The master of profit and loss

PETER Hindley is accustomed to being the dinner party guest that nobody wants to sit next to. It is, after all, something of a conversation stopper being the chief executive of Dignity, Britain's largest provider of funeral services.

But then curiosity will usually get the better of a fellow diner and the questions start to flow.

'Someone will say, 'Do they take the handles off the coffin before cremation?'' says Hindley. 'Then somebody else asks, 'Do they really burn the coffin?'' or, 'Do you really get the right ashes?''

Even City analysts and institutional investors asked questions like these in the weeks before Easter, ahead of this month's flotation of Dignity. It valued the company at almost £190m, netting 60-year-old Hindley £1m from selling shares in the company he joined in 1991.

The company, then known as Plantsbrook, had over-expanded on borrowed money and was in financial difficulties.

Hindley worked for Debenhams when headhunter Spencer Stuart approached him about the chief executive's role at Plantsbrook.

'When they rang they said, 'We'd better tell you what industry it is'. I knew nothing about it whatsoever, but liked the opportunity of turning a business around.'

But he wanted to see the funeral trade at first hand - 'I had never seen a dead body and I wasn't sure that I could cope with it.'

He watched the whole process, including embalming, without embarrassing himself. 'Even today I remember how I felt, seeing things such as a room filled with coffins. And you need to remember that this is how our clients will be feeling.

'This business is about service. Our staff are fundamentally vocational - they are not in it for the money. If we try to offer them commission for selling more expensive coffins, they just don't want to know.'

Service is a word that Hindley voices often. He points out that ten% of customers shop around for funerals, while 80% pick a provider that has been recommended.

'We send out client surveys and 50% send them back,' he says. 'About 98% of them say they would recommend us, but there is a correlation between those who wouldn't and price. If they get poor service, they think it has been bad value.'

A typical funeral costs about £2,000, but 30% of that goes to people such as gravediggers.

'We deal with about 70,000 funerals a year and winter is usually much busier than summer,' says Hindley. 'Sudden temperature changes affect elderly people. If it is very hot, say, then the death rate rises and we call in extra staff. Last summer was very busy.'

Three years after Hindley joined, Plantsbrook was snapped up by SCI, America's largest funeral chain, which merged with British rival Great Southern. He ran the business and in 2002 led a £235m management buyout, backed by venture capitalist Montagu.

'There are two reasons for the flotation,' says Hindley. 'We want to pay off expensive debt. Also, this business thrives on stability and you need to make sure that there is stability of ownership.

'If you are backed by a venture capitalist, they try to exit every three years and often sell to another venture capitalist. I saw flotation as an opportunity for security.'

Not surprisingly, Hindley has thought about his own funeral. It will be free. All staff working for Dignity receive this perk at pensionable age. 'I would like to be cremated and have my ashes scattered at sea,' he says.

He is not a fan of pop music at funerals, though. 'I will definitely not have We Are Sailing.'

So what about those coffin handles and ashes?

'The handles on coffins due for cremation are usually plastic. The coffins do go up in smoke. And families definitely get the ashes of their loved ones.'

Hindley is adamant on this point. 'Absolutely. Everything is computerised and each cremation takes a specific time. The cremator is then raked out.The ashes are labelled all the way through the process.'

The only items removed from bodies are pacemakers - they explode in high temperatures and can damage the brick linings of crematoria - and joints made of titanium, which do not melt.

'We bury them separately,' Hindley explains.

ABOUT 70% of funerals are cremations, but that could rise as the cost of burials increase because burial plots are becoming scarce.

Most undertakers carry out about 250 services a year.

Horsedrawn carriages are extremely popular because 'people stop and pay their respects in a way they never would with a motorised hearse', says Hindley.

Sixties gangsters the Kray twins went out in grand style, with 35 limousines at each of their funerals, costing almost £9,000.'

Their ambition was to bring London's East End to a standstill.

'The processions took for ever,' recalls Hindley.