GB Energy

Hoof_Hearted

I remember a siren voice on here warning that the owners of GB Energy may not be the best people at running a company. There is a little bit in the latest Private Eye:

"GBE's last published accounts report two egregious "related-party transactions"; purchases totalling £2.5 million from Myoffers Limited and CGF Marketing Services Limited....."

Apparently these payments were for developing and running the websites. Surprising? Apparently £2.5 million is eight times as much as the total wage bill.

SammenForLivet2

Looking at there accounts, I believe CGF Marketing Services Limited provided outsourcing solutions (essentially, the contact centre for GB Energy in Worksop). Interesting thing is that I believe GB Energy's owners have a ownership/interest in CGF, and will still seem set to benefit, as the Co-Operative members are now paying for this outsourcing contract.

Bluebirdman_of_Alcathays

Yep - Grant Findlay, company secretary (until a few weeks ago) of GB Energy is FD of DDC Outsourcing, parent company of CGF Marketing Services. I can't prove the beneficial ownership of either company, but both positions indicate a high level of operational control shared by one man.

It's actually very clever - I know from my past experience in the Energy Industry that there's very little money to be made in the energy side of things (actually trading the damned stuff) and even the best market hedges and trades don't make that much. Essentially the profitable stuff is the back office function - which in this case has been transferred to a separate entity that (presumably) is still functioning as before.

It beggars belief that companies can actually add almost no value at every stage of the operation, but add profit that is borne by the consumer. To mitigate this, I have National Grid in my investment portfolio, which has done OK for me over time, and is incredibly solid, but why on earth there have to be so many layers of cost on my bill I'll never know.