As a shareholder I have received the above document.and include a few details. If you want a copy yourself you can probably just pop into the office (nextdoor to the shop) and ask for a copy.

Figures for the 6 months to 31/1/00 (Comparatives for same period last year) In #m unless otherwise stated.

Turnover 28.1 25.1 Operating profit 5.8 5.7 Player trading (7.1) (0.5) Pre tax profit (1.3) 5.6 Cash 27.8 7.8

This results in an interim divi of 0.6p (0.6p) which will mean that the coffers of Jonno's Fat Cat Retirement Fund will be bloated by a further #6.53, not yet enough to get me to Marbella (much less the cost of the activities once there) but I'm working on it.

Comments from Fletcher's report:-

Revenues improved due to better TV deal on EUFA matches. Branded products sales down from #3.3m to #2.6m. Wage costs higher than anticipated due to too many players on the books. These were retained in order to give YBR time to assess the quality of the staff. This was a right decision "given the return to form of a number of key players". The 93 new boxes at SJP have been sold and demand exceeded supply.

"The disruption relating to the stadium and indeed our own handling of this has severely tested our relationship with our fans. Undoubtedly mistakes have been made in how we handled the communication of these issues and for this the board apologise unreservedly to all concerned" "We are fully committed to rediscovering the excitement that being involved with Newcastle United used to mean (!!-surely they're not bringing Alan Suddick back?) so that the fans will be proud to be associated with the club in its new stadium." "Bobby Robson and his staff are delivering the quality and style of football which is synonymous with Newcastle United" "We can forward (aren't these things proof-read?) to the future with confidence and pride."

Points to note :-

Cash at Bank #27.8m!!!!! (Only #7.8m last year.) This includes the first #10m of the interest-free loan from NTL. My guess is that we DO have a transfer kitty! (-; Short term (within one year) creditors is 24.1m (20.6m) and long term is a huge 68.3m (12.9m). Obviously, the long term will be payable out of future gate receipts.

Loss on player trading - can anyone explain what all this means? The figures break down like this (numbers in #000s):-

Amortisation of acquired player registrations 7449 Transfer fees not capitalised 55 Amortisation of signing on fees 1202 Profit on disposal of player registrations (1612) Total 7094

A note to the accounts tells of a profit on disposal of player registrations of #1.6, #8m and #12.1m respectively. (??????????) The chairman's notes state that "player trading during the period includes the acquisitions of Karelse, Gallacher and Gavilan, and the disposal of Dumas." Can anyone make head or tail of this?

-- Anonymous, May 12, 2000

Answers

>>>>>>>>"The disruption relating to the stadium and indeed our own handling of this has severely tested our relationship with our fans. Undoubtedly mistakes have been made in how we handled the communication of these issues and for this the board apologise unreservedly to all concerned"<<<<<<<

Sorry, but is this not some kind of a climb down on the part of the board. A tadge late in the day I know, but I've certainly never seen the like of it in print before prior to this. Or am I wrong?

-- Anonymous, May 12, 2000

and just imagine how much of those wages are given to players who a) dont play because they are nowhere near the first team squad and b) spend more time injured than on the training pitch Thank god YBR is at the helm. No wonder he is in for a busy summer ..not only buying but trying to get rid.... Its like Golden Harvest Supermarket in the Bahamas repackaging out of date goods in new wrappers and selling them off at half price as damaged goods Silvio Maric...Des Hamilton... the list goes on Will the tar stick with KD and Gullit..the former will get shafted at Celtic IMHO and the latter is keeping a very low profile performance related pay for mangers should exist AFTER they have been sacked aswell.

-- Anonymous, May 12, 2000

The amortisation figures ...

