Jim Duggan's TOTTENHAM HOTSPUR site

TOTTENHAM HOTSPUR PLC - PRELIMINARY RESULTS FOR THE YEAR - ENDED 31st JULY 2000

My comments
"Intangible assets have increased by £8.9m as a result of player trading." - does anyone have any further details on what this relates to as its massive increase in terms of turnover. Surely the sale of Ginola and acquisition of Fatcha has n't improved the Tottenham brand that much!  

"Your Board continues to hold the view that any surplus funds are better used by further re-investment in the Club and therefore there will be no dividend in respect of this financial year" Does re-investment in the club equate to player purchases? or better sarnies or whatever they have in the exec boxes  

"We are currently seeking planning permission to increase the stadium capacity to 44,000 by rebuilding the East Stand. We will not commit to pursuing this strategy until we feel sure that the additional capacity will be adequately utilised and we will closely study the effects of more live televised football from next season." Very sensible policy to wait - fingers crossed the scum come cropper with their £100m monstrosity on the rubbish tip at Ashburton Grove, but is 44,000 the height of our ambitions! Building a new stand to put in another row of executive boxes while we become again become Park Lane refugees with no guarantee of getting our good seats back will not go down well with me  

"I would like to thank our loyal fans for their invaluable support. We are all working towards the same goals - success and long term prosperity for Tottenham Hotspur. With patience on all sides I am confident that we will get there."   lets hope so
Sir Alan Sugar

Executive Summary

- Turnover increased to £48.0m (1999 - £42.6m)

- Operating profit before player trading £7.5m (1999 - £8.9m)

- Profit after tax £0.1m (1999 - £0.8m)

- No dividend (1999 - £nil)

- Merchandise revenue up 28% to £4.8m (1999 - £3.8m)

- £23.4m spent on strengthening playing squad

- £7.0m received from player disposals


CHAIRMAN'S STATEMENT


Results for the Year Ended 31st July 2000

Following a disappointing year on the pitch it is with some relief that I report a small profit after tax of £0.1m (1999 - £0.8m). Turnover increased 13% to £48.0m (1999 - £42.6m) whilst our operating profit before amortisation of player contracts remains healthy at £7.5m (1999 - £8.9m).


Income

We were sold out for most of our League matches and averaged an attendance of 96% of capacity. League match receipts increased by £2.4m to £18.3m. Season ticket sales for 2000/01 have reached over 19,000, a new record for the Club.

We were unable to repeat our Cup successes of 1999 when we won the Worthington Cup and reached the semi-final of the FA Cup. Our performances in the UEFA Cup (two rounds), Worthington Cup (two rounds) and the FA Cup (one round) led to a reduction in Cup income of £2.7m to £3.7m. We held four Cup games here at White Hart Lane as against six last year.

Television income has risen £3.3m to £12.3m (1999 - £9.0m). Most of this increase came from our UEFA Cup deal with BskyB. The Club appeared live on television six times in the Premier League, the same as last year.
Sponsorship income grew 10% to £6.7m (1999 - £6.1m) largely as a result of our new deals with our partners adidas and Holsten.

Merchandise income of £4.8m (1999 - £3.8m) now represents the first full year of our three-year adidas deal. The previous year's income included the first month of trading of our new home kit therefore the figures reflect not only an absolute increase of 28% but also a strong underlying trend.

The White Hart Lane Conference Centre was launched in August 1999. Turnover from this division of £0.5m is included in other income this year. This was an encouraging first year.


Expenses

Cost of sales have increased by 20% to £45.4m (1999 -£37.7m). Within this category, amortisation on players' contracts has increased by £2.4m to £11.5m as a result of additions to the squad during the year and a full year charge relating to purchases of the previous year.

Payroll costs have increased 21% to £26.2m (1999 - £21.7m).

Administrative expenses increased by £1.6m due to a number of factors. These include costs for the new White Hart Lane Conference Centre, increased warehouse costs as we expand operations to keep apace with increased sales and the FA fine of £150,000.

The Football Association fine was levied against the Club for the alleged misconduct of the players at an away match against Leeds. We are still appealing strongly against this decision.


Player Trading

Strengthening of the squad continued with £23.4m spent onthe acquisition of new players.Player disposals generated £7.0m and a net profit of £4.0m.Within the profit of £4.0m there is a cost of £1.8m relating to the net book value of players released onfree transfers.


Balance Sheet

Net assets on the balance sheet remain largely unchanged at £41.2m.
Intangible assets have increased by £8.9m as a result of player trading.


Cashflow

The Group generated cash from operating activities of £7.4m. All of this cash plus an increase in borrowings was used to fund expenditure on player acquisitions of £17.6m. All amounts due from the sale of players at the end of July will fall into future years. The overall decrease in cash was £8.8m (1999 - decrease - £3.6m).


Dividend

Your Board continues to hold the view that any surplus funds are better used by further re-investment in the Club and therefore there will be no dividend in respect of this financial year.


Commercial

We are currently seeking planning permission to increase the stadium capacity to 44,000 by rebuilding the East Stand. We will not commit to pursuing this strategy until we feel sure that the additional capacity will be adequately utilised and we will closely study the effects of more live televised football from next season.

