CONSOLIDATED PROFIT AND LOSS ACCOUNT - DOC

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					Date: 1 October 2001

Enquiries:
Peter Kenyon, Chief Executive                   Tel: 020 7929 5599 (on 1.10.01)
David Gill, Managing Director                   Tel: 0161 868 8325 (thereafter)
Manchester United PLC

John Bick, Holborn                              Tel: 020 7929 5599

                              MANCHESTER UNITED PLC
                     Preliminary Results for the year ended 31 July 2001


                                                 2001                          2000
                                              Audited                        Audited
                                                £’000                          £‟000
Turnover                                      129,569                        116,005
Operating profit before amortisation of
players, exceptional costs and joint
venture/associates                             31,680                         30,073
Profit before tax                              21,778                         16,788

Earnings per share                               5.8p                           4.6p
Earnings per share before player trading,
exceptional costs and joint
venture/associates                               8.6p                           8.1p

Final dividend per share                         1.39p                          1.32p

Operating Highlights:
 Record turnover of £129.6 million, an increase of 12% (2000 - £116.0 million)
 Operating profit before player amortisation, exceptional costs and joint venture/associates of
   £31.7 million, up 5% (2000 - £30.1 million)
 Gate receipts higher at £46.2 million (2000 - £36.6 million), due to expanded capacity of 67,700
   (last year 58,000) and one additional home game (27 compared to 26)
 Sponsorship income increased to £22.5 million (2000 - £18.5 million), boosted by the agreement
   with Vodafone and Platinum Sponsors
 Exceptional costs of £2.1 million mainly relating to restructuring of the merchandising operations

Other Highlights:
 £303 million strategic alliance with Nike from 1 August 2002
 £50 million investment (gross before proceeds from disposals) to strengthen the playing squad
   and majority of first team squad secured on new long-term contracts
 Second phase of development of Carrington training complex on target to open in Spring 2002 at
   a cost of £7.5 million
 Agreement reached with Bank of Scotland and Zurich Financial to launch a new range of affinity
   financial services products under the MU Finance brand in conjunction with our current partners,
   MBNA and the Britannia Building Society

Professor Sir Roland Smith, Chairman of Manchester United, said:

“These excellent figures for turnover and profitability differentiate Manchester United from
most other football clubs playing in the United Kingdom and Continental Europe.”




                                                  1
MANCHESTER UNITED PLC


CHAIRMAN’S STATEMENT


Results and Dividend
The Board of Manchester United is pleased to announce another set of excellent results for the year
ended 31 July 2001 in which both turnover and profit before tax are higher than in the previous year.
Twelve months ago I opened my statement to you by congratulating the team on retaining the
Premier League Championship for a sixth time in eight years. I am delighted to report that last season
the team once more retained the title. To win one of the highest honours in domestic football three
years in succession is testimony to the commitment and motivation of the playing and coaching staff
and to everyone associated with the Company.


Turnover reached a record level and amounted to £129.6 million (2000 - £116.0 million).


Operating profit before amortisation of players and exceptional costs was £31.7 million compared to
£30.1 million last year and profit before tax increased by 30 per cent to £21.8 million (2000 - £16.8
million).


Earnings per share were 5.8 pence (2000 - 4.6 pence), an increase of 26 per cent. Adjusted earnings
per share (excluding player amortisation, profit on disposal of players and exceptional costs) were 8.6
pence (2000 - 8.1 pence), an increase of 6 per cent.


The Board is recommending a 5.3 per cent increase in the final dividend to 1.39 pence per share
(2000 - 1.32 pence per share) giving a total dividend for the year of 2.0 pence per share (2000 - 1.9
pence per share).


These excellent figures for turnover and profitability differentiate Manchester United from most other
football clubs playing in the United Kingdom and Continental Europe.


Further details of the financial performance of all our operations are contained in the Financial Review
on pages 5 to 9.


Investment
Following our elimination from the European Champions Cup at the quarter final stage for the second
season in succession, the Board, in consultation with Sir Alex Ferguson and senior members of his
coaching staff, decided that significant investment in the first team squad was required. The
acquisitions of Juan Sebastian Veron, Ruud van Nistelrooy and Roy Carroll for a combined sum of
just over £50 million ensure that the team is able to compete at the very highest level in both
European and English football. Since the year end we have transferred Jaap Stam to Lazio for £15.3
million and acquired the registration of Laurent Blanc from Inter Milan on a free transfer.




