Manchester united plc results for year to 31 july 2002 30 september 2002 not just a football club
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Manchester United PLC Results for Year to 31 July 2002 30 September 2002 Not Just a Football Club……. Not Just a Football Club……. Agenda Introduction Peter Kenyon Group results for the year Nick Humby From fans to customers David Gill Strategies to build on Peter Kenyon

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Manchester united plc results for year to 31 july 2002 30 september 2002 not just a football club

Manchester United PLCResults for Year to 31 July 200230 September 2002Not Just a Football Club……


Not just a football club

Not Just a Football Club…….

Agenda

  • IntroductionPeter Kenyon

  • Group results for the yearNick Humby

  • From fans to customersDavid Gill

  • Strategies to build onPeter Kenyon

    on the global brand


Not just winning creating value

Not Just Winning…….Creating Value

  • Turnover up 13% to £146.1m (2001 £129.6m)

  • Profit before tax up 48% to £32.3m (2001 £21.8m)

  • Dividend increased by 55% to 3.1p (2.0p) with a final normal dividend of 1.46p per share and a special dividend of 1.00p per share.


Not just winning strong revenue growth

Not Just Winning…..Strong Revenue Growth

31/7/02%31/7/01

£000 change £000

Match day 56,253 9%51,763

Media 51,948 66%31,237

Commercial 26,493-3%27,411

Merchandising 11,368 -41%19,158

Total turnover£146,062 £129,569

Growth over last year 13%


Not just winning increasing dividends

Not Just Winning……Increasing Dividends

20022001 (restated)

£000£000

Turnover146,062129,569

Profit before tax 32,347 21,778

Tax (7,308) (7,399)

Profit after tax 25,039 14,379

Effective tax rate 22.6% 34.0%

Earnings per share 9.6 5.5

Dividend per share 3.1 2.0

Dividend cover 3.1 2.8


Not just winning increasing profits

Not Just Winning…..Increasing Profits

2002 2001

£000£000 £000£000

Operating profit 33,929 31,680

Player amortisation(17,647) (10,173)

Profits on player disposals17,406 ( 241) 2,219 (7,954)

33,68823,726

Exceptional costs (864)(2,073)

32,82421,653

Associates/JV’s (504) (602)

Interest 27 727

Profit before tax 32,34721,778


Not just winning managing costs

Not Just Winning…….Managing Costs

2002 %2001

£000 increase£000

Turnover146,062 13%129,569

Gross profit130,377 21%107,449

Wages & salaries (69,999) 40%(50,002)

Other operating expenses (26,449) 2%(25,767)

Operating profits 33,929 31,680

Gross margin89%83%

Wages a % of turnover48%39%

Operating margin23%24%


Not just winning good contribution from each stage of ecl

Not Just Winning….. GoodContribution from Each Stage of ECL

Profits increase by 34% over last year


Not just winning managing the cash

Not Just Winning……Managing the Cash

2002 2001

£000 £000

Cash from operations 42,806 50,882

Net transfer fee (12,083)(43,310)

Fixed asset investment(13,923) (7,802)

16,800 (230)

Dividend & interest (5,197) (4,467)

Tax (9,433) (7,377)

Other - 274

Net cash flow 2,170 (11,800)

Net cash/debt on 31 July 933 (1,237)


