footing. The Group retains significant cash resources, remains cash generative and recognises the importance of delivering total shareholder return whilst balancing the needs of all stakeholders.

(a) Fair value of Trust financial assets

Group	26 December 27 December
	2025	2024
	£m	£m
Financial assets at fair value through profit and loss
Other growth assets – Equities	54.5	193.4
Defensive and growth fixed income	737.9	638.6
Liquid investments	0.2	0.8
Private equity investments	55.3	66.6
Total financial assets at fair value	847.9	899.4

All other financial assets are held at amortised cost and there is no difference between the book value and the fair value of these assets, due to the short-term maturities of these instruments.

DIGNITY GROUP HOLDINGS LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE PERIOD ENDED 26 DECEMBER 2025

25. Financial instruments (continued)

(a) Fair value of Trust financial assets (continued)

The following table provides the fair value measurement hierarchy of the Trusts' financial assets.

26 December 2025	Fair value measurement using
	Total £m	Quoted prices in active markets (Level 1) £m	Significant observable inputs (Level 2) £m	Significant unobservable inputs (Level 3) £m
Other growth assets – Equities	54.5	54.5	-	-
Defensive and growth fixed income	737.9	-	737.9	-
Liquid investments	0.2	0.2	-	-
Private equity investments	55.3	-	-	55.3
27 December 2024	Fair value measurement using
---	---	---	---	---
	Total £m	Quoted prices in active markets (Level 1) £m	Significant observable inputs (Level 2) £m	Significant unobservable inputs (Level 3) £m
Other growth assets – Equities	193.4	193.4	-	-
Defensive and growth fixed income	638.6	-	638.6	-
Liquid investments	0.8	0.8	-	-
Private equity investments	66.6	-	-	66.6

DIGNITY GROUP HOLDINGS LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE PERIOD ENDED 26 DECEMBER 2025

25. Financial instruments (continued)

(a) Fair value of Trust financial assets (continued)

The following methods and assumptions were used to estimate the fair values:

Core growth investments and liquid investments - level 1

The fair values of equities and open-ended investment funds are based on active market prices or price quotations at the reporting date.

Index linked gilts and corporate bonds and liquid investments - level 2

The fair values of index linked gilts and corporate bonds are based on active market prices or price quotations at the reporting date. Whilst these assets have a quoted price on a recognised exchange, adjustments are required in respect of related inflation factors thereby making these measurements level 2 rather than level 1.

Private equity investments - level 3

These investments hold some underlying investment that rely on significant unobservable inputs to price or a premium or discount may apply on exit.

In all cases, fair value information is provided by the investment manager engaged by the Trusts.

The Group has no input into, or influence over the valuation methodologies applied by the investment manager.

Within the above reconciliation of financial assets through the consolidated income statement the following movements relate to level 3 assets:

	26 December 2025 £m	27 December 2024 £m
Fair value at the start of the period	66.6	69.7
Remeasurement recognised in the consolidated income statement	(1.8)	(3.0)
Investment income	6.0	4.6
Purchases	2.4	1.5
Sales	(14.4)	(8.7)
Foreign exchange gains/(losses)	(3.3)	2.8
Investment administrative expenses	(0.2)	(0.3)
Fair value at the end of the period	55.3	66.6

At 26 December 2025, level 2 and 3 Trust financial assets of £793.2m (2024: £705.2m) are exposed to market movements arising from factors such as currency fluctuations, interest rate changes and commodity price shifts. The investment manager does not provide input-level sensitivity analysis, so the Group is unable to disclose this. However, a 10% change in fair value would increase or decrease the carrying amount by £79.3m (2024: £70.5m), with a corresponding unrealised gain or loss in the income statement. A 15% movement would change the carrying amount by £119.0m (2024: £105.8m).

DIGNITY GROUP HOLDINGS LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE PERIOD ENDED 26 DECEMBER 2025

25. Financial instruments (continued)

(b) Fair value of current and non-current financial assets and liabilities

	26 December 2025			27 December 2024
	Nominal	Book	Fair value	Nominal	Book	value Fair value
	£m	£m	£m	£m	£m	£m
Class A Notes	39.4	39.4	39.4	61.6	59.9	57.4
Class B Notes	356.4	353.4	266.0	356.4	353.3	251.3
Yellow MidCo (SPC) Limited	7.0	10.2	10.2	7.0	8.7	8.7
Yellow BidCo (SPC) Limited	9.5	6.7	6.7	-	-	-
Phoenix UK Fund Limited Loans	-	-	-	55.6	55.6	54.7
	412.3	409.7	322.3	480.6	477.5	372.1

The Class A and Class B Secured Notes are held at amortised cost. Other categories of financial liabilities include trade creditors and contract liabilities, however there is no difference between the book value and fair value of these items. The fair value of the Class B Secured Notes is equal to their market value at the statement of financial position date and is classified as Level 1. The fair value of the Class A Secured Notes is considered to equal their book value, as this was the amount repaid on 31 December 2025. This valuation is classified as Level 2, rather than Level 1.

The loans from Phoenix UK Fund Limited are included within other borrowings in Note 22 and are held at fair value. All other loans within other borrowings are held at amortised cost and their fair value equals their book value. This reflects the terms of the loan agreements and the absence of a complete transfer pricing study, further details can be found within Note 25(f).

The loans from Yellow MidCo (SPC) Limited and Yellow BidCo Limited are also held at amortised cost, with further details provided in Note 25(f).

In addition, financial liabilities include lease payables of £104.9m (2024: £78.7m), representing the present value of future minimum lease payments.

(c) Trade debtors

Credit risk

Credit risk arises from the Group's operating activities, primarily trade debtors. Credit risk is managed through upfront payments or deposits where appropriate, the use of direct debit instalments for pre-need plans and established internal controls and credit monitoring processes. Trade debtors are subject to standard payment terms appropriate to the services provided, and outstanding balances are monitored regularly in line with the Group's credit control policy.

At-need trade debtors are stated net of impairment. As at 26 December 2025, £7.6m (2024: £9.0m) of gross at-need debtors were past due and partially impaired. Debtors are written off once credit control procedures have been exhausted. Expected credit losses are assessed at each reporting date using a provision matrix based on historical experience. The impairment provision at year-end was £3.9m (2024: £5.6m), principally relating to unpaid funeral balances in the funeral services division.

DIGNITY GROUP HOLDINGS LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE PERIOD ENDED 26 DECEMBER 2025

25. Financial instruments (continued)

(c) Trade debtors (continued)

The ageing of at-need debtors is as follows:

	26 December 2025 £m	27 December 2024 £m
One to six months	4.0	3.7
Over six months	3.6	5.3
	7.6	9.0

The amount of gross trade debtors past due but not impaired was not significant. There is no expected credit loss on Trust trade debtors because expected plan cancellations are recognised separately as a refund liability, and any default would be offset by a corresponding release of that liability (see Note 21).

Movements on the Group's provision for loss allowance of trade debtors are as follows:

	26 December 2025
	27 December 2024 £m	28 December 2024 £m
At beginning of period	(5.6)	(7.1)
Credited to Income statement	0.4	0.2
Utilised in period	1.3	1.3
At end of period	(3.9)	(5.6)

The Group's maximum exposure to credit risk is the carrying value of each class of financial assets, and no collateral is held.

The expected credit loss on at-need trade debtors is measured using a provision matrix based on historical loss experience. £11.5m (2024: £11.8m) of Trust trade debtors is excluded as these balances are covered by a separate refund liability.

DIGNITY GROUP HOLDINGS LIMITED

NOTES TO THE FINANCIAL STATEMENTS

FOR THE PERIOD ENDED 26 DECEMBER 2025

25. Financial instruments (continued)

(c) Trade debtors (continued)

26 December 2025
	Days past due
	Current	30-60	61-90	91-180	>181	Total
Expected credit loss rate	3.7%	10.5%	21.4%	36.4%	78.6%
Estimated total gross carrying amount at default	7.8	2.2	0.7	1.1	3.6	15.4
Expected credit loss	0.3	0.2	0.2	0.4	2.8	3.9
27 December 2024
---	---	---	---	---	---	---
	Days past due
	Current	30-60	61-90	91-180	>181	Total
Expected credit loss rate	3.3%	9.3%	22.0%	42.0%	87.5%
Estimated total gross carrying amount at default	7.6	2.0	0.7	1.0	5.3	16.6
Expected credit loss	0.3	0.2	0.2	0.4	4.5	5.6

(d) Borrowing facilities

At 26 December 2025, the Group had £55.0m of undrawn committed facilities (2024: £55.0m), all at floating interest rates and expiring in more than two years. No facilities were due to expire within the next two periods.

	26 December 2025 £m	27 December 2024 £m
Expiring within one period	-	-
Expiring between one and two periods	-	-
Expiring in more than two periods	55.0	55.0
	55.0	55.0

Of the undrawn amount, £55.0m (2024: £55.0m) relates to the liquidity facility for the Class A and Class B Secured Notes. This facility may be used only to meet interest or principal payments on the Secured Notes if operating cash flows are insufficient. It is subject to annual renewal; however, if the provider elects not to renew, they must place £55.0m (2024: £55.0m) in a designated account that the Group can access on the same terms. The facility remains available until the Secured Notes are fully repaid.