                                                    2
In addition, we have renegotiated the playing contracts of several members of the first team squad.
Whilst this will result in a significant increase in wage costs for the current financial year, these
contracts secure many of our top players to Manchester United for the foreseeable future and,
together with our newly acquired players, can be viewed as a significant investment for the future.


In my previous report at the interim stage I referred to the fact that we had received planning
permission for the second phase of work at our Carrington player training complex comprising an
indoor hall with associated facilities and an all weather floodlit pitch, at a total cost of £7.5 million. The
project is progressing on schedule and should be available for use by Spring 2002, providing our
players at all levels with a fully integrated training facility which we believe is amongst the best in
Europe.


People
Following the changes to the executive leadership of the business announced 12 months ago, we
have decided that further strengthening of the executive team is required as we move forward in
developing the business. David Gill has been appointed Group Managing Director and will be
responsible for the day to day operations of the business allowing Peter Kenyon to devote more time
to develop and direct the future strategy of the business. We have commenced the search for a
Group Finance Director.


Whilst the team, Sir Alex Ferguson and his coaching staff receive many plaudits given their
achievements over recent years, the Board would also like to thank our team of people off the pitch
whose efforts contribute greatly towards the smooth running of the Old Trafford stadium and the
general success of the business.


We would also like to thank all our loyal supporters who have ensured every home match was sold
out and gave the team tremendous backing away from home. In addition, we are very appreciative of
all our other customers, key commercial partners, and sponsors who have continued to support the
full range of Manchester United activities throughout the year.


I am delighted that we have reached agreement with Sir Alex Ferguson concerning his continuing role
for the Club following his planned retirement from team management. The Board is considering an
initial list of potential candidates to succeed Sir Alex as Team Manager and it is envisaged that this
critical process will commence in early 2002.


I became Chairman of Manchester United on 24 April 1991 in preparation for the flotation in May that
year. My current service contract expires on 31 March 2002 at which point I shall retire having
presided over 10 years of unprecedented success for Manchester United both on and off the field. For
me it has been an exciting and satisfying experience. The Board is actively considering who will take
over from me at the end of March 2002.




                                                      3
Future Prospects and Strategy
We have entered the new financial year as Premier League Champions once again, seeking to
become the first team to win four English league titles in succession. In addition, I am sure Sir Alex
and his players will be more determined than ever to bring the European Champions Cup back to Old
Trafford in May 2002.


Controlling player costs remains the most important single challenge in our business. Over the last
decade we have been successful in funding increases in player costs by growing our top line
revenues in excess of wage increases and we are determined to maintain that strategy in the medium
term.


We firmly believe that the most effective method of delivering the required top-line growth is through
the formation of innovative and exciting partnerships with global companies which combine the brand
strength of Manchester United and our huge fan-base with their expertise in their specialist product
areas.


The alliances with Nike, due to commence in August 2002, and Vodafone are two examples of such
partnerships.


In my previous report I referred to our intention to extend our range of financial services products
offered to our fan-base. We have reached agreement with Bank of Scotland and Zurich Financial to
market a range of financial services products under the MU Finance brand in conjunction with our
current partners, MBNA and the Britannia Building Society. A new range of affinity lending, insurance
and investment products will be introduced in late 2001 alongside our existing credit card and savings
account products.


We have also taken important steps to enhance the facilities available to our supporters through the
Manchester United website. This has required renegotiation of our original website agreement with
TWI plc. We remain ready to exploit new and existing media rights, on both our website and MUTV,
as they revert back to the Clubs from the Premier League.


Your Board sees many exciting and challenging opportunities for this business in the future which set
us apart from most other football clubs in the United Kingdom and Continental Europe.


So far as the current financial year is concerned, we have completed our stadium funding and the
final major infrastructure project remaining to be completed is the second phase of the Carrington
training complex, but we are carrying the costs of a high quality playing squad that is intended to
succeed in the Premier League and the European Champions Cup. Looking further forward, the value
of other partnerships and opportunities with Nike, financial services and media activities will begin to
come through in the second half of the 2002 calendar year and beyond.

