British Gas profits

I feel there is a similarity between this, & the fact that "the City" has this year paid out record bonuses to the top-knobs, despite us being constantly told that we are in/entering into a recession & housing slump.
This stuff happens every year, & nothing ever changes. Money looks after money.
Matt.

quote:

Originally posted by TomK:
Up by 600%. This comes a month after they raised their prices by 15%. Does anybody else find this quite disgusting?

Yes, of course, you're right - but that's just the way it is.

Things are not fair and probably never will be - I suppose it's better than the Gas Board losing money and having to make Gas men and women redundant.

Still as one singer once sung It's all right now, in fact it's a gas.

I think this link says it all.

ATB Rotf

The BBC has presented a piece on British Gas profits, without disclosing the underlying revenues/figures. These rises in profit, without the underlying reasons for the increase, seem extreme, which is why they've been presented in that way. I doubt very much that profitability has remained the same, otherwise revenues would have to have increased by a similar percentage - highly unlikely.

Also, what was the profitability when the profits were only £95m? Pretty low i'd expect.

If you take a look at Centrica's published corporate profile, you'll see on page 7 that the £571m profit is against a revenue of £6.5bn, a mere 8.8% profit margin. If i were a shareholder i'd expect at least this amount.

http://www.centrica.co.uk/files/corporate_profile/corporate_profile.pdf

Also, if you look at the financial summary on the last page, you'll see that the 2006 profits of £95m were down from £242m in 2004, so the BBC has chosen to present the most sensationalist set of figures, the difference between a particularly good year in 2007, and a bad year in 2006.

Not quite as 'disgusting' as it has been presented to be, and more than a little disingenuous of the BBC (although they're far from alone in this respect).

If the rising costs of raw materials aren't passed on to the customer, companies end up less profitable, and could end up collapsing altogether. Companies exist to make profits and remain in business. Shareholders expect this. Pretty much all companies are quick to pass on cost increases, and slow to pass on cost reductions - your mortgage is a good example of this...

Phil

Phil is spot on, although the very limited competition, and some of the less that competitive practices of some of the main players doesn't help. But at the end of the day there is high demand and limited supply. If you want cheaper gas we need to start seriously brown nosing an increasingly authoritarian Russia that currently seems set on throwing its weight around in the international sphere, not least by using gas supply and pricing for political ends.

I know this is an unpopular position, but the only way to both have energy security and drastically reduce our greenhouse gas output is to go nuclear and end our dependence on imported fossil fuels. And this is coming from someone with a vested interest in the continuation of coal mining!

Agreed, business is business - 10M BG customers could benefit by a sum of £57, if British Gas gave back their profits in full. Would they then continue to be able to exist as a either a non-profit or loss making company? No. Would they then have to let go thousands of employees? Yes. Would that hurt us from a larger scale perspective? Yes. Would £57 change peoples lives? No.

If it was £5bn profit from a needed utility supplier, I might have an issue. However, in terms of national businesses, with this large a customer base, I don't think the figures are extreme or unreasonable.

They don't seem to have as bad a name for service as some other utility provides.

Let them get on with it.

Smacks of mountains out of molehills type media sensationalism to me.