DIGNITY GROUP HOLDINGS LIMITED

NOTES TO THE FINANCIAL STATEMENTS

FOR THE PERIOD ENDED 26 DECEMBER 2025

25. Financial instruments (continued)

(e) Maturity of financial liabilities

The tables below show the contractual, undiscounted cash flows of the Group's financial liabilities, including future interest. Contract liabilities include only the refund liability, which is treated as a financial liability because cash may be returned to plan holders on cancellation. Deferred revenue is excluded as it represents an obligation to provide services rather than to pay cash. The maturity profile of the refund liability reflects the Group's assessment of the expected timing of these cash flows.

As noted in Note 25(f), the loans from Yellow (SPC) MidCo Limited ('MidCo Loan') and Yellow (SPC) BidCo Limited ('BidCo Loan') are expected to be repaid at their contractual maturity of ten years; however, the maturity table reflects the earliest repayment point permitted under the agreements. The MidCo Loan is repayable on demand and therefore shown at £10.2m within the earliest time band. The BidCo Loan has no demand feature and is therefore shown at maturity at £25.1m.

	26 December 2025
	In less than one period £m	In more than two periods £m	In more two but not than three periods £m	In more three but not than five periods £m	In more than five periods £m	Total £m
Cash liabilities
Secured Notes (principal)	39.4	-	-	-	356.4	395.8
Interest payable on Secured Notes	17.3	16.7	16.7	33.5	219.4	303.6
Lease liabilities	13.7	13.0	12.3	22.2	187.6	248.8
Insurance commissions	0.3	0.3	0.3	0.4	-	1.3
Debt repayment	70.7	30.0	29.3	56.1	763.4	949.5
Other financial liabilities	67.3	0.2	0.2	0.3	0.7	68.7
Other borrowings*	10.2	-	-	-	25.1	35.3
Refund liability	0.8	0.8	0.8	1.6	7.5	11.5
Total liabilities	149.0	31.0	30.3	58.0	796.7	1,065.0

Other borrowings are presented at the contractual amounts payable if the lender exercises its right to demand repayment at the earliest point permitted under the loan terms. The Group, however, expects these loans to be repaid over a longer period, in which case the total interest and principal payable would be significantly higher.

DIGNITY GROUP HOLDINGS LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE PERIOD ENDED 26 DECEMBER 2025

25. Financial instruments (continued)

(e) Maturity of financial liabilities (continued)

	27 December 2024
	In less than one period £m	In more one period £m	In more two periods £m	In more three but not £m	In more but not £m	Total £m
Cash liabilities
Secured Notes (gross)	4.9	5.1	5.3	11.2	391.5	418.0
Interest payable on Secured Notes	18.8	18.7	18.5	36.5	239.9	332.4
Lease liabilities	11.4	10.4	9.8	16.9	87.8	136.3
Insurance commissions	0.3	0.3	0.3	0.4	-	1.3
Debt repayment	35.4	34.5	33.9	65.0	719.2	888.0
Other financial liabilities	57.1	0.2	0.2	0.3	0.7	58.5
Other borrowings*	64.7	4.4	-	-	-	69.1
Refund liability	0.8	0.8	0.8	1.6	7.8	11.8
Total liabilities	158.0	39.9	34.9	66.9	727.7	1,027.4

An administrative fee may be charged to the customer on cancellation, meaning the refund liability may be lower than the total shown. The fee depends on when the customer cancels the plan and the type of plan originally purchased.

(f) Other borrowings

Phoenix UK Fund Limited – 2023 Loan Facility

During 2023, the Group received advances totalling £50.0m. Interest accrued at 7%, capitalised quarterly and payable only at termination. The agreement included change of control and lender- initiated- prepayment options, resulting in the loan being classified as repayable within one year. The facility was fully repaid during the year following a request from the lender, and the repayment amount was lower than the carrying value, resulting in a £12.3m capital contribution recognised in equity.

Phoenix UK Fund Limited – 2025 Loan Facility

On 14 January 2025, the Group received a further £4.7m loan, with interest accruing at 7% until December 2025 and 15% thereafter, capitalised quarterly and payable only at termination. Mandatory repayment applied on completion of the planned crematoria sale and leaseback; otherwise, the borrower could voluntarily repay at a discount with lender approval. The loan was not a modification of the 2023 facility due to materially different terms.

It was repaid during the year through a voluntary discounted prepayment, generating a £0.6m capital contribution, with a further £0.3m capital contribution recognised on initial recognition due to the loan's fair value being below its principal amount.

DIGNITY GROUP HOLDINGS LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE PERIOD ENDED 26 DECEMBER 2025

Financial instruments (continued)

(f) Other Borrowings (continued)

SPWOne Limited loan

On 10 June 2024, the Group received an unsecured £1.0m loan at 15% interest, with principal and compound interest due in 2026 unless prepaid.

The loan was repaid during the year at its carrying amount.

Castelnau Group Limited loan

On 13 June 2024, the Group received a further unsecured £2.0m loan at 15% interest, repayable in 2026 unless prepaid.

This loan was also repaid during the year at its carrying amount.

Yellow (SPC) MidCo Limited loan

On 13 September 2023, the Group received £7.0m under an unsecured facility. Following an updated transfer pricing study, the interest rate increased from 10% to 18%, creating £3.3m of accrued interest.

Although contractually repayable in 2033, the lender may recall the loan at any time without notice, so it is presented as repayable on demand within one year.

Management expects repayment at maturity, with accrued interest projected to reach £29.8m by year 10.

Yellow (SPC) BidCo Limited loan

On 31 January 2025, the Group received £9.5m from Bidco under an unsecured loan at 10% (nominal) and 15.5% (market) interest. Interest accrues over two periods per year and is payable at those dates, although the borrower may settle interest through PIK notes, which carry the same 10% rate.

Principal and accrued interest are repayable in 2035 (or earlier on an exit event), with optional voluntary redemption.

By year-end, £0.5m of interest and £0.4m of PIK notes were recognised using the EIR method. The loan was initially recognised at a fair value of £6.0m, giving rise to a £3.5m capital contribution.

Farewill Limited and Dignity Group Holdings Limited loan

On 18 December 2025, Farewill Ltd received £1.3m under a loan agreement entered into with Dignity Group Holdings Limited on 6 November 2025. The facility permits drawings of up to £3.5m. Interest accrues daily at 15 per cent and is capitalised on the anniversary of each drawdown; no interest had accrued as at the year-end.

The principal and any accrued interest are repayable on demand by Dignity Group Holdings Limited at any time after 25 December 2026. No voluntary early repayment is permitted. This loan impacts only the Company financial statements and does not affect the consolidated Dignity Group.

Initial recognition and fair value

The loans from Castelnau Group Limited and SPWOne Limited were recognised at their nominal values on initial recognition. In contrast, the loans from Yellow (SPC) MidCo Limited, Yellow (SPC) BidCo Limited and Phoenix UK Fund Limited were initially measured at fair value, determined as the present value of expected future cash flows discounted using prevailing market interest rates for comparable instruments with similar credit risk. Only the loan from Yellow (SPC) BidCo Limited had a nominal value materially the same as the fair value, Yellow (SPC) MidCo Limited and Phoenix UK Fund Limited had nominal values that were materially different. Any difference between the fair value and the principal amount was recognised as a capital contribution within other reserves.

DIGNITY GROUP HOLDINGS LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE PERIOD ENDED 26 DECEMBER 2025

Financial instruments (continued)

(f) Other Borrowings (continued)

For the Yellow (SPC) MidCo Limited loan, the fair value equalled its principal amount because the facility is repayable on demand. For the Yellow (SPC) BidCo Limited loan, the fair value reflected the discounting of expected repayments over a ten-year period, consistent with management's expectation of the repayment profile.

For the Phoenix UK Fund Limited facilities:

the 2023 loan was discounted based on expected repayment after the 180-day notice period; and
the 2025 loan was discounted using its contractual termination date assumptions, as it did not include mandatory lender -initiated repayment triggers.
Share Capital

Group and Company
26 December	27 December
2025	2024
£m	£m
Ordinary share capital
50,257,775 (2024: 50,257,774) Ordinary shares of 12 48/143 pence
(2024: 12 48/143 pence) each	6.2	6.2

Each Ordinary Share carries equal voting rights and there are no restrictions on any share. During the year as part of the Farewill acquisition, 1 ordinary share was issued to Yellow (SPC) Bidco Limited with a share premium of £0.5m. See Note 37.

DIGNITY GROUP HOLDINGS LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE PERIOD ENDED 26 DECEMBER 2025

Reserves

Share premium account

Consideration received for shares issued above their nominal value net of transaction costs. During the year as part of the Farewill acquisition, 1 ordinary share was issued to Yellow (SPC) Bidco Limited with a share premium of £0.5m. See Note 37.

Capital redemption reserve

The capital redemption reserve represents the nominal value of shares previously redeemed by the Company in accordance with the Companies Act. There were no movements in the reserve during the period.

Other reserves

During the year, other reserves include a capital contribution of £16.7m (2024: nil) relating to the £13.2m and £3.5m differences between carrying value on date of repayment and the amount repaid for the loan facility with PAMP and acquisition loan for Farewill Ltd respectively. See Note 25(f).

Profit and loss account

The profit and loss account represents the cumulative profit and loss net distributions to owners.

Retirement benefit obligation

Defined contribution plans

The Group operates a defined contribution pension scheme for all qualifying employees in the United Kingdom. The assets of the scheme are held separately from those of the Group in an independently administered fund. The contributions payable by the Group charged to profit or loss amounted to £3.8m (2024: £3.9m).