Professor Sir Roland Smith
Chairman
1 October 2001


                                                    4
MANCHESTER UNITED PLC


FINANCIAL REVIEW


ANALYSIS OF RESULTS


The results for the year ended 31 July 2001 are set out in the profit and loss account on page 10 and
an analysis of turnover is shown in note 1. The summarised profit and loss account is shown below:


                                                            2001                     2000
                                                             £m                       £m
        Turnover                                           129.6                    116.0
        Operating profit before amortisation of
        players and exceptional costs                       31.7                      30.1
        Net interest receivable                              0.7                       0.5
        Profit before player trading, exceptional
        costs and joint venture/associates                  32.4                      30.6
        Amortisation of players                            (10.1)                    (13.1)
        Profit on disposal of players                        2.2                       1.6
        Share of results of joint venture and                (0.6)                    (1.0)
        associates
        Exceptional costs                                    (2.1)                    (1.3)
        Profit before tax                                   21.8                      16.8


Turnover
Turnover for the year amounted to £129.6 million, an increase of 12 per cent compared to the 2000
figure of £116.0 million. The increase was mainly derived from increased gate receipts reflecting the
benefit of the extended 67,700 capacity at Old Trafford for the full season (average capacity of 58,000
last year), and increased sponsorship income.


Gate receipts totalled £46.2 million compared to £36.6 million in 2000. The aggregate attendance
from the 27 games played at Old Trafford was 1,811,000 with an average attendance of 67,100 (2000
- 26 games attended by 1,497,000 spectators with an average attendance of 57,600). All home
games at Old Trafford were sold out (the capacity for European Champions League games being
slightly reduced) and our average attendance has been confirmed as the highest in European club
football for the season 2000/01. We are extremely proud of this statistic and are grateful to our loyal
and dedicated supporters who have responded in their usual positive manner to the additional
facilities made available. The year under review also had the benefit of income from the tour to the
Far East in July 2001 (no tour in 2000).


Income from television amounted to £31.2 million compared to £30.5 million in 2000. Although the
team attained the same level of success in 2001 as in 2000 (Premier League Champions and quarter
final stage of the European Champions League), revenue from both competitions rose as a result of
an increase in the value of the television contracts with the broadcasters. However, these increases
                                                     5
were partially offset by the revenue of £2.8 million received in 2000 from our participation in the three
competitions as reigning European Champions (UEFA Super Cup, Inter Continental Cup and the
inaugural FIFA World Club Championship). Total operating profit from the European Champions
League competition was £19.2 million (2000 - £16.9 million), representing 60 per cent (2000 - 56 per
cent) of our total operating profit before player amortisation. Although no fixed player wage costs are
included in this analysis, the figures demonstrate the important nature of this competition in the
context of our overall earnings. We invest in the playing side of our business on the basis that we will
continue to compete at this level for the foreseeable future - the news that UEFA have recognised the
improved performance of English clubs in recent seasons by increasing the number of English
representatives in the Champions League from the season 2002/03 to a maximum of four compared
to three at present clearly enhances the probability that we will continue to derive the financial
benefits which participation provides.


Sponsorship turnover increased significantly by 22 per cent to £22.5 million from £18.5 million. This
increase was due to a combination of additional revenue from our family of Platinum Sponsors and
the benefit of the agreement with Vodafone.


Conference and catering turnover also grew strongly, increasing by 16 per cent to £7.8 million from
£6.7 million last year. The increased revenue resulted from the additional facilities available in the
extended stadium and an increase in the number of match day events at Old Trafford (including non
Manchester United events such as the Rugby Super League Grand Final and FA Cup semi-final) from
28 in 2000 to 31 in 2001.


Merchandising and other turnover was £21.9 million compared to £23.6 million last year, the main
component of the decrease being reduced sales from the domestic wholesale market. The new
Megastore, constructed as part of the stadium expansion project, opened at Old Trafford in August
2000 and, with the first year of the new home kit, has performed well.


Expenses
Cost of sales increased by £2.0 million to £22.1 million mainly as a result of an increase in match day
operating costs (police, security, stewards etc.) arising from the extended stadium capacity and the
one additional home game played in 2001. The overall gross profit margin was unchanged at 83 per
cent.