Not just our fans our customers

Not Just Our Fans…...Our Customers

Executive Box Seats

Increasing

Value

as

Customers

Increasing

Number

of

Fans

Season Tickets

MU Finance Customers

MU TV Subscribers

Members

Museum/Tour Visitors

ManUtd.com Unique Users

Purchase of Replica Shirts

UK Fans

Overseas fans

Match day

Commercial

Media


Not just our fans valued customers of our partners

Not Just Our Fans……Valued Customers of Our Partners

PRINCIPAL SPONSOR OF

MANCHESTER UNITED

THE OFFICIAL BEER OF

MANCHESTER UNITED

OFFICIAL BETTING PARTNER OF

MANCHESTER UNITED

OFFICIAL INTERNET PARTNER OF

MANCHESTER UNITED

OFFICIAL IMAGING PARTNER OF

MANCHESTER UNITED

OFFICIAL SOFT DRINK SUPPLIER TO

MANCHESTER UNITED

THE OFICIAL RADIO STATION OF

MANCHESTER UNITED

OFFICIAL GROOMING PARTNER OF

MANCHESTER UNITED

OFFICIAL BUSINESS SOLUTIONS PARTNER TO

MANCHESTER UNITED


Not just fans mu finance customers

Not Just Fans……MU Finance Customers


Not just uk fans developing new international products

Not Just UK Fans……Developing New International Products

Nike

  • Merchandising business transferred to Nike on 1st August 2002

  • Minimum guarantee for each of the 1st 4 periods to 31 May of £20.7m

  • First 12 months to 31July 2003 worth £24.2m and year to July 2004 £20.7m

  • Failure to qualify for Europe would reduce guarantee by £2m p.a.

  • Break point for Nike after 6 years

  • Confident start with launch of new home shirt

  • New deals - JSV, Central Trading and Sport Etail assigned to Nike


Not just uk fans developing new international activity

Not Just UK Fans……Developing New International Activity

Reds Café

  • Licence trademarks for launch of chain of family restaurants in Asia

    • First 3 sites identified

      US Tour

  • Promote Manchester United in US ahead of next season

    • Four games (Seattle, Los Angeles, Boston and New York)


Not just football tactics football strategy

Not Just Football Tactics……Football Strategy

  • Contracted Beckham, Keane, Stewart, O’Shea in addition to 8 last year

  • 19 players under contract for 3 seasons or more, average age 26

  • Secured renewal of Manager for 3 years

  • Acquired Rio Ferdinand for £29.3m

  • Developing Academy to produce new 1st team stars

  • International alliances to identify and develop new young players


Not just football tactics media strategy

Not Just Football Tactics……Media Strategy

  • Manchester United live games averaged 3 million UK viewers

  • Manchester United PPV games attract 68% more than FAPL average buys

  • Media rights acquired for Club use

    • Delayed FAPL rights

    • ECL archive & web rights (03/04)

  • Overseas rights sold in 161 territories last year

  • Key media contract renewals ahead


Not just football tactics business strategy

Not Just Football Tactics…….Business Strategy

In summary:-

  • Achieving good results

  • Maintain strong operating cash flows

  • Secure a stable and successful playing set up

  • Invest in academy to bring on next generation

  • Managing player costs around 50% of turnover level

  • Develop quality partnerships to drive new revenue streams

  • Deliver ambitious CRM targets

  • Exploit appealing media product

  • Dividend policy focused on rewarding shareholders when the company is successful

  • Not just a football club …… a global brand


Appendices

Appendices


Match day turnover up 9

Match Day Turnover up 9 %


Media turnover up 66

Media Turnover up 66%


Commercial turnover down 3

Commercial Turnover Down 3%


Average revenue per match

Average Revenue Per Match


Capital expenditure since flotation

Capital Expenditure Since Flotation

£,000

Rebuilding of west stand 10,300

Refurbishment of south and east stands 5,790

Acquisition of United trading estate 9,125

Rebuilding of north stand 18,650

North stand fit-out (including museum) 17,106

Land/property/car parks 10,381

Carrington training ground (phase I & II) 20,942

South stand executive suites 5,304

Stadium expansion - east & west stands (incl. Megastore) 33,279

Ticketing/membership building 1,992

Other (mainly plant, machinery, fixtures & fittings) 33,320

Total to 31 July 2002166,189

Expenditure on future major projects (estimate) 3,000

169,189

Net cash received from shareholders (flotation/placing) 23,425

Funded via cash generated145,764

169,189


Profit on disposal of players

Profit on Disposal of Players

Gross transfer fee receivable £m£m

Stam16.0

Cole 6.3

Yorke 1.8

Greening 2.0

Wilson 1.5

Macken 1.0

Other 0.6 29.2

Less associated costs of disposals (2.9)

Net proceeds of disposals 26.3

Less amortised player registration costs

Stam 6.2

Cole 2.6

Other 0.1 (8.9)

Profit on disposal of players £17.4


New dividend policy

New Dividend Policy

Per shareTotal Dividend £mcover

Normal dividend2.10p£5.4554.60

Special dividend1.00p£2.598m

Total dividend3.10p£8.0533.10

Less interim dividend0.64

Dividends payable on

22 November 20022.46


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