United gives a star performance at half-time

MANCHESTER United thrilled the crowd with pre-tax profits of pounds 7.6m in the six months to 31 January, 65 per cent higher than at the same stage last year, writes Diane Coyle.

The completion of the Stretford End in July contributed by increasing capacity at Old Trafford by a third. The extra seating helped to raise gate receipts 68 per cent to pounds 10.7m in the first half.

The biggest increases in turnover came in non-match activities. The star performer was merchandising, which includes the magazine, videos, wholesaling and souvenir shops. Sales were up 218 per cent at pounds 6.7m. Conference and catering revenues rose 74 per cent to pounds 1.8m.

Television revenue was down 12 per cent at pounds 1.8m, while sponsorship and royalty income grew 8 per cent to pounds 1.9m. A new four-year contract with Sharp is worth more than double the old one.

With three players sold in the first half, United had net transfer income of pounds 775,000. Martin Edwards, chief executive, said there would be purchases in the second half. Last year Touche Ross put the value of the players at pounds 30m, but the club does not include this in its balance sheet.

It appropriated pounds 2m from first- half earnings for its distributable transfer fee reserve, which now stands at pounds 3.25m. Robin Launders, finance director, said: 'This reserve also serves as dividend protection.'

With 19 home matches in the first half and only nine in the second, United receives about two-thirds of full-year income but incurs only half the costs by the interim stage. The shares rose 15p to 675p.

(Photograph omitted)

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