I dont disagree with the employed route as long as they done use them for cheap labour then fire them off

For example an office admin apprenticeship – no offence but that wont take 2 years of training with day release to master the skills needed

I just object to the fact that college pull down loads of money to train folk for jobs that dont exist knowing they will never ever work in that industry ever.

See also the rise in training people to do “forensic Science” as another example

Sound production and media courses, along with games design and many more.

To many kids chasing dreams of the media, that dont exist.

teamhurtmore – Member

EDF makes a return on capital of just over 6% with debt almost 200% of equity. Hardly a vast profit making business?

Well in that case I feel indebted to the French government for unselfishly allowing EDF to keep British consumers supplied with electricity.

And all for a mere £1.7billion profit last year – a piddling little sum which would be of absolutely no use whatsoever to the British government. Obviously.

£1.7bn in isolation doesn’t tell you anything. It could be a lot or a little depending on the capital employed in the business. In this case, it isn’t a lot compared with the capital employed.

Why do they even bother eh ?

Makes you wonder doesn’t it? No surprise that EDF share price is down 46% since it was listed when the market in France (Cac 40) is down 20%over the same period. Easy money?????? The poor old French government who own 80odd% of EDF!!!

A 7.5% increase in EDF UK profits last year and an 8.5% increase the previous year, all despite the economic downturn.

And yet the French government still wants to provide electricity to UK consumers ! What is the reason for such generous and altruistic behaviour ?

E_L, you know well enough that there is a difference between profits and profitability. Imagine they made 1p profit last year and 2p the next. 100% in an economic downturn. So what? Irrelevant. Still 2p(ignoring the capital employed for simplicity)

Compare the profits made by banks 2011 v 2012. Are they in good health despite the change?

edit: to put into context about the Fr government and price tariffs for EDF. From the WSJ:

Ms. Batho’s reaction underscores the ongoing difficult economic equation for the French government which wants to preserve households’ budgets during the dire economic crisis but also needs to grant EDF, which is state-controlled, a means of economic profitability and eventual viability.

My highlights!

OK mate, you’ve made your point – electricity supply is a business which anyone with any business sense wouldn’t get involved in. So luckily the £1.7billion profit EDF made in the UK last year won’t be going to the UK government.

I will leave you to decide if profits per se are important, or profitability ie, profits in relation to the capital employed. Seems we differ on this point!

Time for Newsnight now, to see dear Old George’s performance analysed!!

EDIT: I guess if I was making £1.7 billion I would not be all that arsed to pin dance with my accountant about semantics as i reckon i could get by 😉

We are not talking about a £2 billion investment doubling profit from 1p to 2p – now are we? We are discussing billions of profits.

Compare the profits made by banks 2011 v 2012. Are they in good health despite the change

Perhaps we as a people and a govt could do more…I mean baling them out, quantitative easing, Merlin project and the rest was not enough for them…..and they are trying so hard to meet their end of the bargain arent they 😕

From the article you quoted in your edit teamhurtmore :

The French government last year decided to cap power regulated tariff increases to 2% a year, to help protect households’ spending power as much as possible.

Last December EDF increased its prices to UK customers by 10.8%.

So the French government is using price increases and profits from UK consumers to subsidise French consumers and protect their living standards. Clever feckers.

French Govt Says Won’t Allow Higher Recommended Power Tariffs

JY, please don’t use that first comment if you are going for a CEO role! £1.7b on its own, tells you very little. Nothing to do with accountants, merely understanding what profitABILITY means.

Banks are not playing their part clearly. I referred to that earlier – hence the problem with current policy mix. But then again, we expect banks to lend despite the fact that they don’t have enough capital to meet new standards. What’s the phrase? Make your mind up, regulators!! What do you want, because you sure as hell aren’t going to get both at the same time!

Not that simple Ernie, I’m afraid. That would require some pretty roundabout logic. Anyway, Nnight is boring and hospitals have tired me out. Bon nuit as those lucky (?) Frenchies would say!

Sound production and media courses, along with games design and many more.

To many kids chasing dreams of the media, that dont exist.

Er…. computer game design and creative arts (music, design etc) generally are quite successful export industries I believe.

Not that simple Ernie, I’m afraid.

Careful, you’re only sounding moderately patronising here.

That would require some pretty roundabout logic.

You’d know all about that wouldn’t you.

Not that simple Ernie, I’m afraid.

No its clearly very complicated. I can see that I’m just going to have to take your word for it, especially as you’re so tired.

After all it takes “some pretty roundabout logic” to understand that it makes perfect sense for the French government to own a British utility company, but no sense at all for the British government to own it, and I just don’t possess this roundabout logic.

JY, please don’t use that first comment if you are going for a CEO role!

Probably the most useful advice i will ever get on STW if I get the job I will hire you as a lacky for that top tip.
PS the wink may have given something away 🙄 but cheers for the patronising

Earlier Wednesday, France’s power regulator Commission de Regulation de l’Energie recommended that regulated tariffs are substantially increased as soon as this summer to help power producer Electricité de France SA (EDF.FR) match its production and distribution costs.

