HIGHLIGHTS
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 on the 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 on free 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 other sports 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 appointed professional 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 Cup competitions 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 clubs to 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
For Further Information Please Contact:
Tottenham Hotspur Football Club
John Fennelly – Press Officer
Tel: +44 20 8365 5000
Fax: +44 20 8365 5005