Anyone felt the pinch yet?

Notice a good proportion of my hotels are quiet this week. But with the jubilee round the corner and pride the week after maybe folk are simply saving their trips for that.

Cant help but feel the media are driving a lot of it. They seem hell bent on us heading into a recession. Making people panic and stop spending.

They should be telling everyone its all gravy.

Only area Ive felt it is diesel. £154 to fill my van the other day. That's taking the piss.

1 hour ago, Whitesince63 said:

These companies, especially Centrica have made significant losses over recent years so why when the market turns shouldn’t they make a decent profit? Their plans are to reinvest that profit into new technologies like wind, solar and nuclear as well as restoring our Rough gas storage facility in the North Sea. They have also restored a small dividend which will help investors and the pension fund you’re probably in so why has everything got to be a negative because companies make a profit? Tell me you don’t use Social Media or the likes of Amazon who make far more profit than the likes of Centrica and Lloyds but I don’t hear you moaning about that.

Correct.

They are allowed to make profits. Indeed without profit, our society wouldn't exist. 

My only concern is the sheer scale of the increase. If they still sell roughly the same amount of gas, and make the same amount of profit on it, why would it increase so much? 

Perhaps Tyldesley white can shed more light, but I can only assume that the profit is a percentage of the cost price bolted on top, rather than just a relatively fixed amount.

Therefore, could they bring the price down a little by reducing the margin while the wholesale price is so high?

That apart, they're also being taxed at over 60% now the windfall increase has been applied. That should yield an extra lump for the state which will he being used for our handouts, debt repayment etc, so there's a complex situation at play. 

Can see how the various approached to the situation are being played out in the leadership debates, with LT preferring to cut tax and pay debt later, like many other nations, or RS with his debt down, inflation down approach.

6 minutes ago, Burnden Pies said:

Centrica has been horrendously run for years, that's why the profits and therefore dividends paid were poor to non existent. The same senior management group who managed to get the share price down from well north of £2 to less than 30p over a couple of years are now boasting of record profits. Go figure 

They aren't the only ones who have had low profits though. Seems to be a market that fluctuates quite a bit.

15 minutes ago, Tonge moor green jacket said:

Correct.

They are allowed to make profits. Indeed without profit, our society wouldn't exist. 

My only concern is the sheer scale of the increase. If they still sell roughly the same amount of gas, and make the same amount of profit on it, why would it increase so much? 

Perhaps Tyldesley white can shed more light, but I can only assume that the profit is a percentage of the cost price bolted on top, rather than just a relatively fixed amount.

Therefore, could they bring the price down a little by reducing the margin while the wholesale price is so high?

That apart, they're also being taxed at over 60% now the windfall increase has been applied. That should yield an extra lump for the state which will he being used for our handouts, debt repayment etc, so there's a complex situation at play. 

Can see how the various approached to the situation are being played out in the leadership debates, with LT preferring to cut tax and pay debt later, like many other nations, or RS with his debt down, inflation down approach.

You are right , it is not just the energy companies , the banks make a nice turn when interest rates move as by the timing of investment changes compared to lending and not always passing the full impact on.

In terms of LT v RS based on the high level offers it is a no brainer 

LT - I will cut taxes now which help people out now and we will repay the debt over a longer time but as the economy will recover it will be ok

RS- I am less likely to to cut tax now as we need to repay the debt and once that is improved we can cut taxes. The economy will recover.

So jam today v jam tomorrow. Unless you are able to actually work out what it means in terms of recovery speed and level, which no one really knows the LT deal is more attractive. I personally have more faith in RS but can see why people will support LT. 

Edited July 29, 20223 yr by Ani

1 minute ago, Tonge moor green jacket said:

They aren't the only ones who have had low profits though. Seems to be a market that fluctuates quite a bit.