Administrative expenses (before exceptional costs) increased by £10.0 million in the year to £75.8
million. Staff costs (including player wages) represent the largest component of our administrative
expenses and rose by £5.2 million to £50.0 million, with players accounting for £4.5 million of this
increase. Other operating costs increased by £4.8 million mainly as a result of an increase in
depreciation charges of £1.5 million and marketing expenses of £0.9 million. Marketing expenses
include the cost of programmes and initiatives developed with our sponsors in order to enhance the
value of these relationships.




                                                    6
Performance Measures
Three of the key financial performance measures used by the Group for this business are turnover
mix, the ratio of total staff costs to turnover and the operating profit margin. The mix of turnover is an
important performance measure for this business with a large percentage of the revenue from gate
receipts, television and sponsorship flowing through to operating profit as they have a small level of
associated costs. In the year under review 77 per cent of our revenue was derived from these three
income streams compared to 74 per cent last year as the increases in turnover have been derived
from the high margin gate receipts and sponsorship income streams whilst the percentage of income
from merchandising has decreased. The total staff costs to turnover ratio remained unchanged in
2001 at 39 per cent – a figure which is likely to still represent the best ratio in English Premier League
football. The operating profit margin (before player trading, exceptional costs and joint
venture/associates) decreased slightly in the year to 24.5 per cent compared to 25.9 per cent in 2000.
This reduction in the margin is compensated for by the fact that in absolute terms operating profit
increased by £1.6 million to £31.7 million.


Profit before player trading, exceptional costs and joint venture/associates
Operating profit before player trading, exceptional costs and joint venture/associates amounted to
£31.7 million, an increase of 5% on the £30.1 million achieved in 2000. Net interest income increased
to £0.7 million from £0.5 million - average cash balances held during the year were higher in 2001
mainly as a result of the significantly reduced capital expenditure during the year.


Player Trading - Amortisation less profit on disposals
The player amortisation charge for the year was £10.1 million compared to £13.1 million last year, the
decrease mainly arising as a result of certain players being fully amortised in the 2000 accounts.
Player disposals generated a net profit of £2.2 million compared to £1.6 million last year. The main
components of the profit in 2001 being £1.3 million on the sale of David Healy to Preston and
additional appearance related fees of £0.5m from Blackburn following the sale of John Curtis in 2000.
Total player trading charges (amortisation less profit on disposals) were therefore £7.9 million
compared to £11.5 million last year.


As referred to in the Chairman‟s Statement, significant investment in the playing squad was made just
prior to the balance sheet date. Net transfer expenditure for the year, including the acquisitions of
Ruud van Nistelrooy, Juan Sebastian Veron and Roy Carroll was £46.8 million compared to £13.6
million last year. These acquisitions have not impacted on the amortisation charge for 2001 but will
clearly have an effect in the current and subsequent financial years.


Exceptional costs
Exceptional costs of £2.1 million have been incurred in the year comprising £1.8 million relating to the
restructuring of our Merchandising operation and £0.3 million relating to our share of the additional
deficit on the Football League Limited Pension and Life Assurance Scheme.




                                                     7
The restructuring costs for our Merchandising operation comprise redundancy costs of £0.8 million
and non-cash items of £1.0 million relating to impairment and accelerated depreciation on fixed
assets. It is currently estimated that further accelerated depreciation charges relating to fixed assets
of approximately £0.7 million will be accounted for in the current financial year.


We received confirmation during the year from the Trustees of the Football League Limited Pension
and Life Assurance Scheme ('the Scheme') that our final share of the deficit on the defined benefit
element of the scheme, which was suspended on 31 August 1999, was £1.6 million. As £1.3 million
had already been accounted for in the 2000 financial statements (being the latest estimate of our
share of the deficit when those accounts were approved) a further £0.3 million has been accounted
for in the 2001 accounts. As permitted by the Pensions Act 1995, payments to make good the deficit
will be made over a period of 6 years and commenced in July 2001.


Joint Venture / Associates
Our one third share of the accounting losses from our joint venture television channel, MUTV,
amounted to £0.7 million compared to £1.0 million last year. The availability of first team Premier
League action around 48 hours after the matches have been played is resulting in increased
subscriber numbers in the current season and this should ensure a further improvement in the
financial results this year. Our share of the net liabilities of the venture in the consolidated balance
sheet is £2.9 million.