I think this means that the club is spreading (amortising) the cost of the player transfer fees over a period of 3 years (or more probably the length of their contract). This is just another play on the word deprecitaion, but they split assets into tangibles (the ground) and intangibles (the players). I'd guess you have to mark down the value of players but there is some techinical meaning around 'depreciation' and tangible assets. Similarly the signing on fees are spread over the length of the contract. Why 55k of the transfer fees isn't cpaitalised is strange, maybe, it's a par tof say the Gavilan deal which is dependent on future appearances and will be cpitalised when it has been paid. (I'm guessing (more) now).

The profit on disposal bit I think referred to the three separate accounting periods. The 1.6m is Dumas going, in the last 6 months. The #8m was a number from the 6 months up to Jan 99, probably Stevie Watson off to Villa (4), Gillespie to Blackburn (2.2) and JDT left at some point too. The #12.1m is for the 12 months to July 1999. This may include the sale of Hamman I think, and will definitely include Paul Dalglish. This note purely covers disposal information. The net figure is the #7094k spend for the last 6 months, which stacks up with all those centre-halves Gullit went collecting.

The bit that is of interest is that we are using up ~#14m worth of transfer fees each year. This number directly hits the profit and loss line. What it does mean is that we can run as a company with that sort of depreciation. What that means is that we can now spend that much each year and not make any difference to the profit/loss figures. This also stacks up with the reported #15m that Bobby has been given for this summer. I've tried this on with the nice boys on the RTG board. If they do their accounting the same way, and I don't see why not then they will also have an amortisation figure which matches the cost of their players. Shearer cost us #15m in 'cash' but hits our profit line at #5m a year for three years. Suddenly at the end of 3 years we 'gain' a #5m, for free. If we have the cash we can spend #5m a year and make no differnce to our profits. Compare this with Sunderland who paid #600k for Phillips. Each year they are righting off #200k and can spend that money 'for free' on strengthening the squad.

I can't get my head around the cash figure though. The leap from #7m to #27m doesn't stack up. #10m of it comes from NTL but not the full #25m. So somewhere we've gained another #10m. Half of this comes from being owed less by our debtors, but is offset by the fact we owe about the same amount extra to people. The only thing I can think is that comes from the refinancing of the debt/mortgage. In Spetember 1999 they paid off the #14.7m they owed and replaced it with a new loan of #55m. The subtle difference is that they don't have to pay anything on the #55m until September. Having looked at it I think this means they haven't had to pay any mortgage for a year !! If this happened to you or me it would save us a fortune, I'm guessing that the saving NUFC have made through this clever deal has gained #10m cash.

I'm quite happy for anyone to shoot holes in this, I did fail my O- Level accounting.

-- Anonymous, May 12, 2000

ITK

This is in fact, NOT the first time the apology has been made. It was made at the AGM and at the EGM when we voted for the NTL deal. It was at that time the board announced new appointments to build a bridge between board and fans.

To Pete

The players wages is a big issue and the 2 previous managers have much to answer for. I feel that the jury is still out on most of Gullit's buys. Maric failed. One of the 3 centre-backs has been sold at a profit, 2 others have been dogged by injury. We have been unlucky with Big Dunc (although arguably THAT goal was worth the entire #8m! (-; ). Domi is probably still worth at least what we paid. Karelse is probably a loss. Dyer looks as though he has been a superb buy, so Ruud is probably ahead on the financial contribution of his transfer policy. At present, I still feel that Gullit's major failing was the morale issue, which undermined any good deals he may have made.

TSM is a different kettle of ball games. He made so many high value signings which failed some because they were played out of position. He also signed far too many players, several of whom are still hanging on, weighing down on the club's finances. I think the board has to carry the can for some of this - FS was once quoted as saying that there were only so many pegs in the changing rooms. Maybe he should have counted them earlier. Strength in depthis one thing, Tsm was building weakness in depth.

Funnily enough, TSM's buying habits were improving during his final months there when he bought Nobby, Hammaneggs and Charvet, all of whom were value for money, but he had already done too much damage before that.

Just to refresh our memories, it is sad to reflect that we got TSM because we couldn't get, at the time, YBR ...

