17th January 2017

17th January 2017 – Lights Out – An Economic View





London – 17th January 2017. vysyble today announced the publication of  ‘Lights Out – An Economic View of the UK Energy Market.  This is a 24-page examination of the financial and economic performance of the Big Six companies ie SSE, E.ON, RWe nPower, Centrica, Iberdrola and EDF from 2007/8 onwards with a focus on value creation and the achievement of economic profit.

Central to the analysis is the metric, economic profit – a measure which combines information from the profit and loss account and the balance sheet and therefore considers all the costs of doing business.  It is a metric which has been used by some of the world’s truly great value creators – for example; Coca-Cola under Roberto Goizueta, Gillette under the leadership of Jim Kilts and Lloyds Bank when the great Brian Pitman was at the helm. As a metric, it provides a more robust and demanding indicator of value creation and destruction, particularly when viewed over time.

Roger Bell, author of the report, commented: ‘The Chancellor has put a £100bn price tag on the renewal and replacement of the UK’s current energy infrastructure. Our calculations show that the Big Six energy companies have achieved economic losses of over £129bn since 2007/8. Perhaps the problem is not with the infrastructure but rather with the supply companies which are struggling to create shareholder value. Not one of the Big Six has achieved an economic profit since 2012 and four of the six companies are worth less than they were at the end of 2010. In our experience and taking examples from history, the risk of financial distress is clearly increasing on a daily basis.’

The report provides a detailed economic analysis for the cohort together with an evaluation of current UK energy policy in light of our findings. The report is free to download from the company website www.vysyble.com

vysyble is an insights and business information provider. We help businesses understand the world with trends, data and insights via detailed reports and graphical outputs covering a wide range of industries, sectors and individual corporate entities.