Can somebody find them please, they got a ten second mention on Radio 5, but I need to know how much dividend I'm getting paid on such a small company loss.

-- Anonymous, March 20, 2002

Answers

adding profit

-- Anonymous, March 20, 2002

Newcastle claim they are looking to the future with confidence following a "strong six months" which have seen them generate an operating profit as well as continue to challenge for the Barclaycard Premiership title.

The Magpies' push for the championship has faltered in recent weeks, but they were able to release interim financial results which show an operating profit of £1.8million.

Non-executive chairman John Fender welcomed the news and predicted: "With the continued commitment of everyone at St James' Park and the support of our loyal fans we look forward to the future with confidence."

-- Anonymous, March 20, 2002

LONDON (AFX) - Newcastle United PLC posted a 16 pct rise in interim operating profits before player trading but said it is to cut its first half dividend from 1.03 pence per share to 0.8 pence. The Premiership club added it is continuing to grow revenues as a result of the stadium expansion, revised media rights and the pursuit of other commercial opportunities, whilst ensuring that costs are kept under control. The comments came as it posted an operating profit before player trading for the six months to January 31 up 16 pct to 7.9 mln stg, from 6.8 mln previously. Sales for the period were 35.8 mln against 32.2 mln stg. Pretax loss for the period was 1.39 mln stg against profit 5,000. Adjusted earnings per share of were 3.1 pence against 3.4 pence.

-- Anonymous, March 20, 2002

Not sure how you do a link:

http://mwprices.ft.com/custom/ftmarkets-com/news/story.asp? siteid=ft&dist=ft&guid=%7BE44070D5%2D3C42%2D4A29%2D933E% 2DB6DCEA23BD43%7D

-- Anonymous, March 20, 2002

A cut in the dividend!!! I'll just have to cut down on food!

-- Anonymous, March 20, 2002

Dunno how many shares you've got Jonno (or how much of a loss you've had to swallow as a consequence), but I just calculated the fall in my dividend as £4.00. I'll just have to cut out a couple of pre-match pints on Saturday - probably Gav and Min's:-))

-- Anonymous, March 20, 2002

Not too bad, but it shows how we are breakeven at best on our current player trading basis of negative 6M for 6 months. The current six months though will bring in plenty of TV revenue - possibly an additional 7M or more. Anyone know how player trading is broken down? ie if we buy Jenas is that a player trading loss or is his cost capitalised and amortised (there seems to be a player amortisation line also). Player trading losses might therefore be the difference between residual costs and sale price when we sell a player. Any clues?

-- Anonymous, March 20, 2002

Trying to work out a comparison with last year is difficult but ....

Turnover is up by £3.6m, I guess through having a couple of extra cup games and the Intertoto games. Good.

The operating expenses are up £2.5m. Some of this will come from having to put on those extra games but I suspect more from players wages increasing as Robert and Bellamy replaced Glass and Gallagher on the wage bill. Not good.

Between the two an improved day to day operating profit of £1.1m. Good.

Our "Player trading" which includes the 'amortisation' costs of acquired players (transfer fees spread over the life of a contract to you and me), signing on fees and disposals, increased from £5.1m to £6.1m. It could be argued that the extra profit mentioned earlier has been ploughed straight into players.

Taking everything above into consideration the operating profit is roughly the same as a year ago at £1.8m.

A year ago the £1.766m was nearly exactly matched by the clubs interest payments of £1.761m leaving the club a profit of £5,000 on the half year.

A dividend a year ago was set at 1.03p per share hitting the clubs books for £1.5m. The overall loss ofr the 6months was that £1.5m dividend paid out.

This year the interest payments seem to be £3.2m (I'm working this out, without all the facts), a huge leap from the £1.7m of a year ago. These interest payments swamp the £1.8m profits generated by the business and mean there is a 6 month loss of £1.4m. Having achieved this performance the directors of the company have reduced the dividen to 0.8p per share, whic I calculate as the shareholders taking out another £1.16m from the club. The retained overall loss is therefore 1.4 + 1.16 or £2.56m for the six months.

In the period ending July 2000 the shareholders took out £3.84m on a loss of £19m. In the period ending July 2001 the shareholders took out £3.8m on a loss of £13m. In the 6 months to 1/2001 the shareholders took out £1.16m on a loss of £1.4m In total the shareholders have taken out roughly £8.8m in dividends in a two and a half year period that has shown a combined loss to the company of £33m. God knows how much the shareholders will take out if the club were ever profitable !!!