-- Anonymous, May 12, 2000

Jonno, You reminded me about some of TSM's less successful buys. Do you know how lng these donkeys have left on the sands before their contracts run out and how much each cost?

I'm thinking particularly about the likes of Hamilton, Maric and the rest of the overpaid, undertalented players. It would be interesting to know when we no longer have any responsibilty to their contracts. Sod the xfer fees we might lose - as Mac points out, this is written off over the period of their contracts. It's the on-going wages that p*ss*s me off.

-- Anonymous, May 12, 2000

Screach

I'm afraid I don't know when any of the contracts run out. I guess the info is in the public domain but it's not as rivetting as the league tables so it's hard to find the info anywhere.

Macbeth

Well done for having a crack at this question! I understand the concept of amortisation but I can't see how it produces the figures quoted. You use Al as an example. I thought we signed him for 5 years so he would be "amortised" and hit the P&L for #3m per annum. However we have since re-signed him before the expiry of the 5 years. What happens then? If (say) #6m remains on the BS and he now signs for a further 4 years does his cost now become #1.5m per annum? That would seem to make sense. Or do we continue at #3m and the final 2 years are "free"? Either way, this is relatively simple to understand but doesn't go far towards explaining the published numbers.

Remember, these accounts are for the half-year to 31/1/00 so your guess that it accounts for 6 months to Jan 99 and 12 months to July 99 can't be right I'd have thought. The numbers should refer to the 6 months only (unless bracketed as referring to the comparitive period last year). Maybe I should write to the FD and ask how these numbers are arrived at.

Re the cash figure, when we took out the #55m loan, I believe there was cash in there in addition to what was required for the stadium. I think there was a mention of a #5m contingency or something of the sort. Since that BS was drawn up we have had a good cup run and are about to sell tickets for the expanded SJP so the cash position in the July accounts should be extremely healthy, or YBR may already be unpacking his shopping bags ....

"Van Nistelroy - oh it's broken - you shouldn't have put the milk on top of that one pet, Ronaldo - oh no - look you've just hoyed these in anyhow pet - they're aall smashed to bits - oh well, the eggs are aall reet - let's mek an omelette. I'll try takin' that Big Dunc back the morra for a refund but aa think they'll knaa we've used it."

-- Anonymous, May 12, 2000

Thanks for the analysis - very soothing to read. Nothing like a good hotch-potch of numbers to read though at the end of the day! So I guess we are not in trouble, despit KDs best efforts?

-- Anonymous, May 12, 2000

When players sign a new contract the club could re-value the likes of Shearer and send this to a revaluation reserve but this is not the practice with intangible assets, it's more likely that when sold, they make a profit or loss on disposal of players which is simply the price we get compared to the book price of the player.

-- Anonymous, May 13, 2000

Shearer amortisation .... I think it that once his initial transfer fee has been amortised he stops amortising. Comparing it with the depreciation of a PC say over three years. If you depreciated your #1200 PC at #400 a year then after 3 years it's yours. You can continue to use it but it stops being depreciated. The electricty running costs just go somewhere else in the books. Similarly Shearer's extended contract just becomes a wages cost rather than an amortisation.

The three numbers used in all the columns are 1.... 6 months to Jan 2000 2.... 6 months to Jan 1999 .... to allow like on like comparison 3.... 12 months to July 1999 ... this allow you to see what the 1999 figures for the whole year looked like bearing in mind the half year position. This is most relevant on the "Net cash inlfow/outflow " line which shows that in the 6 months to January we have outflows of #4.3m up to Jan 99. This is because that 6 months has no season ticket money in it. The 12 months to July 1999 shows net for the whole 12 months as #5m. The three transfer numbers you originally questioned are for the above three periods, so the #1.6m is for the last 6 months, the #8m is for the equivalent 6 months in 1999, and the #12.1m is for the 12 months, but includes the #8m.

But yes, you could ask the FD what he thinks !

-- Anonymous, May 13, 2000