Businesses make a profit - bad news?

Graham_Devon

I'm not saying they are my thoughts. OP asked if he had missed something. I believe he had. You can't just look at the profit made, and suggest it's good, regardless of the consequences.

As I say I'm no socialist.

I don't believe we despise all success. I believe we all have political leanings and will view success based on our own merits.

While one person may think it's great that centrica and the big 6 keep making record profits, while increasing energy prices by record amounts....another, who is struggling to get by each month, not really looking forward to paying the price of keeping them family warm, fed and washed this winter, may see it wildly differently.

People suggest solar panels, alternate forms of energy. But the people these prices increases really hurt, cannot afford these suggestions, and cannot afford upgrades for other efficiency in the first place. Government grants are fine, but they exclude a LOT of people.

Really2

Graham_Devon wrote: »

While one person may think it's great that centrica and the big 6 keep making record profits, while increasing energy prices by record amounts....

Profit should never be looked at in isolation, you need to look at turnover also.

If turnover is increasing by a greater margin than profits it indicates there is an actual squeeze on margin.

I would not be surprised if Oil and gas company's turnover are growing faster than profits.

wotsthat

Graham_Devon wrote: »

While one person may think it's great that centrica and the big 6 keep making record profits, while increasing energy prices by record amounts....another, who is struggling to get by each month, not really looking forward to paying the price of keeping them family warm, fed and washed this winter, may see it wildly differently.

Businesses are are intended to make a profit - if they don't, and make a habit of it, then they cease to be a business.

It's possible to pick any FTSE100 company and in some way imply that it's immoral that they make a profit..

BAE - making money from wars
BAT - making money from supplying addictive cigarettes
Tesco - making money from basic food needs
Banks - enough said!
Miners - raping the earth

Isn't the point of capitalism that there are winners and losers but that overall there are many more winners than there would be if businesses were not allowed to make 'excess' profits.

Graham_Devon

When it comes down to it it's an argument over morals. And we all have different personal levels. Theres no argument over whether a business's function is to make a profit. It's how it's done that causes the discussion.

To take the title of the OP "Business makes profit - bad news?"

Well yes, it is, when it comes to Swine Flu vaccinations and GSK making a profit. You could say "but it's just business", but the negotiations didn't quite go down that route, there was political pressure.

Tesco make fabulous profits, at the expense of other traders, which is why we limit their business in some ways.

How about if we contracted a UK wide disease, that only BUPA could cure....but due to demand, they put their prices up which meant some couldn't afford the treatment and had to go without. Would that be good, because BUPA profits had risen and they had therefore increased their dividend and investors had seen their investment rise?

It's very political, and a case of morals, which varies wildly from person to person.

The answer on here, on a forum populated with landlords, investors etc, would be VERY different to the answer on, for example, mumsnet.

wotsthat

Graham_Devon wrote: »

When it comes down to it it's an argument over morals. And we all have different personal levels. Theres no argument over whether a business's function is to make a profit. It's how it's done that causes the discussion.

To take the title of the OP "Business makes profit - bad news?"

Well yes, it is, when it comes to Swine Flu vaccinations and GSK making a profit. You could say "but it's just business", but the negotiations didn't quite go down that route, there was political pressure.

Tesco make fabulous profits, at the expense of other traders, which is why we limit their business in some ways.

How about if we contracted a UK wide disease, that only BUPA could cure....but due to demand, they put their prices up which meant some couldn't afford the treatment and had to go without. Would that be good, because BUPA profits had risen and they had therefore increased their dividend and investors had seen their investment rise?

It's very political, and a case of morals, which varies wildly from person to person.

The answer on here, on a forum populated with landlords, investors etc, would be VERY different to the answer on, for example, mumsnet.

Any discussion on any forum on any subject would have a very different outcome on Mumsnet!

Profits make companies react.

Take a swine flu vaccine - simple question - who thinks the UK government could a) develop a vaccine or b) do it in a cost-effective manner. I'm certain that it's more effective to let a private company take the risk and let them take profits.

Would it be cheaper to fill a car with a tank of petrol or heat a house if we left it to the government? Would they be able to react to changes in demand? Again, I think that the profits of BP and Centrica pale into insignificance compared the hit the taxpayer would have to take.

kabayiri

I'm puzzled.

If a family is spending 15 or 20% more on energy costs than they were 18 months ago, then how do they find the spare money to make their home more energy efficient ?

The answer is of course that those with money have the ability to make that money go further, and those without are at a disadvantage.
This is evident with the new solar PV initiatives. A typical installation will cost a household £11K and start to pay back after 7 years.

£11K is out of reach for many right now.

ess0two

Shell from 01st August will have no UK assets to speak off,BP have some rigs etc in the North sea.

MFW_10YRS_4

kabayiri wrote: »

I'm puzzled.

If a family is spending 15 or 20% more on energy costs than they were 18 months ago, then how do they find the spare money to make their home more energy efficient ?

The answer is of course that those with money have the ability to make that money go further, and those without are at a disadvantage.
This is evident with the new solar PV initiatives. A typical installation will cost a household £11K and start to pay back after 7 years.

£11K is out of reach for many right now.

A lot of energy companies are giving free loft insulation and cavity wall insulation away. Plus if the home is in receipt of benefits (childrens tax credit, pensions credit, DLA, etc.) they qualify for grants that can be upto 100%:

http://www.freeinsulation.co.uk/apply/step1.html?gclid=CK7a4vHro6oCFcRO4QodmXuvVQ

Households that qualify (i.e. correctly oriented roof, no shade, etc.) can get free solar (or £99 in the example below) where the company installs the panels and claims the government Feed in Tariffs, but the home owner gets to use the electricity generated:

http://www.eonenergy.com/At-Home/Products/Generate-your-own-energy/SolarExchange/?CCODE=RP001&WT.mc_id=RP001

Graham_Devon

Robert Peston has now written a blog article on this issue:

But what may upset financially squeezed customers and energy campaigners is that Centrica's dividend has been increased by 12% - and the group's chief executive says that with the help of the recent price rises profits for the year as a whole should rise.

So pain for customers is a reward for shareholders. Now these are not two distinct groups: millions of people hold British Gas shares indirectly through their pension schemes.


But, if asked, many of those saving for a pension would probably sacrifice the dividend for lower energy prices.

http://www.bbc.co.uk/news/business-14322560

Lots more in there, including what punters think.

wotsthat

Graham_Devon wrote: »

Robert Peston has now written a blog article on this issue:

http://www.bbc.co.uk/news/business-14322560

Lots more in there, including what punters think.

Quite a balanced point of view from Robert Peston. The views of the punters are not quite as middle of the road!

Some increased profits from other companies today where we could get morally indignant if we wished

Rolls-Royce - the UK's biggest exporter - carbon dioxide emissions
BT - excluding rural communities from the 'net