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Royal Dutch Shell Plc .com: Green tops DTI scoreboard as Britain’s most efficient retailer

From The Daily Telegraph
By Edmund Conway, Economics Editor (Filed: 03/07/2006)

Less than a month after Sir Philip Green was nominated for his knighthood, he has received, perhaps, a more satisfying accolade. He is – according to the latest research by the Department for Trade and Industry – the country’s most efficient retailer, with his Arcadia Group creating more value per employee than any other company on the high street.

This finding comes as part of the DTI’s annual value-added scoreboard, which shows that British companies have extended their lead over their European counterparts.

The study shows that Taveta Investments, the parent company of Arcadia, which owns Topshop, is the most efficient retailer in the UK, calculated by dividing added value by employee costs and depreciation.

Sir Philip’s group, which paid him a £1.3bn dividend last year, had an efficiency rating of 191.9pc. The retail entrepreneur can afford himself a smile, since Marks & Spencer, the group that defended itself from his takeover approach two years ago, has an efficiency rating of only 147.2pc.

Britain has four companies in the top ten: Vodafone (262.3) and HSBC (215.4) joining Shell (254.8) and BP (225.9). There are four German groups and only two French businesses.

In the supermarket sector, where margins are notoriously thin, Tesco manages a healthy wealth-creating efficiency rating of 149.5pc, while J Sainsbury, which has suffered a number of lean years, has a rating of only 95.4pc.

Mike Tubbs of the DTI said: “If a company stays below 100pc on this rating for long, the wealth they are creating won’t even pay the employees and the depreciation.”

The study calculates the output of a company by taking revenue and subtracting what they pay for goods and services. Unlike profitability, this measure includes what businesses pay their employees.

The DTI figures show that the UK has 197 companies in the Europe’s top 600 and that value-added in the UK has grown by 10pc in the past year, compared with growth of 7pc in Germany and 8pc in France.

“Compared with last year, the UK’s chunk of the pie has got a little bit bigger,” said Mr Tubbs. “It’s partly because the UK has quite a good mix of sectors and partly that the companies are doing better.

“Also, sectors in which the UK is strong – like finance, oil and gas – have had a higher return in recent years.”

As a whole, British companies generated £403bn in 2005 the figures show, although their rate of growth was slower than in 2004.

Other top UK performers included GlaxoSmithKline, which created £11.8bn of wealth with an efficiency rating of 215pc.
 

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