Defined Benefit Plan

The Group operates a defined benefit scheme, the Dignity Pension and Assurance Scheme, for qualifying employees. A full actuarial valuation was undertaken as at 6 April 2023. This latest accounting valuation has been updated to 26 December 2025 by a qualified independent actuary.

In addition to the pensions in payment from the scheme, annuities have also been purchased to partly or wholly meet some of the pensioner liabilities. The value has not been included in either the assets or liabilities of the scheme. Since the value used for both purposes is identical, the inclusion or exclusion of a value for insured pensions does not affect the amount of the disclosed surplus. The annuities were valued at £0.5m on 5 April 2025 (5 April 2024: £0.5m).

After consultation with members of the defined benefit plan, the Group closed the scheme to new entrants on 1 October 2013. The plan closed to future accrual on 28 February 2017, except for members of the Local Government Pension Scheme ('LGPS') sections who continue to accrue benefits. No curtailment charge arose on the scheme closure. Special contributions of £2.0m (2024: £3.6m) have been paid to make total contributions for the period of £2.0m (2024: £3.7m).

DIGNITY GROUP HOLDINGS LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE PERIOD ENDED 26 DECEMBER 2025

28. Retirement benefit obligation (continued)

Defined Benefit Plan (continued)

The principal assumptions used in the calculation of the valuation of the plan assets and the present value of the defined benefit obligation include:

| | 26
December
2025 | 27
December
2024 |
| --- | --- | --- |
| Discount rate | 5.55% | 5.50% |
| Rate of increase in salaries – Pre 2030 | 1.75% | 2.20% |
| Rate of increase in salaries – Post 2030 | 2.75% | 3.20% |
| Pensions increase assumption: RPI capped at 5% p.a | 2.70% | 3.10% |
| Pensions increase assumption: RPI capped at 2 ½% p.a | 2.05% | 2.20% |
| RPI price inflation assumption | 2.75% | 3.20% |
| CPI price inflation assumption – Pre February 2030 | 1.75% | 2.20% |
| CPI price inflation assumption – Post January 2030 | 2.75% | 3.20% |

The demographic assumptions used include rates for mortality which, lead to an average projected life expectancy of 21.8 (2024: 21.5) years for male members aged 65, 24.2 (2024: 24.0) years for female members aged 65, 22.7 (2024: 22.3) years from for male members who are currently 50 and retiring at 65, 25.2 (2024: 25.1) years from female members who are currently aged 50 and retiring at 65.

Analysis of fair value of plan assets:

	26 December 2025		27 December 2024
	%	£m	%	£m
Bonds and LDI investments	87.7	75.0	79.9	67.8
Equity and diversified growth funds	11.3	9.7	18.6	15.8
Cash	1.0	0.8	1.5	1.2
Fair value of plan assets	100.0	85.5	100.0	84.8

At 26 December 2025 and 27 December 2024, the Pension Trustees did not hold, on behalf of the scheme, any direct investments in the Group, nor did the Group occupy any property or other assets included with the fair value of plan assets.

DIGNITY GROUP HOLDINGS LIMITED

NOTES TO THE FINANCIAL STATEMENTS

FOR THE PERIOD ENDED 26 DECEMBER 2025

28. Retirement benefit obligation (continued)

Defined Benefit Plan (continued)

Pensions and other post-retirement obligations

The amounts recognised in the statement of financial position are determined as follows:

| | 26
December
2025
£m | 27
December
2024
£m |
| --- | --- | --- |
| Fair value of plan assets | 85.5 | 84.8 |
| Present value of funded obligations | (83.6) | (86.0) |
| Net surplus/(deficit) recognised in the statement of financial position | 1.9 | (1.2) |

Analysis of amount charged to income statement in respect of defined benefit schemes:

| | 26
December
2025
£m | 27
December
2024
£m |
| --- | --- | --- |
| Administration expenses paid by the scheme | 0.5 | 0.4 |
| Interest cost less interest income included within net finance cost | - | 0.2 |

Changes in the present value of the defined benefit obligation are as follows:

| | 26
December
2025
£m | 27
December
2024
£m |
| --- | --- | --- |
| Present value of obligation at beginning of the period | (86.0) | (97.0) |
| Interest cost | (4.7) | (4.4) |
| Benefits paid | 4.8 | 5.0 |
| Remeasurement gains/(losses) – financial | 2.3 | 10.4 |
| Present value of obligation at end of the period | (83.6) | (86.0) |

DIGNITY GROUP HOLDINGS LIMITED

NOTES TO THE FINANCIAL STATEMENTS

FOR THE PERIOD ENDED 26 DECEMBER 2025

28. Retirement benefit obligation (continued)

Defined Benefit Plan (continued)

Changes in the fair value of the scheme assets are as follows:

| | 26
December
2025
£m | 27
December
2024
£m |
| --- | --- | --- |
| Fair value of plan assets at beginning of the period | 84.8 | 91.8 |
| Interest income on plan assets | 4.6 | 4.2 |
| Contributions by Group | 2.0 | 3.7 |
| Benefits paid | (4.7) | (5.0) |
| Administration expense paid by the scheme (a) | (0.5) | (0.9) |
| Remeasurement (losses)/gains | (0.7) | (9.0) |
| Fair value of plan assets at end of the period | 85.5 | 84.8 |

(a) Administrative expenses paid by the scheme includes nil charged (2024: £0.5m charged) to other comprehensive income.

Analysis of movement in the statement of final position surplus/(obligation):

| | 26
December
2025
£m | 27
December
2024
£m |
| --- | --- | --- |
| At the beginning of the period | (1.2) | (5.2) |
| Total expenses as above charged to the income statement | (0.4) | (0.6) |
| Remeasurement gains and administration expenses credited to other comprehensive income | 1.5 | 0.9 |
| Contributions by Group | 2.0 | 3.7 |
| At the end of the period | 1.9 | (1.2) |

The actual gain on scheme assets in the period was £3.9m (2024: £4.9m).

DIGNITY GROUP HOLDINGS LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE PERIOD ENDED 26 DECEMBER 2025

Retirement benefit obligation (continued)

Defined Benefit Plan (continued)

	Liabilities	Assets	Deficit	(Increase)/ decrease in deficit
26 December 2025 Changes in assumptions:	£m	£m	£m	£m
No changes	(83.6)	85.5	1.9	-
0.25% rise in discount rate	(80.7)	85.5	4.8	2.9
0.25% fall in discount rate	(86.5)	85.5	(1.0)	(2.9)
0.25% rise in inflation	(85.1)	85.5	0.4	(1.5)
0.25% fall in inflation	(82.0)	85.5	3.5	1.6

The above sensitivity analysis has been determined by applying the results of a fully accurate sensitivity analysis as at 6 April 2023 to the value placed on the Scheme liabilities as at 26 December 2025, assuming that the proportionate impact of the change in assumptions would be the same. It is therefore approximate as it does not allow for the impact of plan experience since 6 April 2023. The rise and fall in inflation covers the impact of both the Consumer and Retail Price Index.

	Liabilities	Assets	Deficit	(Increase)/ decrease in deficit
27 December 2024 Changes in assumptions:	£m	£m	£m	£m
No changes	(86.0)	84.8	(1.2)	-
0.25% rise in discount rate	(82.7)	84.8	2.1	3.2
0.25% fall in discount rate	(88.9)	84.8	(4.1)	(3.0)
0.25% rise in inflation	(87.5)	84.8	(2.7)	(1.6)
0.25% fall in inflation	(84.3)	84.8	0.5	1.6

The above sensitivity analysis has been determined by applying the results of a fully accurate sensitivity analysis as at 6 April 2023 to the value placed on the Scheme liabilities as at 27 December 2024, assuming that the proportionate impact of the change in assumptions would be the same. It is therefore approximate as it does not allow for the impact of plan experience since 6 April 2023. The rise and fall in inflation covers the impact of both the Consumer and Retail Price Index.

	26 December 2025	27 December 2024
Average duration of liabilities	13 years	13 years

Scheme characteristics

The benefits provided by the plan are final salary defined benefits with the contributions paid by the Employer on a balance of cost basis.

DIGNITY GROUP HOLDINGS LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE PERIOD ENDED 26 DECEMBER 2025

28. Retirement benefit obligation (continued)

Defined Benefit Plan (continued)

Funding arrangements

The latest full actuarial valuation, as at 6 April 2023, showed that the Scheme's assets were insufficient to meet its liabilities on the funding basis. A Recovery Plan was agreed, requiring the Company to pay £2.1m per annum (£175,000 per month) from 1 July 2024 to 31 October 2026, as set out in the Schedule of Contributions dated 30 June 2024.

Following an improvement in the funding position, the Company and the Trustees agreed in October 2025 that deficit reduction contributions would cease. The Company continues to meet the Scheme's running expenses. The funding position will next be reviewed as part of the actuarial valuation due at 6 April 2026.

The assets quoted are comprised as follows:

| | 26
December
2025
£m | 27
December
2024
£m |
| --- | --- | --- |
| Assets held by investment managers | 84.8 | 84.0 |
| Balance of the Trustees' bank account | 0.7 | 0.8 |
| Total | 85.5 | 84.8 |

29. Share-based payments

Shares held in Valderrama Limited

In 2023 Valderrama Limited issued 33,833 (2024: nil) class C2 shares, as part of the Group's management incentivisation arrangements. Directors and staff paid a total fair value of £106,011 (2024: nil) for the Class C2. In accordance with its Articles of Association, holders of Valderrama Limited C2 shares have no voting rights. The Articles contain vesting, good and bad leaver provisions for C2 Shareholders.