The share of results from our investments in The Golden Tulip Inn and The Tulip Inn hotels was £0.1
million. The Golden Tulip Inn (25 per cent holding) has continued to trade profitably with good
occupancy rates. Our most recent investment, The Tulip Inn (31.4 per cent holding), a 120 bedroom
hotel adjacent to the Trafford Centre shopping complex and just a few miles from Old Trafford, was
completed on schedule and opened in September 2001.


Profit after tax
Profit after tax was £14.9 million, an increase of 24 per cent compared to the £12.0 million achieved in
2000. The Group tax charge was £6.8 million, giving an effective rate of 31.4 per cent (2000 – 28.8
per cent). Disregarding the exceptional accelerated depreciation and impairment charges of £1.0
million, for which no tax relief is available, the effective rate was in line with the statutory rate of 30.0
per cent.


Earnings per share
As in previous years, an adjusted earnings per share figure of 8.6p (2000 - 8.1p) has been calculated
in order to give a clearer understanding of the financial performance of the Group. The adjusted figure
excludes the effect of player amortisation, profit on disposal of players and exceptional costs - details
of the calculation are given in note 5.


Dividends
The Directors are recommending a final dividend for the year of 1.39 pence per share which
represents an increase of 5.3 per cent on the 1.32 pence paid last year. If approved, the total dividend
for the year would be 2.0 pence per share compared to 1.9 pence per share in 2000, an increase of
                                                       8
5.3 per cent. The Company has increased its dividend every year since flotation and the dividend is
covered 2.9 times (2000 – 2.4 times).


The shares are expected to be marked ex-dividend on 10 October 2001 and, subject to shareholder
approval at the Annual General Meeting, the dividend will be paid on 22 November 2001 to
shareholders on the register at 12 October 2001. The Company is continuing to offer shareholders a
dividend reinvestment plan.


BALANCE SHEET
Following the significant investment in the playing squad referred to earlier, the net book value of
intangible assets on the consolidated balance sheet, representing the unamortised value of acquired
players, has also risen significantly to £71.1 million from £32.3 million last year. This high level of
expenditure on the playing squad has reduced the level of our net funds. At the balance sheet date
we had net debt of £1.2 million compared to net cash last year of £10.6 million.


Total net assets increased by £9.7 million in the year to £124.7 million at 31 July 2001 reflecting the
retained profit for the year.


CASHFLOW
Cash generation across the Group remained strong with over £50 million being generated from
operating activities which facilitates the investment in players and tangible fixed assets. Investment in
tangible fixed assets is expected to increase in the new financial year as we complete the second
phase of the development of our Carrington training complex by Spring 2002 but cashflow will be
boosted by the net proceeds of £15.3 million from the sale of Jaap Stam to Lazio, payable in
installments by 31 July 2002.


TREASURY
The Group adopts a conservative approach to the investment of any surplus funds, which are
invested in both certificates of deposit and the money market with highly rated institutions. Forward
foreign currency contracts are entered into where deemed appropriate and principally to protect
against any exposure on income receivable relating to the European Champions League.


The Group will be in a position to fund its ongoing requirements from its internal resources. A revised
borrowing facility of £29.5 million has recently been agreed with our principal bankers and is due for
renewal in November 2002.


ACCOUNTING POLICIES
There have been no changes to the main accounting policies adopted during the year.


David Gill
Group Managing Director
1 October 2001




                                                     9
MANCHESTER UNITED PLC
CONSOLIDATED PROFIT AND LOSS ACCOUNT for the year ended 31 July 2001
                                                                        2001                        2000
                                                    Operations
                                                     excluding
                                       Notes           player          Player
                                                   amortisation     amortisation
                                                    and trading      and trading        Total       Total
                                                       £’000           £’000            £’000       £‟000
Turnover: Group and share of joint
venture                                               130,637                  -       130,637     117,039
Less: share of joint venture                           (1,068)                 -        (1,068)     (1,034)
Group turnover                         1              129,569                  -       129,569     116,005

Cost of sales                                         (22,120)                 -       (22,120)    (20,134)

