United keeps players off balance sheet

MANCHESTER UNITED is continuing to distance itself from the accounting lobby that is pushing for football clubs to include the valuation of players on the balance sheet.

'We'll keep the accounting policy the same,' Robin Launders, the finance director, said yesterday. That stance contrasts with that of Tottenham Hotspur, one of the two other quoted football clubs.

Despite United's policy, it has commissioned a valuation of its players from Touche Ross, the chartered accountants. Ironically, Touche argues that players should be on balance sheets to enable clubs to project a more commercially realistic value of assets.

The contentious issue is one of the reasons why football clubs have failed to win investment support in the City. Movements in players' valuations are often erratic, swayed either way by variables such as injuries or a team's success in competitions.

'The volatility of player transfers has made it difficult for analysts to get a grip on us,' Mr Launders said.

Touche has valued United's squad at pounds 24m. Excluding players, United's stock market worth is pounds 35m on yesterday's closing price of 289p, up 7p on slightly better than expected full-year results.

Profits before transfer fees for the year to 31 July moved ahead from pounds 6.2m to pounds 7.7m, against the pounds 7.5m consensus forecast among analysts. Turnover rose from pounds 17.8m to pounds 20.1m, largely reflecting increases in admission prices and a rise in sponsorship and royalty payments.

The result before tax, however, fell from pounds 5.4m to pounds 5.1m, with United incurring a net outflow of pounds 2.6m on transfer fees, against pounds 801,000 last time.

Players bought included three internationals. Peter Schmeichel, the Danish goalkeeper, for pounds 500,000, Paul Parker, the England defender, for pounds 1.75m and Andrei Kanchelskis, the CIS winger, for pounds 150,000.

Retained profits were reduced further by a pounds 250,000 top-up for United's transfer fee reserve, which now stands at pounds 2.25m net or pounds 3m including tax breaks.

The final dividend is 12p, making a total of 18p.

United is confident about prospects this year, despite an early exit from the UEFA cup. 'We are already well on the way to covering costs,' Mr Launders said.

(Photograph omitted)