During 2024 Valderrama Limited issued 75,600 Class F Shares, as part of the Group's management incentivisation arrangements, for which Directors and staff paid a total fair value of £189,000. In accordance with its Articles of Association, holders of Valderrama Limited F shares have no voting rights. The Articles of Association contain vesting, good and bad leaver provisions for F Shareholders and there is a provision that up to 25% of the F Shares can be redeemed in 2028.

During 2025 C2 and F Shares were cancelled or exchanged for M1 and M2 Shares.

Valderrama Limited issued and allocated 249,000 (2024: nil) Class M1 shares and 336,151 (2024: nil) Class M2 Shares as part of the Group's management incentivisation arrangements. Directors and staff paid a total fair value of £41,500 (2024: £0) for Class M1 shares and £87,150 (2024: £0) for Class M2 shares. In accordance with its Articles of Association, holders of Valderrama Limited Class M1 and M2 shares have limited rights, primarily focused on financial gains through a share of proceeds from an ultimate exit or partial exit. The shares are non-voting and are subject to transfer restrictions, vesting and good and bad leaver provisions. 25% of the vested M Shares can potentially be redeemed in 2028 subject to the terms of the Articles of Association of Valderrama Limited.

DIGNITY GROUP HOLDINGS LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE PERIOD ENDED 26 DECEMBER 2025

Reconciliation of loss after tax to cash generated from/(used in) operations

| | 26
December
2025 | 27
December
2024
Restated* |
| --- | --- | --- |
| Loss after tax: | £m
(1.3) | £m
(1.4) |
| Adjustments for: | | |
| Taxation | 9.6 | 11.8 |
| Net finance costs/(income) | 35.9 | (14.8) |
| (Profit)/Loss on disposal of tangible asset | (17.0) | (16.8) |
| Amortisation of intangible assets | 8.3 | 7.1 |
| Depreciation of tangible assets | 17.0 | 17.8 |
| Depreciation of right-of-use assets | 3.5 | 3.3 |
| Movement in stock | 0.1 | 1.0 |
| Movement in trade debtors | (0.6) | (2.4) |
| Movement in trade creditors | (3.3) | (2.5) |
| Movement in contract liabilities | (45.7) | (59.5) |
| Fair value movement on Trust assets | (13.3) | 29.0 |
| Net pension charges less contributions | (1.5) | (3.2) |
| Trade name write-off | 0.5 | 0.3 |
| Goodwill impairment | 0.4 | - |
| Trade name impairment | 2.4 | 4.2 |
| Right-of-use asset impairment | 2.6 | 3.1 |
| Tangible asset impairment | 3.7 | 14.6 |
| Provision relating to funeral plans | - | 6.2 |
| Changes in other working capital | (2.9) | (1.8) |
| Foreign exchange rate difference – Trust assets | 4.3 | (10.4) |
| Trust investment administrative expenses deducted at source | 2.9 | 1.3 |
| Cash generated from/(used in) operations | 5.6 | (13.1) |

Other non-cash transactions

Non-cash charges comprise of amortisation of deferred debt issue costs, as discussed in Note 22.

DIGNITY GROUP HOLDINGS LIMITED

NOTES TO THE FINANCIAL STATEMENTS

FOR THE PERIOD ENDED 26 DECEMBER 2025

31. Consolidated analysis of changes in net debt

| | 27 December 2024
£m | Cash flow
£m | Other non-cash movements
£m | Restricted Cash^{(1)}
£m | 26 December 2025
£m |
| --- | --- | --- | --- | --- | --- |
| Cash at bank and in hand | 73.7 | (23.4) | - | 48.7 | 99.0 |
| Gross amounts owing on other borrowings (Note 22) | (67.0) | 44.0 | 6.1 | - | (16.9) |
| Net amounts owing on Secured Notes per financial statements | (413.2) | 21.4 | (1.0) | - | (392.8) |
| Unamortised issue costs (Note 22) | (4.8) | (0.4) | 2.2 | - | (3.0) |
| Lease liabilities | (78.7) | 13.3 | (39.6) | - | (105.0) |
| Total net debt | (490.0) | 54.9 | (32.3) | 48.7 | (418.7) |

(1) Restricted Cash refers to money set aside for debt service payments, more detail can be found on Note 19c.

DIGNITY GROUP HOLDINGS LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE PERIOD ENDED 26 DECEMBER 2025

32. Contingent liabilities

Securitisation

BNY Mellon Corporate Trustee Services Limited in its capacity as Security Trustee of the Secured Notes has the following guarantees and charges:

The Dignity (2002) Group have granted the Security Trustee fixed and floating charges over all the assets and undertakings of the Dignity (2002) Group;(i)
Dignity Group Holdings Limited has granted the Security Trustee, with full title guarantee, a first fixed charge over the shares (and any monies receivable in respect of the shares) which it holds in Dignity (2004) Limited, Dignity (2008) Limited, Dignity (2011) Limited and Dignity Holdings No.3 Limited;
Dignity (2004) Limited has granted the Security Trustee, with full title guarantee a first fixed charge over the shares (and any monies receivable in respect of the shares) which it holds in Dignity Holdings No. 2 Limited and Dignity (2002) Limited;
Dignity Holdings No. 2 Limited has granted the Security Trustee, with full title guarantee, a first fixed charge over the shares (and any monies receivable in respect of the shares) which it holds in Dignity Holdings Limited;
Dignity Holdings Limited has granted the Security Trustee, with full title guarantee, a first fixed charge over the shares (and any monies receivable in respect of the shares) which it holds in Dignity Mezzco Limited;
Dignity Holdings Limited has also assigned to the Security Trustee by way of security with full title guarantee, its right title and interest in the loans (both interest and non-interest bearing) to Dignity (2002) Limited;
Dignity Mezzco Limited has also assigned to the Security Trustee by way of security with full title guarantee, its right title and interest in the loan to Dignity (2002) Limited;
Dignity (2004) Limited has granted the Security Trustee, with full title guarantee, a floating charge over the assets now or in the future owned by Dignity (2004) Limited (other than those assets validly and effectively charged by way of fixed security);
Dignity Group Holdings Limited, Dignity Holdings No.2 Limited, Dignity Holdings Limited and Dignity Mezzco Limited have granted the Security Trustee, with full title guarantee, a floating charge over the assets now or in the future owned by each of Dignity plc, Dignity Holdings No.2 Limited, Dignity Holdings Limited and Dignity Mezzco Limited (other than those assets validly and effectively charged by way of fixed security);
The Guarantors(ii) each irrevocably and unconditionally jointly and severally guarantees to the Security Trustee punctual performance by each other Obligor of that Obligor's obligations and agrees as a primary obligation to indemnify the Security Trustee immediately on demand against any cost, loss or liability suffered by it if any obligation guaranteed by the Guarantors is or becomes unenforceable, invalid or illegal;
Dignity Funerals Limited and Derriman & Haynes Funeral Services Limited has granted the Security Trustee with full title guarantee, a first legal mortgage over each of its rights, title and interest from time to time in properties situated in England and Wales;
Dignity Funerals Limited has granted the Security Trustee with full title guarantee(iii), a first legal mortgage over its rights, title and interest from time to time in properties situated in Northern Ireland;
Dignity Finance PLC has granted BNY Mellon Corporate Trustee Services Limited (in its capacity as Note Trustee) with full title guarantee, an assignment by way of security of its benefit in each Issuer Transaction Document (other than the Trust Documents), the Security Trust Deed and each Obligor Security Document and charges by way of first fixed charge the benefit of its accounts; and
Dignity Funerals Limited has, in respect of any Scottish property which is capable of being so charged, granted 'standard securities' in favour of the Security Trustee(iv).

(i) Means Dignity (2002) Limited and its subsidiaries.
(ii) Means the Obligors (other than Dignity (2002) Limited (as Borrower)), Dignity (2004) Limited, Dignity Group Holdings Limited, Dignity Holdings No.2 Limited, Dignity Holdings Limited and Dignity Mezzco Limited.
(iii) This mortgage is governed by the laws of Northern Ireland.
(iv) The standard securities are governed by Scots Law.

Other

The Group is subject to claims and regulatory enquiries that arise in the ordinary course of business.

DIGNITY GROUP HOLDINGS LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE PERIOD ENDED 26 DECEMBER 2025

32. Contingent liabilities (continued)

On 27 March 2026, as part of a broader investigation into potential fake or misleading online reviews. The CMA opened an investigation into the Company's compliance with law on unfair commercial practices under the Digital Markets, Competition and Consumers Act 2024 (DMCC Act) in relation to obtaining consumer reviews about crematoria. An update is expected in September 2026.

Based on information currently available and advice from external legal advisers, the Directors are unable to quantify the impact on the Group's financial condition, however they do not expect it to have a material adverse impact.

33. Pre-arranged funeral plans

(a) Commitments

The Trading Group has historically sold pre-arranged funeral plans under which it is committed to performing the funeral when required. All amounts received for these plans are paid into and controlled by a number of trusts. These include the Trusts consolidated within the Group's financial statements in addition to a number of other trusts (the 'Small Trusts'). The Small Trusts are not consolidated in the Group's results as the Group does not control these trusts.