Our merchandise sales showed good increases last year both on a comparable basis and from new footage. This is in contrast to many othersports replica retailers and clubs reporting a slow down.

Our Internet sales show strong growth potential and this will be helped by our partnership with BskyB and Planet Football, our new Internet partners. Our Internet site is currently registering around seven million page impressions a month, probably ranking us as one of the most visited sports sites in the UK.

The White Hart Lane Conference Centre has been well received. We have included all the set up costs in this year's figures. The lack of any market presence prior to the launch makes the break-even position of the Centre in the first year very encouraging.

Our long-standing catering contract with Letheby and Christopher is due to end in May 2001. We have advertised for tenders and appointedprofessional advisers to manage the process.

We continue to develop our presence in the locality through our Football in the Community scheme. In addition we are now screening all away matches (where the away club allows) on our Jumbotron screens at the stadium and admission is free to children and senior citizens. In many cases this will be the only chance they get to see 'live' football in a stadium and the attraction is evident.


Football

Tenth position in the Premier League and early exits from all Cupcompetitions was very disappointing.

Our net spending on transfers this financial year was £16.4m (purchases £23.4m, sales £7.0m) and we have been the fourth highest net spender in the Premier League over the previous five years. Player acquisitions included Oyvind Leonhardsen, David McEwen, Matthew Etherington, Simon Davies, Anthony Gardner, Gary Doherty, Sergei Rebrov and Ben Thatcher.

Player disposals included Moussa Saib, Paolo Tramezzani, Justin Edinburgh, Espen Baardsen, David Ginola, Peter Crouch and Allan Neilsen.

The Youth Academy is still in its early stages of development and we have become more aggressive with our identification and registration of younger players. We have over 150 boys between the ages of 9-16 who train on a regular basis at Spurs Lodge. Our coaches are enthusiastic and capable of encouraging skilful football.

We are optimistic about the new under 17 intake. Included amongst these boys are four schoolboy international players and in the group that will join next year, we have three players who have already received international recognition. Over the last year six of our players represented their country at under 21 level.

The European Commission will ultimately rule on the system of transfer fees in this and other European countries. Let us hope that they take heed of representations made by the Football Association and the Premier League. Clubs must be able to protect their investments otherwise there will be little point in us making them.


Outlook

The Group is doing everything within its power to maximise revenues, all of which are ploughed back into strengthening the Club and playing squad.

We are working hard to obtain planning permission to redevelop the East Stand. Subject to the European Commission ruling we should begin work on building a new site for the sole purpose of the Academy.

The Premier League has collectively negotiated a new television deal taking us up to 2004. This not only guarantees the clubs more money from next year but also opens up other sources of income for individual clubsto develop.

I would like to thank our loyal fans for their invaluable support. We are all working towards the same goals - success and long term prosperity for Tottenham Hotspur. With patience on all sides I am confident that we will get there.


Sir Alan Sugar
Chairman
25th October 2000


Consolidated Profit and Loss Account
for the year ended 31st July 2000

2000


Operations,
excluding player Player
trading trading Total 1999
Note £'000 £'000 £'000 £'000


Turnover 3 47,974 - 47,974 42,585

Cost of sales (33,877) (11,520) (45,397) (37,703)


Gross profit 14,097 (11,520) 2,577 4,882

Administrative expenses (6,619) - (6,619) (5,052)


Operating profit/(loss) 6 7,478 (11,520) (4,042) (170)

Profit on disposal of
registrations - 3,987 3,987 1,889

Profit/(loss) before
interest and taxation 7,478 (7,533) (55) 1,719

Net interest payable (702) (426)

(Loss)/profit on ordinary activities
before taxation (757) 1,293

Tax credit/(charge) on (loss)/profit on
ordinary activities 4 815 (447)

Profit onordinary activities
after taxation 58 846

Equity dividends 2 - -


Retained profit for the year 58 846


Earnings per share
- basic 5 0.1p 0.8p
Earnings per share
- diluted 5 0.1p 0.8p

Turnover and operating profit/(loss) all derive from continuing
operations.

A Statement of Total Recognised Gains and Losses has not been presented
because there were no recognised gains or losses other than as stated in
the Consolidated Profit and Loss Account above.

Balance Sheets
as at 31st July 2000

Group Company
2000 1999 2000 1999
£'000 £'000 £'000 £'000
Fixed assets
Intangible assets 36,53327,627 - -

Tangible assets 47,483 46,842 47,424 46,771

Investments - - 1,345 1,345
84,016 74,469 48,769 48,116
Current assets
Stocks 1,051 450 1,051 450
Debtors 10,541 5,799 11,282 4,376

11,592 6,249 12,333 4,826
Creditors: Amounts
falling due within one year (45,038)(32,003)(15,471)(13,544)
Net current liabilities (33,446)(25,754) (3,138) (8,718)

Total assets less current
liabilities 50,570 48,715 45,631 39,398

Creditors: Amounts
falling due after more
than one year (8,024) (3,617) (7,014) (3,570)

