MSE News: Energy firms' profits soar, as they hike our prices

Butterfly_Brain

This is the discussion thread for the following MSE News Story:

"Recent hikes have increased profits enjoyed by Britain's big energy firms to £125 per customer a year, from £15 in June ..."

Read the full story:
Energy firms' profits soar, as they hike our prices

Thanks to Butterfly Brain for the original post, below

I was so angry to hear on the news today that the profit that energy companies make from each of us has gone from £15 per person per annum in June to £125 per person per annum now, if that isn't profiteering I don't know what is :mad: Ofgem are just a powerless piece of S**t that should just be disbanded to save tax payer's money :mad::mad:

macman

On the other hand , when it was £15 profit pa (less than1%) a year ago, it make you wonder why they bothered at all?
Even at £125 it is about 9% margin on a typical dual fuel cost of £1350pa.
Can you name a business which does not at least aim to make a margin of around 10%? I think you'll find that Tesco made considerably more profit per customer than any of the big 6 last year-why are they not seen as profiteering?

raider

Here is a link to the article on BBC News:

Energy firms' profit margins soar, Ofgem says
The profit margin for energy firms has risen to £125 per customer per year, from £15 in June, says regulator Ofgem.

http://www.bbc.co.uk/news/business-15302723

MillicentBystander

macman wrote: »

On the other hand , when it was £15 profit pa (less than1%) a year ago, it make you wonder why they bothered at all?
Even at £125 it is about 9% margin on a typical dual fuel cost of £1350pa.
Can you name a business which does not at least aim to make a margin of around 10%? I think you'll find that Tesco made considerably more profit per customer than any of the big 6 last year-why are they not seen as profiteering?

Do your research before posting. Far be it from me to defend Tesco (I actually detest them as a company and I love the way utility company apologists/employees always seem to use them to justify their company's practices, lol) but their gross profit in the first half of this year worked out at 5.3% of turnover. Back to the drawing board with that theory, macman.

Swipe

So much for the recent price rises that were necessary to cover to wholesale costs. Ever get the feeling we've been had?

davidgmmafan

Even I can see the hole in that, this is what was said

"Can you name a business which does not at least aim to make a margin of around 10%?"

No observation of what a company actually makes, but what they aim for...

ChiefGrasscutter

I'm with poster 'macman' on this one.
A 9% gross margin does sound low.
Try and find a plumber working for that for that sort of return..............

TIMMY85

Swipe wrote: »

So much for the recent price rises that were necessary to cover to wholesale costs. Ever get the feeling we've been had?

If prices didn't go up to cover rising costs there would not be profit.

backfoot

ChiefGrasscutter wrote: »

I'm with poster 'macman' on this one.
A 9% gross margin does sound low.
Try and find a plumber working for that for that sort of return..............

I'd reconsider.

Which of your plumbers has a customer base of 6 million.:rotfl:

backfoot

TIMMY85 wrote: »

If prices didn't go up to cover rising costs there would not be profit.

The issue highlighted by Ofgem is the rapid escalation of the profit. The point made by Swipe relates to the increased profit over and above any cost rises.

MillicentBystander

I was going to say in my post post 'Awaits arrival of usual utility company employees to wade in to this thread'. Wish I had now, lol. Mystic Meg has nothing on me. I once knocked on her door and said I'd come for my 3pm appointment. She asked me if I'd booked and i said no, but surely you knew I was coming? Useless.

PS Talking of Tesco, some friends of ours were loyal Tesco customers for years but decided to switch to Asda as it was cheaper. They rang Tesco and told them they were switching to Asda and asked how long it would take and how much would the penalty be?