An onerous contract provision of £29.7m (2024 restated: £29.1m) has been made in these financial statements for the Rescue plans of £27.1m (2024 restated: £26.3m) (which includes a provision of £1.1m (2024: £1.5m) for the Dignity Promise) and a further provision of £2.6m (2024: £2.6m) has been made relating to previous funeral plans (see Note 1). The Directors consider that commitments relating to all other plans are not onerous. The Group remains obligated to perform these funerals in exchange for the assets of the respective trusts, whatever the value of those assets may be.

The Small Trusts had approximately £11.7m (2024: £12.5m) of net assets at the statement of financial position date. Only the consolidated Trusts receive funds from the sale of new plans.

(b) Actuarial valuation

The Trustees are required to obtain periodic actuarial valuations of the Trusts' liabilities. These valuations assess the value of the obligations to provide funerals, whether delivered by Dignity or third-party funeral directors. For funerals performed by the Group, the actuarial liability does not represent the Group's cost of delivery. The liabilities are payable on death and therefore reflect the long-term nature of the Trusts' commitments. The actuarial valuations also include future instalments due from plan holders as Trust assets. As a result, the actuarial asset figures will not correspond exactly to the Trust assets recognised in the Group's consolidated balance sheet at any specific date.

The latest actuarial valuations of The National Funeral Trust and the Trust for Age UK Funeral Plans (dated 31 December 2025) reported a combined surplus of £96.3m (31 December 2024: surplus of £192.9m), with actuarial liabilities of £678.1m (2024: £663.7m) and corresponding asset values of £774.4m (2024: £856.6m). Surplus distributions totalling £60m (2024: £120.0m) were transferred to the Trading Group during the period, comprising £30.0m (2024: 51.5m) from The National Funeral Trust and £30m (2024: £68.5m) from the Trust for Age UK Funeral Plans.

The latest valuation of the UK Funerals (2022) Trust (dated 31 December 2025) reported a surplus of £24.5m (30 June 2024: £18.5m), with actuarial liabilities of £146.3m (30 June 2024: £122.6m) and corresponding asset values of £170.8m (30 June 2024: £141.1m).

The latest valuation of the Farewill Funeral Plans Limited Trust (dated 31 December 2024) reported a surplus of £0.3m, with actuarial liabilities of £0.4m and corresponding asset values of £0.7m.

DIGNITY GROUP HOLDINGS LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE PERIOD ENDED 26 DECEMBER 2025

33. Pre-arranged funeral plans (continued)

(c) Active members and assets per plan

| | 26 December
2025
Number | 27 December
2024
Number |
| --- | --- | --- |
| Supported by: | | |
| The Trusts – Pre FCA regulation | 234,000 | 253,000 |
| UK Funerals (2022) Trust | 88,000 | 81,000 |
| The Small Trusts | 63,000 | 52,000 |
| Insurance plans | 245,000 | 253,000 |
| | 630,000 | 639,000 |

The Trusts therefore have approximately £3,032 (2024: £3,127) per active plan. On average the Trading Group received approximately £3,300 (2024: £3,100) in the period for the performance of each funeral (including amounts to cover disbursements such as crematoria fees, ministers’ fees and doctors’ fees where applicable). Based on updated trust valuations and agreed recoveries when plans go At Need there is no risk of underfunding in the Trusts.

Insurance Plans are those plans for which the Group is the named beneficiary on life assurance products sold by third party insurance companies.

(d) Average assets per plan

Average assets per plan are calculated as the net assets of the Trusts divided by the number of active plans in the Trusts. Net assets in this calculation will not equal amounts in the consolidated statement of financial position of the Group, as it includes installment amounts due in future that become payable immediately on death.

| | 26 December
2025
£ | 27 December
2024
£ |
| --- | --- | --- |
| Net assets in the Trusts | 976,325 | 1,044,363 |
| Number of active plans | 322,000 | 334,000 |
| Asset per plan | 3,032 | 3,127 |

(e) Funding arrangement of UK Funerals (2022) Trust

In accordance with FCA regulation should the actuary report that the Trust fund assets are not sufficient to cover the liability of Trust, Dignity Funerals Limited, a subsidiary of the Group, will prepare a remediation plan, approved by the actuary, setting out how any deficit will be remedied before the next annual assessment of the Trust.

(f) Transactions with the Group

During the period, the Group entered into transactions with the Small Trusts. Amounts may only be paid out of the Trusts in accordance with the relevant Trust Deeds. Transactions (which were recognised as revenue in the funeral division) amounted to £0.8m (2024: £0.5m) in the period and principally comprised receipts from the Small Trusts in respect of funerals provided. £0.4m (2024: £1.0m) was due to the Group on the statement of financial position date.

DIGNITY GROUP HOLDINGS LIMITED

NOTES TO THE FINANCIAL STATEMENTS

FOR THE PERIOD ENDED 26 DECEMBER 2025

34. Related party transactions

During the year the Group entered into transactions, in the ordinary course of business, with related parties. Transactions entered into, and trading balances outstanding at 26 December 2025, are as follows:

	Transaction value		Balance outstanding
	26 December 2025 £m	27 December 2024 £m	26 December 2025 £m	27 December 2024 £m
MidCo Loan	-	-	(7.0)	(7.0)
MidCo Limited: accrued interest	1.5	1.3	(3.2)	(1.7)
Marketing and web development services - Rawnet Limited	-	0.1	-	-
BidCo management fees	2.6	2.2	-	-
Acquisition loan from BidCo (Note 37)	9.5	-	(6.0)	-
Acquisition loan from BidCo: accrued interest	0.8	-	(0.8)	-

The loan from MidCo is a loan from a subsidiary of Valderrama, the ultimate holding company and controlling party of Dignity Group Holdings Limited at 26 December 2025.

Rawnet Limited, a company that is 100% owned by Castelnau, provides marketing and web development services to the Group. The services provided are at arm's length.

Dignity Group Holdings is party to a management services agreement with its immediate parent, Yellow (SPC) BidCo Limited which, in turn, is party to management service agreements with SPWOne Limited, PAMP and Castelnau.

During the year, new shares in Valderrama Ltd were issued to some Directors of the Group. In addition, C and F shares previously paid for by certain Directors and staff were cancelled and replaced by M shares. See note 29 for further details.

No other related party transactions occurred during the period that require disclosure under FRS 102 Section 33.

Related party transactions arising after the reporting date are disclosed in Note 36.

35. Ultimate parent undertaking and controlling party

The Company's immediate parent undertaking at 26 December 2025 is Yellow (SPC) BidCo Limited. The ultimate parent undertaking and controlling party at 26 December 2025 is Valderrama Limited, a company incorporated in Guernsey.

The parent company of the smallest and largest group in which the financial statements of the Group and Company are consolidated is Yellow (SPC) TopCo Limited. Copies of the consolidated financial statements of Yellow (SPC) TopCo Limited can be obtained from the Company Secretary, 80-82 Glentham Road, London, United Kingdom, SW13 9JJ.

36. Events after the end of the reporting period

On 31 December 2025, the Group made early repayment of £37.6m on its outstanding Class A notes, in addition to the scheduled standing payment of £1.8m, resulting in the full settlement of the Class A secured loan notes. The prepayment was funded from the cash surplus (net of tax) drawn from the Trusts. The early redemption eliminates future obligations under the Class A notes and will reduce annual debt service costs by £4.9m from £21.6m to £16.7m until 2035. No adjustment has been made to the carrying value of borrowings or related balances in the financial statements as of 26 December 2025, as the conditions giving rise to the repayment did not exist at the reporting date.

100

101

DIGNITY GROUP HOLDINGS LIMITED

NOTES TO THE FINANCIAL STATEMENTS

FOR THE PERIOD ENDED 26 DECEMBER 2025

37. Summary of acquisition

On 31 January 2025, the Group acquired 100% of the issued share capital of Farewill Ltd and its wholly owned subsidiaries (Farewill Trustees Ltd, Farewill Legal Services Ltd and Farewill Funerals Ltd, including the Farewill Funeral Plans Limited Trust).

The entire share capital was transferred to Dignity Ventures Limited in exchange for the issuance of loan notes to Farewill Ltd. These loan notes were subsequently exchanged by the Sellers for loan notes in DGHL, followed by further exchanges through each level of the holding structure up to Valderrama, at which point the Sellers' loan notes in Yellow (SPC) Topco Limited were exchanged for shares in Valderrama. The acquisition has been accounted for under the acquisition method. Details of the purchase consideration, the net assets acquired and the resulting goodwill are as follows:

| | Fair value
£000 |
| --- | --- |
| Net assets acquired | |
| Property, plant and equipment | 41 |
| Intangible assets- Software | 6,674 |
| Intangible assets-Farewill Brand | 1,378 |
| Intangible asset relating to pre-need plans | 660 |
| Financial assets held by Trusts | 807 |
| Right of use asset | 427 |
| Trade and other debtors | 1,490 |
| Cash acquired | 1,649 |
| Trade and other creditors | (3,810) |
| Pre-need contract and refund liabilities | (1,069) |
| Lease liability | (427) |
| Deferred tax liabilities | (1,909) |
| Net assets | 5,911 |
| Goodwill arising | 982 |
| Satisfied by: | |
| Loan notes as part of the roll over mechanism (Note 25(f)) | 5,953 |
| Cash payable | 497 |
| Acquisition related costs | 443 |
| Total consideration | 6,893 |

The residual excess of the consideration paid over the net assets acquired is recognised as goodwill, none of which will be tax deductible. The fair value of the £9.5m loan was £6.0m at acquisition. The difference between the nominal value and the fair value of the loan of £3.5m has been reflected as capital contribution within equity. See note 27.