Gross profit                                          107,449                  -       107,449      95,871

Administrative expenses before
exceptional costs                      2              (75,769)         (10,173)        (85,942)    (78,890)
Administrative expenses
 – exceptional costs                   3               (2,073)               -          (2,073)     (1,300)
Total administrative expenses                         (77,842)         (10,173)        (88,015)    (80,190)

Group operating profit/(loss)                            29,607        (10,173)         19,434      15,681

Share of operating profit/(loss) in:
- Joint venture                                            (677)               -          (677)     (1,022)
- Associate                                                  75                -            75          40

Total operating profit: Group and
share of joint venture and
associates                                               29,005        (10,173)         18,832      14,699

Profit on disposal of players                                 -          2,219           2,219       1,633

Profit/(loss) before interest and
taxation                                                 29,005         (7,954)         21,051      16,332

Net interest receivable                                                                   727         456

Profit on ordinary activities before
taxation                                                                                21,778      16,788

Taxation                                                                                (6,841)     (4,838)

Profit for the year                                                                     14,937      11,950

Dividends                              4                                                (5,195)     (4,936)

Retained profit for the year                                                             9,742       7,014

Basic and Diluted earnings per
share                                  5                                                    5.8p        4.6p
Basic and Diluted adjusted earnings
per share                              5                                                    8.6p        8.1p




The results for both the current and prior period derive from continuing activities.

There were no recognised gains and losses other than as stated above and therefore a statement of
recognised gains and losses has not been presented.




                                                    10
MANCHESTER UNITED PLC

CONSOLIDATED BALANCE SHEET at 31 July 2001

                                                            2001       2000

                                                  Notes    £’000      £‟000

Fixed assets
Intangible assets                                 6        71,117     32,315
Tangible assets                                           122,710    124,509
Loan to joint venture                                       1,000      1,000
Investment in associates                                      792        591
                                                          195,619    158,415

Current assets
Stocks                                                      2,209      4,007
Debtors                                           7        20,581     17,699
Cash at bank and in hand                                        -     12,419
                                                           22,790     34,125

Creditors – amounts falling due within one year   8        44,935     39,711

Net current liabilities                                   (22,145)    (5,586)

Total assets less current liabilities                     173,474    152,829

Creditors – amounts falling due after one year    9         1,050          -

Provisions for liabilities and charges
Deferred taxation                                           2,154      3,838
Investment in joint venture:
- Share of gross assets                                      (731)      (777)
- Share of gross liabilities                                3,651      3,020

Accruals and deferred income
Deferred grant income                                       1,410      1,195
Other deferred income                                      41,248     30,603

Net assets                                                124,692    114,950

Capital and reserves
Share capital                                              25,977     25,977
Other reserve                                                 500        500
Profit and loss account                                    98,215     88,473
Shareholders’ funds                               10      124,692    114,950




                                                  11
MANCHESTER UNITED PLC

CONSOLIDATED CASH FLOW STATEMENT for the year ended 31 July 2001

                                                                         2001                  2000

                                                      Notes     £’000       £’000      £‟000       £‟000

Net cash inflow from operating activities                                 50,882                35,761

Returns on investments and servicing of finance
Interest received                                                692                   828
Interest paid                                                   (146)                 (327)
Net cash inflow from returns on investments and
servicing of finance                                                        546                       501

Taxation paid                                                             (7,377)                (7,328)

Capital expenditure and financial investment
Proceeds from sale of players‟ registrations                    4,194                 2,698
Purchase of players‟ registrations                            (47,504)              (20,547)
Sale of tangible fixed assets                                   1,430                   761
Purchase of tangible fixed assets                              (9,232)              (33,685)
Net cash outflow from capital expenditure and                            (51,112)               (50,773)
financial investment

Acquisitions and disposals
Investment in associated company                                (126)                 (126)
Investment in joint venture                                        -                  (275)
Net cash outflow from acquisitions and disposals                            (126)                 (401)

Equity dividends paid                                                     (5,013)                (4,754)

Cash outflow before management of liquid                                 (12,200)               (26,994)
resources and financing

Management of liquid resources
Sale of marketable securities                                   5,006                52,686
Purchase of marketable securities                              (5,006)              (17,071)
Net cash inflow/(outflow) from management of                                    -               35,615
liquid resources

