Newcastle United reports profits

The Premier League club announced a £9.05m pre-tax profits in the six months ended 31 January 2005, a strong growth from the £1.95m in the six months ended 31 January 2004. The result was achieved alongside a much smaller rise in turnover up by 3% to reach £49.51m. The board has warned, however, that the first half results contain a full six-months of playing activities while the second half to 31 July 2005 will include two non-playing months. Broadcast revenue was up by 7% to reach £15.1m mainly due to the club’s participation in the UEFA Cup and FA Premier League facility fees. Match-day revenues increased by 5% to £21.2m, but sponsorship revenue fell by 8% to £4.8m and merchandise income by 13% to £4.8m. Both of these items could increase in the year 2005/06 as enhanced contracts with adidas and jersey sponsor Northern Rock start to kick-in. Operating profit pre-player trading, amortization and exceptional costs fell slightly by 3% to £10.73m producing an operating margin of 22%. However, operating profits were up by 160% to £11.07m from £4.25m the year before after taking account of a profit of £8.18m on sales of players compared to a loss of £348,000 in the six months ended 31 January 2004. A further £1.5m of costs relating to the acquisition of the current management team lead by Graham Souness has been capitalised as an intangible asset and will be amortized over the duration of their contracts. The board declared an interim dividend per share of 1.03p with adjusted earnings per share down by 31% from 4.9p to 3.4p. The club has a joint venture with MGM MIRAGE to build a casino above St James’ metro station if and when new gaming legislation is passed and planning permission is granted.