Annual Report 2003
Manchester United is one of the leading clubs in world football, with a global brand and following that embodies the passion and excitement of the world’s most popular sport. Our goal is, through innovation, commitment and evolution, to protect and develop the brand by sustaining the playing success on the field and growing the business to enhance the financial strength of the Group.
Contents 1 Highlights 2 Chairman’s statement 6 Operational review 32 Financial review 38 Corporate social responsibility 44 Board of directors 46 Directors’ report Corporate governance 51 Remuneration report 57 Financial statements 79 Statement of directors’ responsibilities 80 Auditors’ report 81 Five year summary 82 Shareholder information 85 Advisers and internal contacts
> Turnover up 18 per cent as a result of strong cup runs, increased media revenues and the start of the new Nike partnership. > Staff costs represent 46 per cent of turnover (2002 48 per cent). > Net player trading profits of £12.9 million (2002 £17.4 million). > Tax rate 24.3 per cent (2002 22.6 per cent) due to a provision release following agreement of prior year tax computations. > Special dividend of 1.50 pence (2002 1.00 pence) in addition to total normal dividend of 2.50 pence per share (2002 2.10 pence).
1999 2000 2001 2002 2003 110.7 116.0 129.6
1 Matchday 2 Media 3 Commercial
41% 32% 27%
Group operating profits* £m
1999 2000 2001 2002 2003 32.3 30.1 31.7 34.5# 50.0
Earnings per share (pence)
1999 2000 2001 2002 2003 4.6 5.5 9.6 11.5 5.9
Turnover (£m) Group operating profit* # (£m) Profit before taxation (£m) Earnings per share (pence) Dividend per share (pence) * Before amortisation of players and exceptional costs # 2002 restated
173.0 50.0 39.3 11.5 4.00
146.1 34.5 32.3 9.6 3.10
Dividends per share (pence)
1999 2000 2001 2002 2003 1.80 1.90 2.00 3.10 4.00
Strong performance Over the past 12 months Manchester United has continued to deliver a strong performance both as a team and as a business. The successes have been achieved against a background of weak macro economic conditions and uncertain financial markets which have been amplified in the football industry as a whole by its high levels of debt and over-dependence on media revenues. Manchester United has differentiated itself through its results both on and off the pitch. Team success The team emphatically answered its critics by remaining unbeaten in the Premiership from the start of 2003 to win the Club’s eighth Premiership title in 11 years. The team reached the UEFA Champions League quarter finals for the seventh successive season – the best record of any team in Europe – before losing to Real Madrid in arguably the best tie in the competition. We also reached our first Worthington Cup final in nine years. Our loyal fans have once again showed tremendous support for the team with sell out crowds at virtually every one of our 33 first team matches at Old Trafford. We appreciate the contribution that this support makes to our team’s and business success. Strengthening the squad During the off-season we have been exceptionally active in making progress on one of our core strategic goals, to maintain the playing success of the team. The sales of David Beckham and Juan Sebastian Veron, the release of David May and Laurent Blanc at the end of their contracts and the acquisitions of Tim Howard, Eric Djemba Djemba, David Bellion, Kleberson and Cristiano Ronaldo, were all important steps. They have strengthened the playing squad and equipped the manager, Sir Alex Ferguson, with the players he needs to keep the club challenging for major trophies. These transfers have decreased the average age of the squad to 25 and have also...