-- Anonymous, March 20, 2002

I've worked out the player trading - I was double counting. As MacB saya sthe player trading loss includes the player amortisation.

Re interest charge MacB. Net interest payable increased slightly to £2.1m (2001: £1.8m) reflecting a full six months securitisation interest charge (2001: five months only). There are two other loss items though that may be one offs - the refinancing charge of 642,000 and a share of the operating loss in the joint venture with PTV of 389,000. Not sure were your increased interest costs came from.

-- Anonymous, March 20, 2002

Official site has some details but more significantly, reports that the go-ahead for the youth academy has been given. Sounds pretty impressive if it all comes off.

-- Anonymous, March 20, 2002

This joint venture worries me. I hope it's not a black hole:

During the year a joint venture was entered into with PTV (a subsidiary of NTL). The Company subscribed for 500 shares with a nominal value of GBP1 per share. The joint venture incurred a loss for the six months ended 31 January 2002 of GBP778,000.

-- Anonymous, March 20, 2002

I had a hole between operating profits and P&L that I could only see to fill with interest payments, as I didn't have all the figures. You highlighting the other areas makes up the difference. And makes me feel better about the interest payments, but more worried about the Premium TV link.

-- Anonymous, March 20, 2002

Messrs. Shephard and Hall have extracted ca.£6m in dividends in the last 2.5 yrs from a public company that has consistently made losses and a company who's nett worth has significantly diminished during the same period.

Imho that is utterly scandalous, and would be publicly seen to be were NUFC a 'normal' company where the shareholders were able to vote out Directors who were taking executive action that was clearly not in the best interests of all the shareholders, or indeed the business.

-- Anonymous, March 20, 2002

but they have lost an awful lot of paper value due to the sector being a poor performer, rather than through any poor management on their behalf, they don't deserve to be punished just because of the ways of the world

and what about Jonno milking the club for every penny he can get ??

-- Anonymous, March 20, 2002

At the risk of boring the tits of everyone...

The 6 months results included income from 3 BskyB games and 4 pay per view, which netted GBP 9.5M. Apparently since Jan we have already had a further 4 BSkyB games, 2 pay per view, 3 ITV highlight games, 4 live FA Cup games and 2 Worthington Cup live games. If as I suspect the pay per view doesn't contribute much, then the 6 months to July 31st 2002 is looking like a bumper period which will more than pay for Jenas on it's own. If we get through to the FA semis and Europe next year, there'll be even more revenue coming in. Looking at ManUtd results, they net ca. 30M a year from TV revenues, of which 20M is Champions League related. In comparison our 6 monthly no Europe income of 9M looks pretty good.

-- Anonymous, March 20, 2002

Sh*t! where've me tits gone! :-)

-- Anonymous, March 20, 2002

You'll just have to borrow someone else's now, Dave. :-)

-- Anonymous, March 20, 2002

allegedly Kats has plenty

-- Anonymous, March 20, 2002

Macbeth - my comments have nothing whatsoever to do with adverse market sentiment, which certainly impacted the share price in the post-flotation period.

My comments apply specifically to issues over which they have direct management control - and imo it is iniquitious for executive management to be extracting large amounts of the company's free cash flow in the form of dividends during a period when they have presided of significant destruction of shareholder value, ie. the business's 'nett worth' as expressed on the Balance Sheet. This is called rewarding themselves for failure by any normal yardstick.

Of course, things are looking up on the playing field - as evidenced by Peter Miller's figures. When success on the playing field is ultimately reflected on the Balance Sheet, and they are able to demonstrate they are finally creating shareholder value, then it would be perfectly valid and reasonable for them to take their fair share in dividends - but not until.

BTW, my believe is that the continual fall in the share price over say the last two years or so, has much less to do with "sector sentiment" than the City's inherent lack of confidence in the Company's management - and the dividend issue is but one that has contributed to that lack of confidence.

-- Anonymous, March 20, 2002

clarky, is this the rant of a shareholder or a fan?

and who are "THEY"

-- Anonymous, March 20, 2002

George - I'm sure you know full well who they are - the senior Directors and major shareholders of NUFC plc.

My "rant" is hopefully the rational observation of a shareholder, who also happens to be a fan. Why do you ask - is it factually adrift, or what?

My main beef is what I regard as the inappropriate extraction of dividends at a time when the business has been massively loss-making and the nett worth of the company has been going down the pan. As a either a shareholder or a fan I believe that cash would have been of material benefit to the business if it had been retained to buy players or used to pay down the enormous level of debt.

Do you see any inconsistency in my position - one I have espoused for a considerable time?