Financing
Repayment of borrowings                                        (1,856)               (1,722)
Grants received                                                   400                     -
Net cash outflow from financing                                           (1,456)                (1,722)

(Decrease)/Increase in cash in the year               11                 (13,656)                6,899

Net cash generated from operating activities
Operating profit                                                          19,434                15,681
Depreciation charges                                                       7,539                 5,052
Amortisation of cost of players‟ registrations                            10,173                13,092
(Profit)/loss on disposal of tangible fixed assets                           (51)                  392
Grants released                                                             (185)                 (219)
Decrease/(Increase) in stocks                                              1,798                  (702)
Increase in debtors                                                       (3,162)               (2,443)
Increase in creditors                                                     15,336                 4,908

Net cash inflow from operating activities                                 50,882                35,761




                                                     12
MANCHESTER UNITED PLC
NOTES

1. Turnover                                                                              2001             2000
                                                                                        £’000            £‟000
Gate receipts and programme sales                                                     46,202            36,626
Television                                                                            31,237            30,546
Sponsorship                                                                           22,451            18,513
Conference and catering                                                                7,754             6,698
Merchandising and other                                                               21,925            23,622
                                                                                     129,569           116,005

2. Administrative expenses before exceptional costs                                      2001             2000
                                                                                        £’000             £‟000
Operations excluding player amortisation and trading:
Auditors' remuneration: audit services                                                    35                46
Auditors' remuneration: non-audit services                                               255               131
Staff costs                                                                           50,002            44,791
Depreciation                                                                           6,514             5,052
Other operating charges                                                               19,199            15,605
Grants released                                                                         (185)             (219)
(Profit)/Loss on disposal of tangible fixed assets                                       (51)              392
                                                                                      75,769            65,798
Player trading and amortisation:
Amortisation of cost of players‟ registrations                                        10,173            13,092
                                                                                      85,942            78,890

The costs of £1,821,000 relating to the restructuring of the merchandising operations comprise redundancy costs
of £796,000 and accelerated depreciation and impairment charges on fixed assets of £1,025,000. It is currently
estimated that further accelerated depreciation charges on fixed assets of £700,000 will be incurred in connection
with the restructuring up to 31 July 2002.

3. Administrative expenses – exceptional costs                                           2001             2000
                                                                                        £’000             £‟000

Restructuring of merchandising operations                                              1,821                 -
Share of deficit on Football League Pension Scheme                                       252             1,300
                                                                                       2,073             1,300

4. Dividends                                                                             2001             2000
                                                                                        £’000             £‟000

Interim paid of 0.61 pence per share (2000 – 0.58 pence per share)                      1,585            1,507
Proposed final of 1.39 pence per share (2000 – 1.32 pence per share)                    3,610            3,429
                                                                                        5,195            4,936

Shareholders are advised that the shares are expected to be marked ex-dividend on 10 October 2001 and the
dividend will be paid on 22 November 2001 to those registered on 12 October 2001.

5. Earnings per ordinary share

The calculation of earnings per share is based on earnings of £14,937,000 (2000 - £11,950,000) being the profit
for the year after taxation and the weighted average number of ordinary shares in issue for the year of
259,768,040 (2000 – 259,768,040). The weighted average number of ordinary shares used in the calculation of
diluted earnings per share is 260,467,445 (2000 – 260,790,097). This has been adjusted for the effect of
potentially dilutive share options issued under the Group‟s Share Option Schemes.




                                                        13
An adjusted earnings per share figure has been calculated in addition to the earnings per share required by FRS
14, „Earnings per Share‟, and is based on earnings excluding the effect of exceptional charges and player
trading. It has been calculated to allow the shareholders to gain a clearer understanding of the trading
performance of the Group. Details of the adjusted earnings per share are set out below:

                                                                          2001                          2000
                                                             Earnings        Earnings      Earnings        Earnings
                                                              after tax      per share      after tax      per share
                                                                 £’000               p         £‟000               p

Basic and diluted earnings per share                           14,937              5.8      11,950              4.6
Exceptional costs                                                1,759             0.7          925             0.4
Amortisation of players                                          7,121             2.7        9,319             3.6
Profit on disposal of players                                  (1,553)           (0.6)      (1,162)           (0.5)
Adjusted earnings per share                                    22,264              8.6      21,032              8.1