42,546 45,098 38,617 35,828

Provisions for liabilities
and charges (1,302) (3,950) - -

Net assets 41,244 41,148 38,617 35,828

Capital and reserves
Called up share capital 5,085 5,075 5,085 5,075

Share premium account 11,287 11,259 11,287 11,259

Revaluation reserve 2,668 2,716 2,328 2,376
Profit and loss account 22,204 22,098 19,917 17,118

Equity shareholders' funds 41,244 41,148 38,617 35,828



Consolidated Cash Flow Statement
for the year ended 31st July 2000

2000 1999
Note £'000 £'000 £'000 £'000
Net cash inflow from operating
activities 7 7,433 13,531

Returns on investments and
servicing of finance
Interest received 9 48
Interest paid (455) (278)
Interest element of finance lease
payments (101) (196)

Net cash outflow for returns on
investments and servicing of
finance (547) (426)

UKcorporation tax paid (including
advance corporation tax) (1,081) (287)

Capital expenditure and financial
investment
Payments to acquire intangible
fixed assets (17,590) (13,902)
Receipts from sales of intangible
fixed assets 1,013 1,436
Payments to acquire tangible
fixed assets (2,190) (2,661)
Receipts from sales of tangible
fixed assets - 5
Net cash outflow for capital
expenditure and financial investment (18,767) (15,122)

Equity dividend paid - (252)

Cash outflow before use of liquid
resources and financing (12,962) (2,556)

Management of liquid resources
Decrease in short-term deposits - 399
Financing
Issue of ordinary share capital 38 174
Long term bank loan 5,000 -
Bank loan repayments (250) (1,000)
Capital element of finance lease
payments (638) (618)
Net cash inflow/(outflow) from
financing 4,150 (1,444)

Decrease in cash (8,812) (3,601)


TOTTENHAM HOTSPUR PLC


Notes to the preliminary announcement for the year ended 31st July 2000.

1. The financial information set out on the attached pages does not
constitute statutory accounts for the years ended 31st July 2000
or 31st July 1999 but is derived from those accounts. Statutory
accounts for the year ended 31st July 1999 have been delivered
to the Registrar of Companies and those for the year ended 31st
July 2000 will be delivered following conclusion of the Company's
forthcoming Annual General Meeting. The auditors have reported on
these accounts andtheir reports are unqualified and did not contain
statements under Section 237(2) or (3) of the Companies Act 1985.

The Financial Statements have been prepared on the basis of the
accounting policies in the previous year's financial statements.

Copies of the Report and Accounts will be mailed to shareholders on
8th November 2000.

2. No dividend payment.

3. Turnover

Turnover, which is all derived from the Group's principal activity, is
analysed as follows:

Year Year
ended ended
July 2000 July 1999
£'000 £'000

Gate receipts - Premier League 18,341 15,907
Gate receipts - Cup Competitions 3,737 6,411
Television 12,321 9,002
Sponsorship 6,693 6,067
Merchandising 4,825 3,758
Other 2,057 1,440
47,974 42,585


All turnover derives from activities in the United Kingdom.

4. Taxation

The total taxation credit of £815,000 comprises a credit inrespect of
the current year of £318,000 and a credit in respect of previous years of
£497,000, mostly relating to the benefit of tax losses which were not
previously recognised in deferred tax.

5.Earnings per share

Earnings per share have been calculated using the weighted average number
of shares in issue in each year.

Year Year
ended ended
July 2000 July 1999
£'000 £'000
Profit after taxation 58 846

Weighted average number of shares
in issue 101,613,129 100,951,384

Effect of dilutive potential
ordinary shares
Options 297,834 445,717
101,910,963 101,397,101

Basic EPS
Earnings per share 0.1p 0.8p

Diluted EPS
Earnings per share 0.1p 0.8p

6. Operating Loss

This is stated after charging/(crediting) the following:

Year Year
ended ended
July 2000 July 1999
£'000 £'000
Depreciation of tangible fixed assets:
- owned 1,273 1,134
- leased 276 276
Amortisation of registrations 11,520 9,087
Release of grants - deferred credit (116) (50)
Auditors' remuneration and expenses:
- audit fee 42 38
- other services 126 43
Operating lease rentals:
- land and buildings 208 150
- other 105 108

7. Reconciliation of operating loss to net cash inflow from operating
activities

Year Year
ended ended
July 2000 July 1999
£'000 £'000
Operating loss (4,042) (170)
Depreciation charge 1,549 1,410
Amortisation of registrations 11,520 9,087
Loss on disposal of tangible
fixed assets - 237
Increase in stocks (601) (106)
Decrease/(increase) in debtors 958 (1,482)
(Decrease)/increase in creditors (1,951) 4,555
Net cash inflow from operating
activities 7,433 13,531

8. Reconciliation of net cash flow to movement in net debt

Year ended Year ended
July 2000 July 1999
£'000 £'000
Decrease in cash in the year (8,812) (3,601)
Cash (inflow)/outflow from
increase in debt and lease financing (4,112) 1,618
Cash inflow from decrease in
liquid resources - (399)

Movement in net debt in the year (12,924) (2,382)

Net debt at 1st August 1999 (5,402) (3,020)
Net debt at 31st July 2000 (18,326) (5,402)