I thought this was pretty clear tbh especially the bit where the govt said no

computer game design and creative arts (music, design etc) generally are quite successful export industries I believe.

Indeed they are but that does not mean that all we train in these industries get jobs in it

THM is doing pretty well trying to explain things to people who appear to know fk all about his subject, I applaud him for that 🙂

1. We do not try and do full employment.

I seem to remember reading that full employment is actually a bad thing for the economy in the long run, and everyone’s actually worse off if we try for it. Of course, that’s not the same as making some people long-term unemployed. If you have 0.5m unemployed each year, it’s not necessarily the same 0.5m people.

2. The tory chancellor Lamont once said , rather famously, that unemployment was a price worth paying

A throw-away remark taken out of context by a **** 20 years ago – yeah good evidence, that’s really sewn the debate up 🙂

THM is doing pretty well trying to explain things to people who appear to know fk all about his subject, I applaud him for that

Even if you think that’s true, why does he have to be so pompous and condescending? I’ve read articles by Nobel-prize winning economists and they aren’t constantly being massively patronising and trying to show off how much jargon they know, despite presumably knowing a fair bit more about the subject.

I didn’t think he was being condescending.

If he was being condescending, I think he needs to increase his efficiency. I (and I’m sure, his shareholders) would have expected a far greater level of pomposity given the raw material he had to work with.

All I read was a pretty concise bit of information delivered in a light-hearted way. Poor show.

No he wasn’t (but thanks mol!) And jargon use? Wow, to make the simple but important distinction between profits and profitability is hardly hiding behind jargon. And it is key.

But if it sounded patronising, then apologies (seriously). But for the grum, JY, Ernie troika to become overly sensitive about someone pointing out factual errors is a little bit funny when that seems to be one of their daily delights on STW!

But this is a thread about what to do in economically depressed areas such as certain parts of Wales. And the slight (unintended on my side) biff is valuable as it raises an important point about the role of government. Its easy to forget that governments do not have money on their own. They raise it from us and from those they borrow from. They have a responsibility to use that money in a sensible fashion, balancing often conflicting demands with the need ultimately to make a adequate return on both sources of funds. Successful urban regeneration does exactly that – most of the case studies show how different parties (public, private sectors, planners, local representatives etc) work TOGETHER to make successful projects work. This does not equate to throwing money down the drain or accepting bad investment returns – and to come back to EDF, yes a 6% ROCE when your cost of capital is circa 10% is a bad return. And who loses? The French taxpayer. So it really isn’t that simple is it – and certainly not the case that the French government has devised this wonderful scheme to screw us to ensure that French people pay low utility bills. Perhaps that is why people much cleverer than me, writing in the WSJ conclude that something needs to be done to make the company viable eventually!

ernie_lynch – Member
especially as you’re so tired.

Yes, you will have to excuse me. Tending to my closest relative dying in hospital is tiring I’m afraid. But thanks!

When we have our regular forays into subjects like this, THM’s posts are the some of the most informative and unbiased. He’s not condescending in the least IMHO

molgrips – Member

THM is doing pretty well trying to explain things to people who appear to know fk all about his subject, I applaud him for that

So has he changed your mind then molgrips ?

On the previous page you said :

Ernie – I’m not a rabid socialist, as I’m sure you know, but I do firmly believe that certain things should be nationalised. Utilities being one of them.

teamhurtmore then waded in to claim that EDF’s UK operations were an example of poor business performance and that their £1.7 billion profit last year was unimpressive.

Has this changed your mind that utility companies “should be nationalised” ?

If it has, it does indeed give testimony to the claim that he can “explain things to people who appear to know fk all about his subject”.

Perhaps he can offer his services to the French government who presumably know **** all and should ditch EDF’s UK operations, as it continues to make profit from British consumers ?

Whether a utility company should be in public or private hands is a different question altogether.

My point was to ask whether a £1.7b profit was good, bad or neither since on its own it cannot be determined. Given that the company’s cost of capital will be around 10%, then generating a return that is 4 percentage points (400bp for the jargon!) below that (6%) is not good performance. But if you want to pay CEOs handsomely to deliver that then so be it. I wouldn’t. Judging by the very poor returns from EDFs share price since listing (2x as bad as the average French company roughly speaking) other agree with me!

And who loses? The French taxpayer.

French taxpayers are subsidising British consumers ! Brilliant ! 😀

THM is doing pretty well trying to explain things to people who appear to know fk all about his subject, I applaud him for that

Your follow up post to that was rather amusing .. I shall let him reply to you as you seem to fall in that camp as well

But if it sounded patronising, then apologies (seriously). But for the grum, JY, Ernie troika to become overly sensitive about someone pointing out factual errors is a little bit funny when that seems to be one of their daily delights on STW!

