Beckham sale and Nike deal boost Man U profits

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The Independent Online

Manchester United announced a 22 per cent jump in profits as match results, the sale of David Beckham and a new merchandising deal with Nike all paid off.

The company behind the Premiership football club said its performance "both on and off the pitch" was so good that it would be paying a special dividend of 1.5p a share. That comes on top of the 2.5p-a-share basic dividend for the year ended 31 July. Pre-tax profits rose to £39.4m.

Sir Roy Gardner, chairman of Manchester United, played down rumours of takeover surrounding the group that arelinked with existing investors and outsiders. "We talk to all major shareholders continuously. We have no reason to believe they are anything other than value investors. There have been no approaches from any other party. We consider this [talk] to be pure speculation," Sir Roy said.

Wage costs were up once more but analysts said it would be the last financial year for some time to see this expense rise. The wage bill, driven by the earnings of the club's top players, rose to £79.5m for the period, or 46 per cent of group turnover, up from £70.8m.

Andrew Lee, an analyst at Dresdner Kleinwort Wasserstein, said: "The wages rise was an overhang from Beckham and [Juan Sebastian] Veron, who have both gone. This year, for the first time, wages will be flat." Profits from trading players were £12.9m, driven by a £15.9m profit on Beckham's transfer to Real Madrid over the summer. Analysts said that, given the £28.9m net cash on the balance sheet and a similar sum due to flow into the club's coffers from existing deals, Manchester United had plenty of money to buy players in the winter transfer window.

Vinay Bedi, an analyst at Wise Speke, said: "Nobody else in the League has that kind of money, except Chelsea. If Alex Ferguson [the club manager] wants to buy players in the transfer market in January, there's no excuse for him not being given the money."

David Gill, appointed chief executive to replace Peter Kenyon last month, said the company's new contract with Nike to produce its club shirts led to a £5m revenue gain to £24.2m, compared with the old merchandising deal with Umbro. The extra revenue all dropped to the bottom line. A record 2.6 million shirts were sold in the period.

Mr Gill said the loss of Beckham had not affected the overseas popularity of the club. He said foreign shirt sales, hits on international club websites and the reaction of promoters to Manchester United's 2005 Asia tour, all demonstrated its enduring international appeal. He said the pollster Mori had been commissioned to assess the club's international support.