I worked for Centrica for twelve years and have also been a shareholder. Yes profits did fluctuate like that of all companies, but were within a relatively healthy range. New senior mgt group came in and made some catastrophic decisions - outsourcing customer services abroad that then had to largely reversed; acquisitions in the US and elsewhere that lost millions, several UK company reorganisations that were ill thought out and badly executed. Consequently a share price that was always within a healthy range plummeted, meaning for the first time ever there were no dividends paid. Meanwhile the CEO and Chief Exec continued to get bonuses and salary increases.

Nothing to do with Covid and hardly anything to do with market volatility.

And this same Senior Mgt group will now be making out that these record spikes in profits is somehow nothing to do with profiteering from the current energy situation but instead is down to their wise decision making and excellent stewardship.

More bonuses all round I reckon!

25 minutes ago, Burnden Pies said:

Centrica has been horrendously run for years, that's why the profits and therefore dividends paid were poor to non existent. The same senior management group who managed to get the share price down from well north of £2 to less than 30p over a couple of years are now boasting of record profits. Go figure 

Worse than that Pies and I wholly agree with you on the management. I’ve held shares in Centrica for many years and considered anything under £3 a bargain so I’m still well under water at todays price. Incidentally, the current profit margin equates to £13 per customer so please explain to me where the profiteering is?

59 minutes ago, Ani said:

Have Amazon announced results this week? 
 

I posted previously about the big companies profits increasing , not sure really what your point is. Mine is the big companies are continuing to make significant profits whereas the news is all about how tough times are. We have rampant inflation but company after company are reporting earnings ahead of plan, does that not seem unfair ? 
 

You pick social media companies out and I would be delighted if they were also expected to contribute more. 

But they won’t contribute more and as Amazon are an international company our government could never apply a windfall tax to them or any of the other internet behemoths. Similarly our government can’t impose windfall taxes on US oil and gas companies, or Middle Eastern, or South American, or Russian or even European ones like Total. All of these are competitors of our own BP and Shell yet I haven’t heard of any of these being stuffed with a silly windfall tax. Shell and BP are world majors and invest worldwide. They pay significant amounts of tax including a whopping £127m last year and you can expect at least the same this year. Like you I fully accept that times are hard and people are struggling and it seems ridiculous that these companies make vast profits on the back of it but I’d much rather they invested that cash back into UK energy sources for future savings than force them to invest overseas where they won’t get clobbered.

4 minutes ago, Whitesince63 said:

But they won’t contribute more and as Amazon are an international company our government could never apply a windfall tax to them or any of the other internet behemoths. Similarly our government can’t impose windfall taxes on US oil and gas companies, or Middle Eastern, or South American, or Russian or even European ones like Total. All of these are competitors of our own BP and Shell yet I haven’t heard of any of these being stuffed with a silly windfall tax. Shell and BP are world majors and invest worldwide. They pay significant amounts of tax including a whopping £127m last year and you can expect at least the same this year. Like you I fully accept that times are hard and people are struggling and it seems ridiculous that these companies make vast profits on the back of it but I’d much rather they invested that cash back into UK energy sources for future savings than force them to invest overseas where they won’t get clobbered.

Ok you have lost your money buying Centrica shares so understand your ire.

 

16 minutes ago, Whitesince63 said:

Worse than that Pies and I wholly agree with you on the management. I’ve held shares in Centrica for many years and considered anything under £3 a bargain so I’m still well under water at todays price. Incidentally, the current profit margin equates to £13 per customer so please explain to me where the profiteering is?

Think you've answered you're own question. Company does badly for years. Suddenly same company does extremely well. Without any discernable change in policy or management 

Spot on this.

 

42 minutes ago, London Wanderer said:

The point is that many of these companies have increased their profits significantly throughout the pandemic... Tough times ahead this winter, It will be very tight for me & I'm one of the lucky ones. Folk will be making choices that nobody in 21st century Britain should be making. Many already are. Yet the big energy companies will continue to make huge profits. Just in the news yesterday that British Gas are making huge profits off this crisis. Struggling to see why you think that's a fair situation? Because they might invest in offshore wind or solar? Whilst millions can't heat their homes.