What would your reply be to the “over sensitive” factually incorrect if you did choose to patronise the hypocrits?
You cannot help yourself can you [ that rhetorical by the way]
For you to apologise in that manner is a proper face palm moment if genuine and snidey if deliberate.

Binners is correct you are very knowledgeable on this and far more knowledgeable than the rest of us but I assume you are used to dealing with folk who know less than you and I doubt this is your pedagogical style

Sorry for you personal situation at this difficult time

Junkyard – lazarus
Sorry for you personal situation at this difficult time

Thank you JY. We rarely agree (but nice when we do!) but at least you are a gent. Appreciate the comment, its a bloody tough time.

But on the rest – go back a page. My first comment is about the need for a functioning banking system and why IMO EDF is not a business making vast profits (with a clear reason why). This is followed by some sarcy replies which I responded to in a factual manner. After more sarcasm, the basic point was grudgingly conceded. You still seemed to have an issue about the £1.7b, hence the slightly exasperated comment about profitability and CEO roles (poor low blow, sorry!).

Re the “not that simple stuff” – well it isnt is? Late at night is not the time and STW is not the place to go into why not. Hence the comment. In hindsight, I re-read the next morning, and recognised that is could have been misread. Hence the apology. But yes, it is rich for you guys (who I enjoy debating with) to get so touchy. Perhaps grum, given his ability to master the works of nobel-award winning economist could provide us all with an explanation of how edf works? It would be good to know as I can’t understand the complexities of how and to what extent UK electricity is subsidising other activities including – current and future nuclearr energy in the UK, the expense of decommissioning nuclear plants in France etc. Now the CEO of edf has stated that the UK and France electricity are run as independent energies. Ernie’s comments suggest that he is being “economical with the truth” which in his position is very serious/illegal. So who is right?

I await the simple, easy to understand, explanation of how this all works. But for me, it remains “not that simple, I’m afraid.” I hope grum can help us all.

THM do you actually work in the City? I only ask cos I am down there occasionally myself 🙂

Not any more, but do visit quite regularly and may be tempted back one day! It would be hard to read STW with the old job!!

Well quite, they do work you quite hard there!

Ernie’s comments suggest that he is being “economical with the truth” which in his position is very serious/illegal. So who is right?

Economical with what truth ? I said I thought EDF’s UK operations, along with other utilities, could be nationalised and their profits used by the UK government.

You posted a comment claiming that you were unimpressed with EDF’s UK profits, fair enough you’re entitled to say that, and I’ve got no problem with it.

So where exactly is the bit where I have been “economical with the truth” ?

Ernie, you suggested yesterday that UK customers may be subsidising French consumers (among the sarcy comments). The CEO has publically stated that the two businesss are run independently without cross-subsidisation. So I am suggesting that you believe that he ( not you!) is being less than honest. You may be right. In which case that is very serious. So if someone could explain simply we would all benefit, wouldn’t we?

teamhurtmore – Member

I hope grum can help us all.

Some people would call that a highly patronising comment. Personally I couldn’t give a monkeys as it greatly amuses me when people behave like that, although I suspect it might bother grum.

Anyway it’s all a bit of a red herring and tangent to the topic/OP. The crux with edf and others is the extent to which nuclear power and renewables should be subsidised and the transparency issues that go with it. But that is another thread.

EDF’s UK operations is wholly owned by the French parent company which is in turn 85% owned by the French government. Where exactly do you think the £1.7 billion profit EDF made in the UK last year went?

Good question. I had a look but found it hard to get my head round, but here you go….

http://shareholders-and-investors.edf.com/fichiers/fckeditor/Commun/Finance/Publications/Annee/2013/EDF2012_fin_full_va.pdf

Loads of funnies to get your head round there, but beyond me…..

Good question. I had a look but found it hard to get my head round

I’m sorry I assumed you knew since you appeared to be criticizing my comment.

Anyway what’s the answer ? I feel confident enough with my theory that as a rule the profits of a company go to its owners not to be bothered to read EDF’s annual report. Unless of course after reading it yourself you can tell me otherwise.

In the meantime I will carry on assuming that a significant amount of EDF’s £1.7 billion UK profit goes to the French government.

Perhaps grum, given his ability to master the works of nobel-award winning economist could provide us all with an explanation of how edf works? …..
I await the simple, easy to understand, explanation of how this all works. But for me, it remains “not that simple, I’m afraid.” I hope grum can help us all.

Can you explain how this refutes what he said?

why does he have to be so pompous and condescending? I’ve read articles by Nobel-prize winning economists and they aren’t constantly being massively patronising and trying to show off how much jargon they know, despite presumably knowing a fair bit more about the subject.

TBh given the above I am not sure that you do intentionally but you do indeed do it [ not saying you are never provoked either to be fair]

I am pretty sure ernie knows he is doing it and is trying to but he is correct on this issue IMHO

TBh given the above I am not sure that you do intentionally but you do indeed do it

He’s far more restrained than many on here, and you and ernie are two of the worst in terms of arguing style.