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British Gas Profits

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Why do people think 740 Million is excessive money for a company of BG's size. I just watched the BBC news and you would think they were making £400 per house per month rather than just £4.

I also find that they fail to highlight what the supermarkets make in profits every year, you never hear them screaming about the price of Milk or Bread that is always climbing in price.

I am looking forward to no doubt what will be a terrible MSE article about these profits, will it mention investments ? The BG trust Fund ? The Freebies that the BG customers ?.

The British Public show there Ignorance with these sort of things but its not really there fault as they are spoon fed this media spin every year.

I mean they didn't ever mention the EDF had held there prices until March, what about the good things that all the suppliers do for the public and economy it often goes un mentioned.


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Comments

  • Gerrard maybe you would have been better waiting for a BG bashing thread to start, instead of making your own? ;)

    PS I think we might work in the same place :D
    mardatha wrote: »
    It's what is inside your head that matters in life - not what's outside your window :D
    Every worthwhile accomplishment, big or little, has its stages of drudgery and triumph; a beginning, a struggle and a victory. - Ghandi
  • MillicentBystander
    MillicentBystander Posts: 3,518 Forumite
    edited 24 February 2011 at 1:43AM
    Some friends of ours switched allegiance from Tesco to Sainsburys on our recommendation and were astonished to discover they could actually just start shopping at Sainsburys straight away, no need to continue shopping with Tesco for 6-8 weeks. And, get this, Tesco didn't even charge them a fee for leaving. I mean, how good of them is that? They were over the moon. As were we, obviously.
  • I think what a lot of folks find hard is the reported increase in profits per customer the power co's are making since they all upped unit rate costs, and the cost of a barrel of oil is still lower than Summer 2008 when they peaked (yes I know there are other factors that help dictate cost of domestic energy)but overall, all of the big six particularly are struggling to genuinely justify price increases, when their profits are what they are. If the power co's didn't offer so many crappy tariffs and made it easier for folks to understand how and why they are charged what they are, that would be a massive step
  • Perhaps OP you ought to declare you first have a vested interest you in fact work for British Gas and as such you really just declare this in you frequent posts on here

    They also said on news that switching and going to cheapest suppliers saves £30 per annum, if that is correct it either shows very little saving for a bill that can be just over £1k or there is very little profit for the energy company which clearly isnt the case if they make so much money.

    In fairness most of the profit maybe due to the harsh winter we have had hence energy usage up
  • backfoot
    backfoot Posts: 2,700 Forumite
    Part of the Furniture 1,000 Posts Combo Breaker
    Hi Gerrard,:)

    I honestly think that it is a false comparitor to use Supermarkets as a benchmark for Retail Energy Sales. Food and the associated shopping that they now offer are in a highly competive market offering different quality items in different environments. Energy is an essential need for the basics of heat and light. The latter Sector,once being State run and State owned, then used all its surplus as Reserves and Reinvestment.

    The difference now of course,is that a chunk of that Surplus is attributable to shareholders,siphoning off amounts which are dependant on Dividend Policy and rates of return required often by Foreign Group holding companies.

    I think many years down the line, on the basis of the initial ideology, many observers fail to see that the expectations have been met.
    Competition has shrunk in terms of companies competing, price mechanisms are confusing, marketing is not transparent and most disappointingly customer service as you well know is abysmal.

    The Energy companies, BG included, provide good employment opportunities and are an essential part of our infrastructure. I would like to think they were world class but under the operating model existing at the moment,with attrocious regulation, we have found ourselves with a dog's dinner.

    It's against these experiences, people get upset by profit figures whatever their size.
  • Would be nice if all that £740 million stayed here in the UK and maybe was used to help improve our pathetic gas storage facilities, for instance. But a goodly proportion of it will end up in shareholder's pockets. Can't be right when the company are providing a product that the UK public can't actually choose to have or not. It's essential to life itself and for that sort of product to be in private hands can never be right in my book.

    I hope Thatcher is proud of her actions.
  • Cardew
    Cardew Posts: 29,060 Forumite
    Part of the Furniture 10,000 Posts Name Dropper Rampant Recycler
    backfoot wrote: »
    Hi Gerrard,:)

    I honestly think that it is a false comparitor to use Supermarkets as a benchmark for Retail Energy Sales. Food and the associated shopping that they now offer are in a highly competive market offering different quality items in different environments. Energy is an essential need for the basics of heat and light. The latter Sector,once being State run and State owned, then used all its surplus as Reserves and Reinvestment.

    The difference now of course,is that a chunk of that Surplus is attributable to shareholders,siphoning off amounts which are dependant on Dividend Policy and rates of return required often by Foreign Group holding companies.

    I think many years down the line, on the basis of the initial ideology, many observers fail to see that the expectations have been met.
    Competition has shrunk in terms of companies competing, price mechanisms are confusing, marketing is not transparent and most disappointingly customer service as you well know is abysmal.

    The Energy companies, BG included, provide good employment opportunities and are an essential part of our infrastructure. I would like to think they were world class but under the operating model existing at the moment,with attrocious regulation, we have found ourselves with a dog's dinner.

    It's against these experiences, people get upset by profit figures whatever their size.

    Without doubt the competition has shrunk since privatisation, but the reasons for this situation should be examined.

    The scores of firms who 'jumped on the bandwagon' after privatisation thinking they were bound to make huge profits have simply found that the competition was too fierce, margins were too tight, and they couldn't make the enterprise pay.

    The central issue is surely to determine if BG's profits are excessive. In 2010, £740 million for 18 million customers is £41 per customer - this in their record year, with a very cold December. Previous years profits have been £20 to £30 and even a loss one year.

    It is also pertinent that the UK has just about the cheapest gas and electricity in Europe(excluding the former Eastern Block countries)

    Your secondary points about the poor regulation and indeed privatisation itself("selling off the family silver") are agreed. Although prior to privatisation, the gas and electricty industry was hopelessly inefficient and any change strongly resisted by powerful Unions - like many of the Nationalised industries.

    IMO the area that merits closer attention is the tie up between the Distribution companies and the Supply companies e.g. Centrica and BG.
  • Plushchris
    Plushchris Posts: 3,592 Forumite
    I too hate the way the media spin these stories to sound like they are actually robbing us blind.

    A British company, that employs tens of thousands of people making a profit?? How very dare they!!
    Missing Tesco R&R since Feb '07 :A & now a "Tesco veteran" apparently! ;)
  • savemoney
    savemoney Posts: 18,125 Forumite
    Part of the Furniture 10,000 Posts
    well considering most of the utility companies are owned by foreigners, BG has something going for it, although many shares may be foreign owned

    That said, energy is essential for life and therefore is should always be scrutinised to make sure that there isnt excessive profits. I accept profits have to be made given deregulation and obviously there will more more profits when usage is high
  • I agree with the OP. There is an article in the Mail showing profits over the years. EDF had markedly declined since last year, perhaps they should've extended thier price hold until they reached zero?

    People LOVE a good moan, but the fact is its a LOT more complicated than people realize. In fairness there is an article on thisismoney (so I presume its in the paper too) which tries to examine the relationship between wholesale prices and retail prices.

    I'm still waiting fora paper to compare prices between countries, unless this is done accurately how can we say we're being ripped off?
    Mixed Martial Arts is the greatest sport known to mankind and anyone who says it is 'a bar room brawl' has never trained in it and has no idea what they are talking about.
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