Originally posted by Sicilian Smaug
*There's nothing worse than a company with a monolopy on a certain industry being allowed to increase rates just to provide higher end of year bonuses for fat cats.*
Maybe you need to learn not to be such a right wing idiot.
Well, it's easy to call people names, so let's do something useful and look at the numbers. Since you mentioned British Gas, I'll look at that one. From the BG GROUP PLC 2006 Second Quarter results, the earnings per share for the second quarter (including disposals and remeasurements, which increases the stated earnings figure) is 12.0p. The current LSE share price of British Gas is 717.00p. So, dividing 12.0p by 717p gives 0.01674p per share quarterly earnings. Multiply that by 4 to get an annual figure, and you get an annualized earnings per share of 6.7 percent. Not exactly what I'd call excessive profits.
In fact, most business owners would be very unhappy with earnings that low. For a business to stay competitive, it has to earn profits above the return of riskless investments such as government bonds. If a business can't earn profits higher than riskless investments, the business will either go bankrupt or will shrivel up and die due to lack of capital. Granted, monopolies don't have the worries of going out of business. However, that's why they are regulated by governments. I'm simply contending that a 6.7 percent annual profit is not anything for a company to brag about.
I eagerly await your intelligent rebuttal.