6. Intangible fixed assets
                                                                                                   £’000
Cost of players’ registrations
At 1 August 2000                                                                                  68,292
Additions                                                                                         50,625
Disposals                                                                                        (14,846)
At 31 July 2001                                                                                  104,071

Amortisation of players’ registrations
At 1 August 2000                                                                                  35,977
Charge for the year                                                                               10,173
Disposals                                                                                        (13,196)
At 31 July 2001                                                                                   32,954

Net book value of players’ registrations
At 31 July 2001                                                                                   71,117

At 31 July 2000                                                                                   32,315

Following agreement reached in March 2001 between FIFA and the European Commission, FIFA has issued
amended regulations concerning the status and international transfer of players. The new regulations came into
effect on 1 September 2001. Amongst other things, the new regulations create a detailed system for the
payment of training compensation for young players together with a regulatory system for the maintenance of
contractual stability.

Mutually agreed transfers remain unchanged under the new regulations.

In the light of the changes to the transfer system as a result of the new regulations, the Directors have reviewed
the carrying value of players‟ registrations in the consolidated balance sheet at 31 July 2001 and do not consider
that any reduction in the value is necessary.

7. Debtors                                                                    2001                2000
                                                                             £’000                £‟000

Trade debtors                                                                9,709               8,471
Other debtors                                                                  408                 491
Prepayments and accrued income                                              10,464               8,737
                                                                            20,581              17,699

8. Creditors – amounts falling due within one year                            2001                2000
                                                                             £’000                £‟000

Bank overdraft and loan                                                      1,237               1,856
Trade creditors                                                             10,669              11,431
Social security and other taxes                                              9,265               5,528
Corporation tax                                                             10,796               9,648
Accruals                                                                     9,357               7,819
Dividends proposed                                                           3,611               3,429
                                                                            44,935              39,711




                                                        14
9. Creditors – amounts falling due after one year                          2001              2000
                                                                          £’000              £‟000

Other creditors                                                           1,050                   -

10. Reconciliation of movements in equity shareholders’                    2001               2000
   funds                                                                  £’000               £‟000

Profit for the period                                                    14,937              11,950
Dividends                                                                (5,195)             (4,936)
                                                                           9,742               7,014
Opening equity shareholders‟ funds                                      114,950             107,936
Closing equity shareholders‟ funds                                      124,692             114,950

11. Reconciliation of net cash flow to movement in net funds
                                                                           2001               2000
                                                                          £’000               £‟000

(Decrease)/increase in cash in the period                               (13,656)            6,899
Cash outflow from decrease in debt                                        1,856             1,722
Cash inflow from management of liquid resources                               -           (35,615)
Movement in net funds                                                   (11,800)          (26,994)
Opening net funds                                                        10,563            37,557
Closing net funds                                                        (1,237)           10,563

12. Analysis of changes in net funds                     At 1 August       Cash flows     At 31 July
                                                                 2000                           2001
                                                                £’000            £‟000         £’000
Cash at bank and in hand                                      12,419           (13,656)        (1,237)
Debt due within one year                                      (1,856)            1,856              -
Total                                                         10,563           (11,800)        (1,237)


13. Additional information

a. The financial information given does not constitute statutory accounts within the meaning of
   Section 240(5) of the Companies Act 1985. The figures for the year ended 31 July 2000 are
   extracted from the statutory accounts filed with the Registrar of Companies and which contained
   an unqualified audit report.

     The balance sheet at 31 July 2001 and the profit and loss account, cashflow statement and
     associated notes for the year then ended have been extracted from the Group‟s 2001 statutory
     financial statements upon which the auditors opinion is unqualified and does not include any
     statement under Section 237 of the Companies Act 1985.

b. The Annual General Meeting is to be held in the Manchester Suite, North Stand, Old Trafford,
   Manchester, M16 0RA at 11 am on 15 November 2001. The full Report and Accounts will be
   posted to shareholders on 16 October 2001.

c.   The principal accounting policies of the Group have remained unchanged from those set out in
     the 2000 Report and Accounts.




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