Britain scores poorly in profitability survey

LONDON - Britain has become one of the least profitable European countries in which to do business, according to a report published by software company Group 1.

On average, UK companies make an annual profit per customer of a little less than £76 ($226), less than businesses in Germany, France, Italy and Spain.

The Group 1 study examined companies across five major sectors (banks, utilities, retailers, general insurers and mobile phone operators). Britain emerged as the least profitable trading environment in three of the five areas.

In the general insurance sector, British companies make just £51.40 a customer each year, compared with £78.60 in Germany and £83.60 in Spain.

British mobile phone companies also have relatively low margins, making just £57.70 per customer each year. French mobile phone companies squeeze more than 40 per cent more from their clients.

UK companies make much smaller profits in the utility sector than their European rivals. Group 1 says British utilities glean an average of £86.50 a year from their clients, while Italian companies generate £137.

In the banking and retail sectors, Britain does not fare as badly. The report identifies Britain as the third most profitable environment for banks, behind Italy and Spain, but ahead of France and Germany. This may be about to change, with the Office of Fair Trading drawing up plans to cap £25-plus bank charges for late payments at just £12.

The report also highlights the growing numbers of British banking customers defecting to other organisations.

Britain also comes third in the retail sector, beating Germany and Spain. Italian retailers make an average of £111.30 a customer - almost 50 per cent more than British retailers.

Group 1 attributes lower returns for British firms on intense competition in all sectors in the UK, helped by the Government's policy of facilitating and maintaining a free-market and deregulated economy.

- INDEPENDENT