| Octopus Energy sent an e-mail - price rises up to 80% announced next week! 18:25 - Aug 19 with 2173 views | Nthsuffolkblue |
The main points:
Ofgem's October price cap announcement is due on Friday 26 August and is expected to see prices increase by up to 80%;
Some government support exists – details below – but more is needed. We are calling for a freeze on prices (details below);
Putin's invasion of Ukraine has sent global gas prices eight times higher than normal
We don't profit from this crisis: fossil fuel extractors do. We have never made a profit and will not do this year;
We'll do everything we can to protect customers – if you're struggling, let us know (see below).
How does a company run without making any profit at all? Are they some sort of co-operative? |  |
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| Octopus Energy sent an e-mail - price rises up to 80% announced next week! on 18:43 - Aug 19 with 2100 views | factual_blue |
Page four of their last accounts includes the following statement:
'+57% revenue
£1.2bn in FY20 to £1.9bn in FY21, due to growth of households on supply. +67% gross profit: grew by £36.8m from £55m in FY20 to £91m in FY21. This reflects improved operational effectiveness, as well as strategic decision from management to keep prices low and continue to invest in customer growth.'
As the hoary old accountants joke goes
CEO: 'How much profit have we made?'
Accountant: 'How much profit do you want to have made?' [Post edited 19 Aug 2022 18:55]
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| Octopus Energy sent an e-mail - price rises up to 80% announced next week! on 18:58 - Aug 19 with 2050 views | Nthsuffolkblue |
| Octopus Energy sent an e-mail - price rises up to 80% announced next week! on 18:43 - Aug 19 by factual_blue |
Page four of their last accounts includes the following statement:
'+57% revenue
£1.2bn in FY20 to £1.9bn in FY21, due to growth of households on supply. +67% gross profit: grew by £36.8m from £55m in FY20 to £91m in FY21. This reflects improved operational effectiveness, as well as strategic decision from management to keep prices low and continue to invest in customer growth.'
As the hoary old accountants joke goes
CEO: 'How much profit have we made?'
Accountant: 'How much profit do you want to have made?' [Post edited 19 Aug 2022 18:55]
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Do I take it they reinvest the "profit" without any shareholder dividends?
Surely if their accounts mention profit they are being economical with the truth to say they made none? | |
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| Octopus Energy sent an e-mail - price rises up to 80% announced next week! on 19:14 - Aug 19 with 2005 views | Ewan_Oozami |
| Octopus Energy sent an e-mail - price rises up to 80% announced next week! on 18:43 - Aug 19 by factual_blue |
Page four of their last accounts includes the following statement:
'+57% revenue
£1.2bn in FY20 to £1.9bn in FY21, due to growth of households on supply. +67% gross profit: grew by £36.8m from £55m in FY20 to £91m in FY21. This reflects improved operational effectiveness, as well as strategic decision from management to keep prices low and continue to invest in customer growth.'
As the hoary old accountants joke goes
CEO: 'How much profit have we made?'
Accountant: 'How much profit do you want to have made?' [Post edited 19 Aug 2022 18:55]
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Or as Mrs O puts it:
"How much profit do you want to be seen to have made?" |  |
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| Octopus Energy sent an e-mail - price rises up to 80% announced next week! on 19:16 - Aug 19 with 1981 views | RonFearonsHair |
| Octopus Energy sent an e-mail - price rises up to 80% announced next week! on 18:43 - Aug 19 by factual_blue |
Page four of their last accounts includes the following statement:
'+57% revenue
£1.2bn in FY20 to £1.9bn in FY21, due to growth of households on supply. +67% gross profit: grew by £36.8m from £55m in FY20 to £91m in FY21. This reflects improved operational effectiveness, as well as strategic decision from management to keep prices low and continue to invest in customer growth.'
As the hoary old accountants joke goes
CEO: 'How much profit have we made?'
Accountant: 'How much profit do you want to have made?' [Post edited 19 Aug 2022 18:55]
|
I looked at signing up with them but heard they cost an arm and a leg and a leg and a leg... |  | | |
| Octopus Energy sent an e-mail - price rises up to 80% announced next week! on 19:23 - Aug 19 with 1937 views | longtimefan |
| Octopus Energy sent an e-mail - price rises up to 80% announced next week! on 18:58 - Aug 19 by Nthsuffolkblue |
Do I take it they reinvest the "profit" without any shareholder dividends?
Surely if their accounts mention profit they are being economical with the truth to say they made none? |
Their statement doesn’t say they don’t make a profit, it says they’re not making additional profits from the crisis. |  | | |
| Octopus Energy sent an e-mail - price rises up to 80% announced next week! on 19:29 - Aug 19 with 1909 views | Nthsuffolkblue |
| Octopus Energy sent an e-mail - price rises up to 80% announced next week! on 19:23 - Aug 19 by longtimefan |
Their statement doesn’t say they don’t make a profit, it says they’re not making additional profits from the crisis. |
How do you interpret the end of the fourth point then?