Reconciliation to the cash flow statement

| | 52 week period ended
26 December 2025
£000 |
| --- | --- |
| Cash paid on completion | - |
| Cash acquired on acquisition | 1,649 |
| Acquisition of subsidiaries and business as reported in the cash flow statement | 1,649 |

Goodwill

The goodwill is attributable to the workforce and the anticipated future profit of the business. It is not deductible for tax purposes. Goodwill has been allocated between funerals and legal services as the two main cash generating units ('CGUs') that are expected to benefit from the synergies arising from the business combination and consistent with internal reporting.

102

DIGNITY GROUP HOLDINGS LIMITED

NOTES TO THE FINANCIAL STATEMENTS

FOR THE PERIOD ENDED 26 DECEMBER 2025

37. Summary of acquisition (continued)

Goodwill (continued)

Resource allocation is also determined based on performance of the two segments. Management has allocated goodwill between these CGUs based on their respective revenue proportions, which is considered the most appropriate reflection of their future cashflow generating capacity.

Acquisition-related costs

Acquisition-related costs of £0.2m were not considered to be part of the total consideration paid for the acquisition. These costs have been included within administration costs in the income statement.

Lease liabilities and Right of Use Assets (ROU)

Lease liabilities were measured as the present value of future lease payments, discounted using the lessee's incremental borrowing rate of 9.4%. ROU assets were measured as equal to the lease liability, adjusted for any favourable or unfavourable terms relative to market conditions.

Financial assets held by Trusts

The fair value of the financial assets was based on valuations provided by specialist investment managers as at the date of acquisition.

Software

The fair value of the software was determined using an income approach, applying the Multi-Period Excess Earnings Method (MEEM). This valuation technique estimates the future economic benefits generated by the software by projecting the cashflows generated by the asset group in which the software operates; and deducting the economic returns attributable to other contributory assets through Contributory Asset Charges (CACs), including those relating to the workforce, trademark, fixed assets and working capital.

The residual earnings represent the cashflows attributable solely to the software and form the basis of its fair value at the acquisition date. The resulting fair value reflects management's assessment of the software's expected future cashflows, its position within the business, and the contribution of supporting assets required to operate the technology.

Intangible assets relating to pre-need plans

See accounting policy for the pre-need funeral plans on page 36.

Pre need contract and refund liabilities

See the accounting policy for pre need funeral plans on page 36 for the details of the approach taken in obtaining the fair values on the date of acquisition.

Deferred tax liabilities

Deferred tax liabilities of £1.1m in respect of the temporary differences between the values of the assets and liabilities recognised on acquisition of Farewill Ltd and their tax bases based at an applicable rate of 25%. (Refer to Note 19 for the details).

Revenue and profit contribution

The acquired business contributed revenues of £5.5m and loss before tax of £0.2m to the group for the period from 31 January 2025 to 26 December 2025. The loss before tax amount of £0.2m excludes £0.4m for the impairment recognised in the consolidated financial statements. If the acquisition had occurred on 1 January 2025, consolidated pro-forma revenue and loss for the year ended 26 December 2025 would have been £6.0m and £0.2m respectively.

103

DIGNITY GROUP HOLDINGS LIMITED

NOTES TO THE FINANCIAL STATEMENTS

FOR THE PERIOD ENDED 26 DECEMBER 2025

38. Subsidiary undertakings of Dignity Group Holdings Limited

Principal subsidiaries
Company name	Principal activity
Advance Planning Limited	Pre-arranged funeral plans
Dignity (2002) Limited	Intermediate holding company
Dignity Crematoria Limited	Construction and leasing of crematoria
Dignity Crematoria No.2 Limited	Construction and leasing of crematoria
Dignity Finance PLC	Finance company
Dignity Funerals Limited	Funeral services
Dignity Funerals No.3 Limited	Funeral services
Dignity Pre Arrangement Limited	Pre-arranged funeral plans
Dignity Securities Limited	Pre-arranged funeral plans
Pitcher & Le Quesne Limited***	Funeral services

Other subsidiaries
Company name	Principal activity
Birkbeck Securities Limited	Intermediate holding company
Dignity (2004) Limited	Intermediate holding company
Dignity (2008) Limited	Intermediate holding company
Dignity Ventures Limited	Intermediate holding company
Dignity (2014) Limited	Intermediate holding company
Dignity Finance Holdings Limited	Intermediate holding company
Dignity Holdings Limited	Intermediate holding company
Dignity Holdings No.2 Limited	Intermediate holding company
Dignity Holdings No.3 Limited	Intermediate holding company
Dignity Mezzco Limited	Finance company
Dignity Funerals No.2 Limited	Intermediate holding company
Dignity Beyond Life Limited	Will writing and other end-of-life support services
Dignity Services	Intermediate holding company
Funeral Advisor Limited	Online funeral resource
Valedictum Limited	Non-trading company
Farewill Ltd	Wills, probate and funeral services
Farewill Funerals Limited	Funeral services
Farewill Legal Services Limited	Legal probate services
Farewill Trustees Limited	Corporate Trustee

Associate
Company name	Principal activity
Funeral Zone Limited***	Online funeral resource for Funeral Directors

Dormant Companies
Company name	Company name
A & N Duckworth Limited	Carrwood Funeral Supplies Limited
A & G. Huteson Ltd	Castle Court Funeral & Limousine Services Limited
A Ashton & Sons Limited	Chichester Crematorium Limited
A Bennett & Sons Limited	Chosen Heritage (Scotland) Limited*
A F Townsend (Funeral Directors) Limited	Chosen Heritage Limited
A Hazel & Sons Limited	Chosen Heritage Services Limited
A Shepherd & Sons Limited	Clegg Humphreys Limited
A T Genders Limited	Cooksey & Sons Limited
A V Band Limited	Cooksley & Sons Limited

104

DIGNITY GROUP HOLDINGS LIMITED

NOTES TO THE FINANCIAL STATEMENTS

FOR THE PERIOD ENDED 26 DECEMBER 2025

Subsidiary undertakings of Dignity Group Holdings Limited (continued)

Dormant Companies
Company name	Company name
A. Haxby & Sons (Filey) Limited	Coombes & Sons (Bovey Tracey) Limited
Abbey Funeral Service Limited	Counties Crematorium Limited
Aberdeen Funeral Directors Limited*	Coyne Brothers Limited
Adela Funeral Homes Limited	Cumbemauld Funeral Services Ltd*
Anglian Funeral Service Limited	Cyril H. Lovegrove Limited
Armitage (Funeral Directors) Limited	D J Thomas (Funeral Directors) Limited
Arthur Denyer Limited	D. J. Evans Forse & Co Limited
Arthur G Whitehead (Westminster) Limited	D. Walsh & Son Limited
Ashton & Ebbutt Limited	Daly & Company Limited
Ashton Ebbutt Holdings Limited	David B Hendry Limited
Ashton Memorials Limited	David Silvery & Son Limited
Ashtons (Brighton) Limited	Davis McMullan Funeral Directors Limited
Associated Funeral Services Limited	Derriman & Haynes Funeral Services Limited
Astley Funerals Limited	Dewi Reynolds & Son Limited
Arthur J. Nash Limited	Dignity (2009) Limited
B & B Funeral Directors Limited	Dignity Caring Funeral Services Limited
B. Bernard & Sons Limited	Dignity Funerals No.4 Limited
Baguley Bros. Limited	Dignity in Destiny Limited
Banks Funeral Service Limited	DLSUK Limited
Bayley Brothers Hereford Limited	Dignity Manufacturing Limited
Birmingham Crematorium (1973) Limited	Dillistone Funeral Service Limited
Boyce Anderson Motors Limited**	Docklands Funeral Services Limited
Bracher Brothers Limited	Dottridge Brothers Limited
Brighton Stonemasons Limited	Downer & White Limited
Broadwater Limousines Limited	Downs Crematorium Limited
C Powell Funeral Service Limited	Dowsett & Jenkins Limited
Caledonian Funeral Services Limited*	Dundee Crematorium Limited*
Dunning (Undertaking) Limited	G.F. Cook (Funerals) Limited
Dyson Richards Limited	G.F. Hunt (Bath) Limited
E Hurton & Son Limited	G.Gamble & Son Limited
E M Lander Limited	G.Smoth (Wooburn) Limited
E Seymour & Son Limited	George Hall & Son Funeral Directors Limited
E. Brigham Funeral Directors Limited	George S. Munn & Company, Limited*
E.F.Edwards Limited	George Stanton (1935) Limited
E.Finch & Sons Limited	Ginns & Gutteridge Limited
Earl of Plymouth Limited	Gornalls Funeral Services Limited
Eden Park Estate Limited	Graeme Buckle Funeral Services Limited
Edmund & Lewis Limited	Graham Sullivan Funeral Directors Limited
Edward Lewis Wicks & Sons Limited	Grave Design Limited
Ely Funeral Service Limited	Great Southern Group Limited
Exeter & Devon Crematorium Limited	Grimmett & Timms Limited
F L Mildred & Sons (Funerals Directors) Limited	H & G Wilde Funeral Directors Limited
F. Kneeshaw & Sons (Funeral Directors) Limited	H Eaton & Sons Holdings Limited
F.E.J Green & Sons Limited	H. Eaton & Sons Limited
F.G.Pymm (Funeral Directors) Limited	H A Harrold & Son Limited
F.Harrison & Son (Funeral Directors) Limited	H J Dawson Limited
F. J. Gibb Limited	H J Phillips & Son (Funerals Directors) Limited
F.M & J. Wait & Co Limited	H Johnson & Sons Limited