Profit should trickle down to us all & I'm yet to see any evidence that it is. Rather the opposite. Happy to be proven wrong though.

And yes Facebook & Amazon are just as bad. Thanks for pointing that out 👍

Like you LW, I’ll probably be alright but still very stretched all the same but I do accept that many won’t but that’s not the problem of energy companies just because market forces dictate that. It’s the job of government to look after people not private companies. Centrica, like Shell, BP and other energy companies pay significant amounts of tax into the U.K., unlike ALL of the internet giants, so I don’t accept they’re not doing their bit. On your earlier point though about them making vast profits from the pandemic, in fact all three made huge losses during that period and at one point oil was even in negative territory Both BP and Shell were forced to sell otherwise profitable businesses to keep going and look how much they’re being forced to lose through shares in Rosneft that they’ve now been forced to write off. The oil price won’t stay at this level forever and will settle down once a resolution is reached in Ukraine but until then let’s not hamstring these companies further by reducing their ability to invest in energy security here.

22 minutes ago, Whitesince63 said:

Worse than that Pies and I wholly agree with you on the management. I’ve held shares in Centrica for many years and considered anything under £3 a bargain so I’m still well under water at todays price. Incidentally, the current profit margin equates to £13 per customer so please explain to me where the profiteering is?

If they make 1.3bn profit from 10m customers is that not £130 per customer ? In a half year ? 

44 minutes ago, Tonge moor green jacket said:

They aren't the only ones who have had low profits though. Seems to be a market that fluctuates quite a bit.

Definitely jacket, the move to renewables and the collapse of all the Mickey Mouse, so called “Energy” companies who rated their customers in the good times, then left them to come back at rock bottom prices when the tide turned badly damaged the profits of the big six. Add in Corbyns threat to nationalise and there have been many headwinds. It seems to be feast or famine but isn’t it always? 🥴

1 minute ago, Whitesince63 said:

Definitely jacket, the move to renewables and the collapse of all the Mickey Mouse, so called “Energy” companies who rated their customers in the good times, then left them to come back at rock bottom prices when the tide turned badly damaged the profits of the big six. Add in Corbyns threat to nationalise and there have been many headwinds. It seems to be feast or famine but isn’t it always? 🥴

FFS blaming Cronyn 🤡

34 minutes ago, Burnden Pies said:

I worked for Centrica for twelve years and have also been a shareholder. Yes profits did fluctuate like that of all companies, but were within a relatively healthy range. New senior mgt group came in and made some catastrophic decisions - outsourcing customer services abroad that then had to largely reversed; acquisitions in the US and elsewhere that lost millions, several UK company reorganisations that were ill thought out and badly executed. Consequently a share price that was always within a healthy range plummeted, meaning for the first time ever there were no dividends paid. Meanwhile the CEO and Chief Exec continued to get bonuses and salary increases.

Nothing to do with Covid and hardly anything to do with market volatility.

And this same Senior Mgt group will now be making out that these record spikes in profits is somehow nothing to do with profiteering from the current energy situation but instead is down to their wise decision making and excellent stewardship.

More bonuses all round I reckon!

To be fair Pies, the Centrica CEO didn’t take a bonus last year and is looking like he won’t again this year but on the rest I completely agree.

11 minutes ago, Ani said:

Ok you have lost your money buying Centrica shares so understand your ire.

 

Ah, not a loss until I sell them Ani just as a profit isn’t a profit either! 😉

12 minutes ago, Burnden Pies said:

Think you've answered you're own question. Company does badly for years. Suddenly same company does extremely well. Without any discernable change in policy or management 

That’s unfair Pies. The current management isn’t the same management who wrecked the company and they’ve done a pretty spectacular job of turning it round. From a debt of £4m two years ago to free cash of £300m giving them a good platform to move forward on. They’ve had to make some tough decisions on staff but it’s a much better run outfit now than it was and hopefully will be able to contribute to the exchequer rather than reporting losses?