"We have never made a profit and will not do this year" | |
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| Octopus Energy sent an e-mail - price rises up to 80% announced next week! on 19:34 - Aug 19 with 1889 views | longtimefan |
| Octopus Energy sent an e-mail - price rises up to 80% announced next week! on 19:29 - Aug 19 by Nthsuffolkblue |
How do you interpret the end of the fourth point then?
"We have never made a profit and will not do this year" |
Apologies. Completely missed that line  | | | |
| Octopus Energy sent an e-mail - price rises up to 80% announced next week! on 19:47 - Aug 19 with 1837 views | SuperKieranMcKenna |
| Octopus Energy sent an e-mail - price rises up to 80% announced next week! on 19:29 - Aug 19 by Nthsuffolkblue |
How do you interpret the end of the fourth point then?
"We have never made a profit and will not do this year" |
They are a relatively new company and reinvest any excess capital. Would assume that’s to aggressively gain market share, rather than any charitable reasons however. | | | |
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| Octopus Energy sent an e-mail - price rises up to 80% announced next week! on 19:48 - Aug 19 with 1821 views | Nthsuffolkblue |
| Octopus Energy sent an e-mail - price rises up to 80% announced next week! on 19:47 - Aug 19 by SuperKieranMcKenna |
They are a relatively new company and reinvest any excess capital. Would assume that’s to aggressively gain market share, rather than any charitable reasons however. |
I am still a little confused how they can claim to have never made a profit if their own accounts mention a profit, though.
They choose to reinvest all their profit in the business is a different thing to never making one, surely? | |
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| Octopus Energy sent an e-mail - price rises up to 80% announced next week! on 20:09 - Aug 19 with 1771 views | BiGDonnie |
I'm with them and my gas end electric has been £60 this month and last. Not sure how or why but it's down from over £100 each month. |  |
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| Octopus Energy sent an e-mail - price rises up to 80% announced next week! on 20:09 - Aug 19 with 1770 views | SuperKieranMcKenna |
| Octopus Energy sent an e-mail - price rises up to 80% announced next week! on 19:48 - Aug 19 by Nthsuffolkblue |
I am still a little confused how they can claim to have never made a profit if their own accounts mention a profit, though.
They choose to reinvest all their profit in the business is a different thing to never making one, surely? |
I assume they mean a surplus rather than a loss. You can still make a profit regardless of whether it goes in the bank, or reinvested as capital in the firm.
Edit: can any accountants on here confirm? [Post edited 19 Aug 2022 20:11]
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| Octopus Energy sent an e-mail - price rises up to 80% announced next week! on 20:15 - Aug 19 with 1737 views | factual_blue |
| Octopus Energy sent an e-mail - price rises up to 80% announced next week! on 19:16 - Aug 19 by RonFearonsHair |
I looked at signing up with them but heard they cost an arm and a leg and a leg and a leg... |
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| Octopus Energy sent an e-mail - price rises up to 80% announced next week! on 21:43 - Aug 19 with 1600 views | factual_blue |
| Octopus Energy sent an e-mail - price rises up to 80% announced next week! on 19:47 - Aug 19 by SuperKieranMcKenna |
They are a relatively new company and reinvest any excess capital. Would assume that’s to aggressively gain market share, rather than any charitable reasons however. |
When you use the word 'profit' in your financial statements, the word has a very precise meaning. I suspect they're playing fast and loose with the word in their email. | |
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| Octopus Energy sent an e-mail - price rises up to 80% announced next week! on 21:46 - Aug 19 with 1589 views | factual_blue |
| Octopus Energy sent an e-mail - price rises up to 80% announced next week! on 20:09 - Aug 19 by SuperKieranMcKenna |
I assume they mean a surplus rather than a loss. You can still make a profit regardless of whether it goes in the bank, or reinvested as capital in the firm.
Edit: can any accountants on here confirm? [Post edited 19 Aug 2022 20:11]
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I don't think the world 'surplus' has any meaning in accountancy. There are three possibilities:
Revenue exceeds costs = profit.
Costs exceed revenue = loss
Revenue = Costs = 'break even'
Revenue and costs both are, where appropriate, adjusted in line with legal requirements and accounting standards. | |
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| Octopus Energy sent an e-mail - price rises up to 80% announced next week! on 22:22 - Aug 19 with 1511 views | wellsy700 |
I recently changed to Octopus energy and they’ve been fantastic so far |  |
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| Octopus Energy sent an e-mail - price rises up to 80% announced next week! on 22:50 - Aug 19 with 1473 views | Nthsuffolkblue |
| Octopus Energy sent an e-mail - price rises up to 80% announced next week! on 22:22 - Aug 19 by wellsy700 |
I recently changed to Octopus energy and they’ve been fantastic so far |
I agree they are very good. However, I was confused about their claim not to have ever made any profit.