-- Anonymous, March 20, 2002

Clarky I forgot to put the brackets around my comments, it is outrageous they pay themselves a dividend on top of the bonuses they pay themselves as directors, which you haven't mentioned (this time !)

-- Anonymous, March 20, 2002

clarky, i hear you, but i think that satisfying the objectives of the shareholder and the fan simultaneously is tricky since they are often at odds.

take the dividend, .8 pence or 1.6 pence per year on a divi valuation basis at about 15% (which is probably low for a football thing) makes the shares worth about 11 pence a go. hardly big money and significantly less that 24 pence on the mkt.

so lets invest the cash in players instead, the 16 million invested in bellamy and robert at 15% needs to pay about 2.4 million net, add their wages (incremental operating expenses) of 30k per week each you need to add about 5.5 million to the top line for the investment to pay off. as a fan you're ecstatic but as a shareholder its marginal even this season. when you balance this out with marcelino at 6 mill and 30k per week, i doubt he added 2 mil per year to the top line. not a great business to be in.

as a shareholder i'd be up for selling the entire squad for >100mil as someone valued it recently, sell the ground and everything else and pay down the debt (what is it? 50 mil) i think you'll come out better than the 30 odd mil in market cap that we have today.

i'm not defending anybody here but i think "THEY" who are btw the shareholders have an impossible job. i liked the setup better when it was john hall's hobby.

-- Anonymous, March 20, 2002

I take your point George. However, I will never accept the need for a loss-making business to be paying dividends - especially when the two Directors who run the business own 60% of the company, and when free cash flow is critical to acquiring players and/or redeeming debt.

Right now it's not a great business, because the players are extracting too high a percentage of the added value, however, the application of sound business management principles are as valid and important in this as in any other business.

-- Anonymous, March 20, 2002

Macbeth - I don't actually recall previously criticising the Director's bonuses, although others certainly have - it was a big bone of contention at the last AGM.

I haven't really looked too closely at it, but I doubt their overall remuneration package as directors is out of kilter for the size of the business. However, with regard to dividends..................! ;o{)

-- Anonymous, March 20, 2002

Director bonuses based on performanace achievement on top of director dividends for non-achievement doesn't work. I approved of bonus for Jones (?) for managing the ground extension, but Douglas Hall's was for keeping out of the way as much as possible.

-- Anonymous, March 20, 2002

On further reflection I'm pleased that the Board at least appear to have partially responded to the mood of shareholders at the last AGM and reduced the dividend this time around.

Those present voted unaminously against the proposed dividend - quite an amazing action for a comapny's shareholders to take when you think about it. However, the motion was then carried massively on a share count - which basically means the two major shareholders simply over- ruled the declared wishes of the majority of their shareholders to do what they wanted anyway. Democracy in action!

-- Anonymous, March 21, 2002

I've only just found time to look at these figures so apologies for the delayed reaction.

Clarky - I don't in any way disagree with your sentiment, but isn't it possible to interpret the 'facts' in a different light? i.e. the importance to any listed company to try and maintain some sort of a dividend to shareholders to prevent them all running for the exits at the same time and turning the plc into a 'penny dreadful'? That being the case the biggest potential criticism might be to query the board's initial decision to raise dividends to a level that has (subsequently) proved unsustainable? Whether that was forecastable or whether it's an easy call with the benefit of hindsight could of course be argued by parties concerned ad nauseam - Latin for "until we all puke" ?!

-- Anonymous, March 22, 2002

LT - I'm sure that would be the defence the plc would offer.

In truth, I don't really believe the major shareholders either need the money, or are deliberately raping the business - however, I do think they have been badly misguided in maintaining an unecessarily high dividend.

All my corporate experience was in the US where there isn't the obsessive dividend culture that pervades the UK markets - driven I suspect by the Pension Funds - so my view is somewhat clouded.

The basic problem here is that NUFC maintained the absolute level of their dividend while the both the share price and the Balance Sheet have collapsed. This has made the level of dividends paid look increasingly 'dubious' and injudicious.

I suspect even the reduced dividend equates to an unrealistically high yield of over 15%. Far from attracting investors - as you would normally expect - this has simply reinforced cynicism towards the acumen and professionalism of management that has resulted in NUFC plc shares being widely regarded in the City as 'toxic waste'.

Dividends are supposed to be a distribution of a company's profits to shareholders: when they continue to be paid when the company is losing money they directly weaken the Balance Sheet, and destroy shareholder value. When this largely benefits the controlling Directors it raises inevitable suspicions as to their integrity and competence.

-- Anonymous, March 22, 2002