105

DIGNITY GROUP HOLDINGS LIMITED

NOTES TO THE FINANCIAL STATEMENTS

FOR THE PERIOD ENDED 26 DECEMBER 2025

38. Subsidiary undertakings of Dignity Group Holdings Limited (continued)

Company name	Company name
F. Jennings & Sons Limited	H Leslie Humphreys Limited
F Smith & Son (Staines) Limited	H Tonkin Limited
Family Funeral Services Limited	H. J. Whalley & Sons Limited
Farebrother Funeral Services Limited	H. Towell Ltd
Fisher & Townsend (Funeral Directors) Limited	H.Copeland & Son Limited
Flowers By Design Limited	H.Dorncott & J.Bent Limited*
Ford Ennals Funeral Services Limited	H.G.Brown & Sanders Limited
Forethought Limited	H.Hill Funeral Service Limited
Francis Chappel & Sons Limited	H.R.H Holdings Limited
Frank Stephenson & Son (Funeral Directors) Limited	Hambrook & Johns Limited
Frederick W Chitty & Co Limited	Hanningtons (Funeral Directors) Limited
Fredk. W. Paine. Limited	Hardacres Funeral Directors Limited
Funeral Arrangements Online Limited	Harry Williams & Sons (Cambridge) Limited
Funeral Debt Collection Limited	Heighton& Son Limited
Funeral Services London Limited	Hemley Funeral Service Limited
G & L Evans Ltd	Henry Naylor (Funeral Directors) Limited
G.m. Charlesworth & Son Limited	Henry Paul Limited
Henry Smith (Wandsworth) Limited	Kenyon Repatriation Limited
Highfield Funeral Service Limited	Kenyon Securities Limited
Hindu Funeral Service Limited	Kenyons Funeral Directors Limited
Hodgson Holdings (Scotland) Limited	Kirkwoods (Funeral Directors) Limited**
Hodgson Holdings Limited	L Fulcher Limited
Holdfast (Funerals) Limited**	L J Clegg Limited
Howard Jenkins (Edge Hill) Limited	Lambeth & Brixton Community Funeral Services Limited
Hunters Funeral Directors Limited	Lambeth Funeral Services Limited
Ian Clarke Funeral Service Limited	Lea Valley Funeral Services Limited
Ingall Services Limited	Leeds Limousines Limited
Inverclyde Funeral Directors Limited*	Leehope Services Limited
Invicta Memorials Limited	London Necropolis Company Limited
J Hylton & Sons Limited	Longhurst (Undertakers) Limited
J H Kenyon Limited	Lowden Wells Limited
J H Raven Limited	MacIntosh & Steven Limited*
J Kynaston Limited	Mahony & Ward Limited
J Steadman & Sons Limited	Malcom J Presland Limited
J.W.Tate & Son (Holdings) Limited	Mannerings Limited
J.W.Tate & Son Limited	Mason Funeral Service Limited
Jack Lee & Sons Limited	Mathias's of Putney Limited
James Allen & Son (Disley) Limited	Maxwell Bros. Limited
James Crook Limited	Meadow Pool Limited
John & Willian Shering Limited	Mews & Yeatmans Limited
John Bardgett & Sons Limited	Mid Sussex Funeral Services Limited
John G Ashton & Co (Funeral Directors) Limited	Middelton & Wood (1919) Limited
Johnson Funeral Supplies Limited	Monumental Masons Limited
Johnson-Sears Limited	Moodys Funeral Directors Limited
Jonathan Harvey Limited*	Moray Crematorium Holdings Limited
Jonathan Walker Funeral Directors Limited	Moray Crematorium Limited
Joseph Swift (Funeral Directors) Limited	Morecambe & Heysham Funeral Service Limited
Joseph Tomlinson & Sons Limited	N A Medd Limited
Joslin Memorials (1974) Limited	Nation Funeral Trust Limited
K. Y. Green Limited	Newport & Telfold Funeral Service Limited
Kellaways (Funeral Service) Limited	Newport Hire (I.W.) Limited
Ken Gregory & Sons Limited	Newsome's Funeral Service (Royston) Limited
Kent Funeral Supplies Limited	Nicholls Memorials Limited

DIGNITY GROUP HOLDINGS LIMITED

NOTES TO THE FINANCIAL STATEMENTS

FOR THE PERIOD ENDED 26 DECEMBER 2025

Subsidiary undertakings of Dignity Group Holdings Limited (continued)

Dormant Companies
Company name	Company name
Kenyon Air Transportation Limited	Norfolk Crematorium Limited
Kenyon Emergency Services Limited	Northampton Crematorium Limited
Norwich Crematorium Holdings Limited	SCI Pre Arrangement Limited
Norwich Crematorium Limited	Seaford Funeral Service Limited
Nubian Funeral Directors Limited	Seddons of Southport Limited
Oxford Crematorium Limited	Selim Smith & Co. Limited
Patrick Stonemasons Limited	Serenity Limited
Personal Choice Funeral Plan Limited	Sevenoaks District Crematorium Limited
Peter Johnson Funerals Ltd.	Shankill Funeral Services Limited**
PFG Hodgson Kenyon (Services) Limited	Silver Lady Funeral Service Limited
PFG Hodgson Kenyon (UK) Limited	Simplicity Funerals Limited
PFG Hodgson Kenyon Limited	Simpsons (Undertakers Requisites) Limited
Philip Ford & Son (Funeral Directors) Limited	Spotland Bridge Funeral Services Limited
Phillips Funeral Plans Limited	Stanway & Garnett Funeral Service Limited
Phillips Funeral Services Limited	Swift & Mildred Limited
Phillips Holdings (Hertfordshire) Limited	T & R O'Brien Limited
Phillips Supplies Limited	T.H.Fenton Limited
Piccioni (Masonry) Limited	T S Annison & Sons Limited
Plantsbrook Group Limited	T. S. Horlock & Son Limited
Plantsbrook Limited	T.H.Sanders & Higgs Limited
Preston Ireland Bowker Limited	T.H.Sanders & Sons Limited
Priestley & Cockett Limited	TJ Brown & Sons Limited
R Buller & Sons Limited	T.J.Davies & Sons (Funeral Directors) Limited
R C Holden & Son Limited	Taylors Funerals (Wirral) Limited
R Garner Son & Wood Limited	The Crematorium Company Limited
R.Davies & Son Limited	The Dignity Plan Limited
R.S. Johnson & Sons Limited	The East Riding Crematorium Company Limited
R.S.Scott (Funerals) Limited	The Haltemprice Crematorium Limited
Ravenhill Funeral Services Limited**	The Lawrence Funeral Service Limited
Remembrance Limited	The Leverton Funeral Service (Dartford) Limited
Robemanor Limited	The South London & Southern Counties Cremation Society Limited
Robert Nicholls Funeral Directors Limited	The South London Crematorium Co Limited
Roberts & Brain Limited	The Titford Funeral Service Limited
Romney Marsh Funeral Services Limited	Thomas Brothers (Wellington and Taunton) Limited
Rosspark Limited	Thompsons (Busbys) Limited
S A Bates & Sons Limited	Thompsons (Funeral Furnishers) Limited
S Wellens & Sons Limited	Thompsons (Maguires) Limited
Saftway Limited	Thompsons (Rimmers) Limited
Salenew Limited	Tovey & Morris Limited
Sanders Goodale & Co. Limited	U.F.D Limited
UK Funerals Limited	Walkers Funeral Directors Limited
UKF Limited	Walmsley Hammond (Rayleigh) Limited
Valedictum Holdings Limited	Warburton Funerals Limited
Valedictum Group Limited	Wetton Funeral Services Limited
Valedictus Group Limited	White Lady Funerals Limited
Valedictus Holdings Limited	Whyte Funeral Services Limited*
Valedictus Limited	William Pearce & Son Limited
W G Dixon Limited	Wilmshurst & Dickson Limited
W G Rathbone Funeral Directors Limited	WM. Jordon & Son (Funeral Directors) Limited
W H Scott & Son Limited	Woodfield Park Funeral Home Limited
W S Bond Limited	Wrekin Funeral Service Limited
W S Harrison & Son Limited	Yew Holdings Limited
W Thorp & Sons (Leigh-on-Sea) Limited
W E. Turner (Funeral Furnishers) Limited
W.Garstin & Sons Limited

106

107

DIGNITY GROUP HOLDINGS LIMITED

NOTES TO THE FINANCIAL STATEMENTS

FOR THE PERIOD ENDED 26 DECEMBER 2025

38. Subsidiary undertakings of Dignity Group Holdings Limited (continued)

Registered office

The registered office for these subsidiaries is 280 Kinfauns Drive, Glasgow, G15 7AR

** The registered office for these subsidiaries is 14 Scotch Quarter, Carrickfergus, County Antrim, BT38 7DP

*** The registered office for this subsidiary is 59 Kensington Place, St Helier, JE2 3PA, Jersey

*** The registered office for the associate is 72 Paris Street, Exeter, Devon, EX1 2JY

All other subsidiary undertakings are registered at 4 King Edwards Court, King Edwards Square, Sutton Coldfield, West Midlands, B73 6AP.

Other information

All subsidiaries are incorporated in the United Kingdom except for Pitcher & Le Quesne Limited which is incorporated in Jersey. All subsidiaries are controlled by Dignity Group Holdings Limited.