I think it appears to be a rather economical interpretation of the term. | |
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| Octopus Energy sent an e-mail - price rises up to 80% announced next week! on 23:15 - Aug 19 with 1423 views | Parky |
| Octopus Energy sent an e-mail - price rises up to 80% announced next week! on 20:09 - Aug 19 by BiGDonnie |
I'm with them and my gas end electric has been £60 this month and last. Not sure how or why but it's down from over £100 each month. |
Not just me then, they charged me £62 last month for Gas and Electric after suggesting we set a direct debit up of £160 a month. Built up a nice amount of ‘credit’. | | | |
| Octopus Energy sent an e-mail - price rises up to 80% announced next week! on 23:16 - Aug 19 with 1424 views | clive_baker |
| Octopus Energy sent an e-mail - price rises up to 80% announced next week! on 21:46 - Aug 19 by factual_blue |
I don't think the world 'surplus' has any meaning in accountancy. There are three possibilities:
Revenue exceeds costs = profit.
Costs exceed revenue = loss
Revenue = Costs = 'break even'
Revenue and costs both are, where appropriate, adjusted in line with legal requirements and accounting standards. |
What you shared earlier in the thread appears to relate to Gross Profit though, ie. revenues less direct costs of facilitating those sales. Most companies will make a positive GP otherwise they really are in a bad shape. I would imagine the statement about never making a profit refers to Net or 'bottom line' profit, which would be more appropriate a measure when talking about profits. |  |
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| Octopus Energy sent an e-mail - price rises up to 80% announced next week! on 23:28 - Aug 19 with 1389 views | Nthsuffolkblue |
| Octopus Energy sent an e-mail - price rises up to 80% announced next week! on 23:16 - Aug 19 by clive_baker |
What you shared earlier in the thread appears to relate to Gross Profit though, ie. revenues less direct costs of facilitating those sales. Most companies will make a positive GP otherwise they really are in a bad shape. I would imagine the statement about never making a profit refers to Net or 'bottom line' profit, which would be more appropriate a measure when talking about profits. |
Does that equate to reinvesting all profits into growing the business? | |
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| Octopus Energy sent an e-mail - price rises up to 80% announced next week! on 23:35 - Aug 19 with 1362 views | clive_baker |
| Octopus Energy sent an e-mail - price rises up to 80% announced next week! on 23:28 - Aug 19 by Nthsuffolkblue |
Does that equate to reinvesting all profits into growing the business? |
Possibly. I've not looked at the financials but it's quite possible that they're profitable at a Gross Profit level but loss making at a Net Profit level, that's entirely common. ie. If their central costs & overheads, marketing spend, salary costs etc etc all add up to more than their gross profit and therefore they're losing money. Perfectly normal for younger companies too, who have to invest in attracting customers and growing the awareness of their brand. Customer acquisition is an expensive thing to do.
If they're profitable at a net profit level or 'bottom line' then I would say the comment they've made about never making a profit would be a curious one. | |
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| Octopus Energy sent an e-mail - price rises up to 80% announced next week! on 00:17 - Aug 20 with 1299 views | King_ding_a_lin_g |
| Octopus Energy sent an e-mail - price rises up to 80% announced next week! on 21:46 - Aug 19 by factual_blue |
I don't think the world 'surplus' has any meaning in accountancy. There are three possibilities:
Revenue exceeds costs = profit.
Costs exceed revenue = loss
Revenue = Costs = 'break even'
Revenue and costs both are, where appropriate, adjusted in line with legal requirements and accounting standards. |
In accountancy, in my experience, terminology such as 'surplus' would usually relate to the excess of income over expenditure for a not for profit entity.
Perhaps by not making a profit, they are referring to not making a taxable profit. Is there a CT charge or a credit in the accounts?
Edit: just looked at the accounts which clearly show operating losses for the years ended 30th April 2020 (£47.9m) and 2021 (£84.7m). Net (bottom line) profit in 20/21 is a result of profits on the disposal of 'Kraken software' to 'Kraken Technologies Ltd'.
As suspected, accounts show a tax credit, not a tax charge. [Post edited 20 Aug 2022 0:38]
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| Octopus Energy sent an e-mail - price rises up to 80% announced next week! on 03:51 - Aug 20 with 1211 views | Ryorry |
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| Octopus Energy sent an e-mail - price rises up to 80% announced next week! on 10:56 - Aug 20 with 956 views | SuperKieranMcKenna |
| Octopus Energy sent an e-mail - price rises up to 80% announced next week! on 18:43 - Aug 19 by factual_blue |
Page four of their last accounts includes the following statement:
'+57% revenue
£1.2bn in FY20 to £1.9bn in FY21, due to growth of households on supply. +67% gross profit: grew by £36.8m from £55m in FY20 to £91m in FY21. This reflects improved operational effectiveness, as well as strategic decision from management to keep prices low and continue to invest in customer growth.'
As the hoary old accountants joke goes
CEO: 'How much profit have we made?'
Accountant: 'How much profit do you want to have made?' [Post edited 19 Aug 2022 18:55]
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So £91m profit if nationalised (assuming the same cost base) would equate to £30 a year per annum per household (for their 3m customers). This is why they are correct in pointing the finger at the E&P firms.
The tweet that Rorry shared is correct and shows how broken our tax regime is. | | | |
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