4 minutes ago, Whitesince63 said:

To be fair Pies, the Centrica CEO didn’t take a bonus last year and is looking like he won’t again this year but on the rest I completely agree.

The guy should have been sacked never mind anything else. But that's how it is in senior business and politics I suppose!

16 minutes ago, Cheese said:

Spot on this.

 

So you’d like to see our companies fail would you? It’s been a false market since 2019 with the pandemic and now Ukraine and some companies have definitely benefitted but for every one that has there are more that haven’t. Try looking at hospitality companies, holiday companies, airlines and cruises. Maybe we should have a bail out tax for them do you think?

11 minutes ago, Ani said:

FFS blaming Cronyn 🤡

Do you just try to be intentionally awkward because you do a pretty good job at it? And I don’t actually know who Cronyn is so perhaps you ought to learn to spell? 🤪

2 minutes ago, Whitesince63 said:

Do you just try to be intentionally awkward because you do a pretty good job at it? And I don’t actually know who Cronyn is so perhaps you ought to learn to spell? 🤪

Sorry I meant Corbyn

i am not sure you should be picking up people for being awkward. 

17 minutes ago, Whitesince63 said:

Like you LW, I’ll probably be alright but still very stretched all the same but I do accept that many won’t but that’s not the problem of energy companies just because market forces dictate that. It’s the job of government to look after people not private companies. Centrica, like Shell, BP and other energy companies pay significant amounts of tax into the U.K., unlike ALL of the internet giants, so I don’t accept they’re not doing their bit. On your earlier point though about them making vast profits from the pandemic, in fact all three made huge losses during that period and at one point oil was even in negative territory Both BP and Shell were forced to sell otherwise profitable businesses to keep going and look how much they’re being forced to lose through shares in Rosneft that they’ve now been forced to write off. The oil price won’t stay at this level forever and will settle down once a resolution is reached in Ukraine but until then let’s not hamstring these companies further by reducing their ability to invest in energy security here.

Revealed: ExxonMobil, Shell and BP among oil companies paying negative tax in UK on some North Sea operations | Climate News | Sky News

Shell and BP paid zero tax on North Sea gas and oil for three years | Oil and gas companies | The Guardian

Whilst everyone else is paying significantly more, so should these companies no? At least their fair bit of corporation tax? Often the much of the money just sits there idle whilst public services are crippled. 

 

 

6 minutes ago, Whitesince63 said:

So you’d like to see our companies fail would you? It’s been a false market since 2019 with the pandemic and now Ukraine and some companies have definitely benefitted but for every one that has there are more that haven’t. Try looking at hospitality companies, holiday companies, airlines and cruises. Maybe we should have a bail out tax for them do you think?

Eddie Dempsey represents Rail workers. Do keep up.

9 minutes ago, Burnden Pies said:

The guy should have been sacked never mind anything else. But that's how it is in senior business and politics I suppose!

Pies, I think with respect you need to do some homework pal? Chris O’Shea, Group Chief Exec only joined Centrica as CFO in 2018 and became CEO in 2020 so he can hardly be blamed for the demise of the company before then. He’s also seen a complete overhaul of his senior teams in the last couple of years so to be fair he’s done a superb job. It’s obviously changed a lot since you were there and is probably a completely different company now. I particularly like his move to employ around 1,000 ex service personnel into technical jobs where their training and expertise learned in the forces will be of benefit as well as rehabilitating these people who seem to have been sidelined by companies generally. I think he should receive much credit for what he’s done and is doing rather than getting flack for making the company profitable, especially under current rather “false” markets.

7 minutes ago, Ani said:

Sorry I meant Corbyn

i am not sure you should be picking up people for being awkward. 

Who me? 😂

5 minutes ago, Cheese said:

Eddie Dempsey represents Rail workers. Do keep up.

I know that but I wasn’t the one who brought him into this was I? Do keep up Cheesy.