All of the above shareholdings are held indirectly except Dignity (2004) Limited, Dignity (2008) Limited, Dignity Ventures Limited and Dignity Holdings No.3 Limited.

Dignity Group Holdings Limited owns, either directly or indirectly, 100% of the equity interest of all the subsidiaries.

DIGNITY GROUP HOLDINGS LIMITED

NOTES TO THE FINANCIAL STATEMENTS

FOR THE PERIOD ENDED 26 DECEMBER 2025

39. Prior Year Restatement

As detailed in Note 1, prior-year figures have been restated to correct the Group's measurement methodology for the rescue asset provision and calculation of the significant financing component in the deferred income models relating to advance payments received from plan holders before performance of the funeral services.

In accordance with FRS 102, the related rescue provision and deferred tax asset have been adjusted, and the comparative amounts have been restated in these financial statements.

29 December 2023 Consolidated Balance Sheet (Selected lines only):

	29 December 2023 as originally presented	Rescue provision	Deferred income	Deferred tax	29 December 2023 restated
	£m	£m	£m	£m	£m
Current assets
Debtors	181.1	-		4.1	185.2
Non-current liabilities
Creditors: amounts falling due after more than one year	(1,767.5)	-	(18.6)	-	(1,786.1)
Provisions for liabilities	(39.4)	1.9	-	-	(37.5)
Capital and reserves
Profit and loss account	(624.5)	1.9	(18.6)	4.1	(637.1)
Total equity	(462.8)	1.9	(18.6)	4.1	(475.4)

27 December 2024 Consolidated Balance Sheet (Selected lines only):

	27 December 2024 as originally presented	Rescue provision	Deferred income	Deferred tax	27 December 2024 restated
	£m	£m	£m	£m	£m
Current assets
Debtors	212.4	-	-	3.3	215.7
Non-current liabilities
Creditors: amounts falling due after more than one year	(1,657.3)		(18.1)	-	(1,675.4)
Provisions for liabilities	(46.4)	4.6	-	-	(41.8)
Capital and reserves
Profit and loss account	(627.4)	4.6	(18.1)	3.3	(637.6)
Total equity	(465.7)	4.6	(18.1)	3.3	(475.9)

DIGNITY GROUP HOLDINGS LIMITED

NOTES TO THE FINANCIAL STATEMENTS

FOR THE PERIOD ENDED 26 DECEMBER 2025

Prior Year Restatement (continued)

| | 27 December 2024 as originally presented
£m | Rescue provision
£m | Deferred income
£m | Deferred tax
£m | 27 December 2024 restated
£m |
| --- | --- | --- | --- | --- | --- |
| Period ended 27 December 2024 | | | | | |
| Loss for the financial period | (3.8) | 2.7 | 0.5 | (0.8) | (1.4) |
| Other comprehensive income | 0.9 | - | - | - | 0.9 |
| Total comprehensive loss for the period ended 27 December 2024 | (2.9) | 2.7 | 0.5 | (0.8) | (0.5) |

The impact of the above is as follows:

Rescue provision was overstated by £4.6m (2023: £1.9m) and therefore provisions have been decreased by £4.6m.
Deferred income was understated by £18.1m (2023: £18.6m) and therefore creditors: amounts falling due after more than one year have increased by £18.1m.
Deferred tax asset was overstated by £1.2m (2023: £0.5m) on the rescue provision adjustment. Additionally, the deferred tax asset was understated by £4.5m (2023: £4.6m) as a result of the deferred income adjustment. This resulted in the understatement of debtors by £3.3m (2023: £4.1m).
Opening total equity increased from £(465.7)m to £(475.9)m.
The adjustments above have no impact on Group cash position.
See the restatements of the above have been reflected under Note 4, 8, 10, 17, 19, 21, 24 and 30.

DIGNITY GROUP HOLDINGS LIMITED

NOTES TO THE FINANCIAL STATEMENTS

FOR THE PERIOD ENDED 26 DECEMBER 2025

Glossary of terms

Term	Description
Board	Board of Directors
BidCo	Yellow (SPC) BidCo Limited
Castelnau	Castelnau is a company that owns Valderrama as part of a joint venture with SPWOne, Valderrama being Dignity Group Holdings Limited ultimate holding company and controlling party at 26 December 2025
CGU	Cash-generating unit
Dignity Promise	The Group offers certain pre-arranged funeral plans that include a feature under which the funeral will be carried out provided the required instalments have been paid and are up to date at the time of need, even if the plan balance is insufficient to cover the full cost.
EBITDA	Earnings Before Interest, Tax, Depreciation and Amortisation
Farewill	Farewill means Farewill Ltd. and its subsidiaries as acquired on 31 January 2025.
Group or Dignity Group Holdings Limited Group ('Dignity Group')	Dignity Group Holdings Limited, including its subsidiaries and the Trusts
MidCo	Yellow (SPC) MidCo Limited
OCIO	Outsourced Chief Investment Officer
PAMP	Phoenix Asset Management Partners Limited
RAO	Regulated Activities Order
Rescue Plans	Rescue plans refer to where Dignity has committed to helping customers of those providers who chose not to apply or did not meet the standards required by FCA regulation by offering the option to convert to a Dignity plan.
Securitisation Group or Securitised Group	Dignity (2002) Limited, including its subsidiaries, but excluding the Trusts. It represents those entities over which security has been granted in respect of the Secured Notes
Small Trusts	Pre-arranged funeral plans from which the Group receives funeral cover in the event that they deliver a funeral service. Dignity is unable to influence variable returns, such that the Group is not considered to control these trusts and therefore these trusts are not consolidated.
SPWOne	SPWOne is a company that owns Valderrama as part of a joint venture with Castelnau, Valderrama being Dignity Group Holdings Limited ultimate holding company and controlling party at 26 December 2025
Topco	Yellow (SPC) Topco Limited
Trading Group	Dignity Group Holdings Limited and its subsidiaries excluding the Trusts
Transfer pricing study	Transfer pricing study refers to the pricing of transactions between related parties, in the case of Dignity Group Holdings Limited, this refers to the loans held between itself and Yellow (SPC) MidCo Limited, Castelnau Group Limited and SPWOne Limited
Trusts	The National Funeral Trust, the Trust for Age UK Funeral Plans, UK Funerals (2022) Trust and Farewill Funeral Plans Limited Trust considered for accounting purposes to be controlled and therefore included in the consolidated financial statements of Dignity Group Holdings Limited

AI assistant

DIGNITY PLC — Annual Report 2025

4831_rns_2026-06-08_ad573402-1505-4fc4-9a52-d5a7985aa5fa.pdf

DIGNITY GROUP HOLDINGS LIMITED

REPORT AND FINANCIAL STATEMENTS

FOR THE PERIOD ENDED 26 DECEMBER 2025

DIGNITY GROUP HOLDINGS LIMITED

COMPANY INFORMATION

DIGNITY GROUP HOLDINGS LIMITED

STRATEGIC REPORT

FOR THE PERIOD ENDED 26 DECEMBER 2025

Business Review and Future Developments

Business update

DIGNITY GROUP HOLDINGS LIMITED

STRATEGIC REPORT

FOR THE PERIOD ENDED 26 DECEMBER 2025

Financial Performance

Key Performance Indicators (KPIs)

Financial KPIs

Non-Financial KPIs

DIGNITY GROUP HOLDINGS LIMITED

STRATEGIC REPORT

FOR THE PERIOD ENDED 26 DECEMBER 2025

Rescue Plans:

Events after the reporting period

Outlook

Impact of Geopolitics

Restatement of Prior Year Figures

Rescue provision

Deferred Income

Principal Risks and Uncertainties

Risks and Risk Management

Responsibilities and Actions

Board and Risk Committee

Risk Process

Review and Internal Audit

STRATEGIC REPORT

FOR THE PERIOD ENDED 26 DECEMBER 2025

STRATEGIC REPORT

FOR THE PERIOD ENDED 26 DECEMBER 2025

DIGNITY GROUP HOLDINGS LIMITED

STRATEGIC REPORT

FOR THE PERIOD ENDED 26 DECEMBER 2025

Section 172 Statement

STRATEGIC REPORT

FOR THE PERIOD ENDED 26 DECEMBER 2025

Environmental, Social and Governance (ESG) Matters (SECR)

Streamlined Energy and Carbon Reporting (SECR)

Energy Consumption

Emissions

Intensity Metrics

Energy Efficiency Improvements:

Measures Undertaken in 2025:

DIGNITY GROUP HOLDINGS LIMITED

STRATEGIC REPORT

FOR THE PERIOD ENDED 26 DECEMBER 2025

Reporting Methodology

DIGNITY GROUP HOLDINGS LIMITED

DIRECTORS' REPORT

FOR THE PERIOD ENDED 26 DECEMBER 2025

Directors:

Results and Dividends:

Going Concern

Competition and Markets Authority (CMA) Inquiry

Pensions

Financial Risk:

Locations Outside the UK:

DIGNITY GROUP HOLDINGS LIMITED

DIRECTORS' REPORT

FOR THE PERIOD ENDED 26 DECEMBER 2025

Principle 1: Purpose and Leadership

DIGNITY GROUP HOLDINGS LIMITED

DIRECTORS' REPORT

FOR THE PERIOD ENDED 26 DECEMBER 2025

Conflicts of Interest

Principle 2: Board Composition

The Board

Principle 3: Director Responsibilities

Separation of Roles

Corporate Governance Structure

DIGNITY PLC Annual Report 2025