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Leeds United PLC (LUFC)

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Monday 31 March, 2003

Leeds United PLC

Interim Results

Leeds United PLC
31 March 2003


                                LEEDS UNITED PLC

             Interim results for six months ended 31 December 2002

Leeds United plc ('Leeds United' or 'the company'), the holding company of Leeds
United Football Club, announces interim results for the six months ended 31
December 2002.


KEY POINTS

•   Turnover of £34.6 million (2001: £38.3 million) impacted by lower
    income from UEFA Cup TV rights.

•   Loss before tax of £17.2 million (2001: loss of £13.8 million) also
    reflects player costs prior to January transfer activity.

•   Disappointing football performance led to departure of Terry Venables
    as first team manager and appointment of Peter Reid for the last eight games of
    the season.

•   Decision of Peter Ridsdale to stand down as Chairman following tough
    action taken to generate funds from player sales and to reduce costs.



PETER RIDSDALE (OUTGOING CHAIRMAN) SAID:

'This has been a very tough six months for the company and our performance both
on and off the pitch has been unsatisfactory.  This means that tough action has
had to be taken to generate funds from player sales and to reduce costs both on
and off the pitch.

Although difficult, it is necessary to balance our books to suit our
current position.  One outcome of this has been to subject me to significant
comment, and created pressures that are not right for me, my family or the club.

Therefore, after five years as Chairman I have decided to step down and hand
over the reins as Chairman to Professor John McKenzie who has my full support.

I would like to thank the fans and the players for their support and kindness
over my tenure and look forward to contributing to our future in a non-executive
capacity'.

PROFESSOR JOHN MCKENZIE, THE NEW CHAIRMAN OF LEEDS UNITED PLC, SAID:

'The priority for the club is to focus on avoiding relegation, then to balance
the obvious need for even greater financial prudence and control with the
ability to produce a football squad which has the capability of competing in the
top echelon of the Premiership.

It will be a very tough challenge to take the business forward in this way but
it is one that I relish.

I would also like to put my thanks on record to Peter for his loyal contribution
to Leeds United over many years'.

31 March 2003



ENQUIRIES:
Leeds United plc                                       Tel:     0113 367 6000
John McKenzie, Chairman
Stephen Harrison, Chief Operating Officer

Binns & Co. Public Relations                            Tel:    020 7786 9600
Peter Binns
Emma McCaffrey
Paul McManus
Samuel Allen

                                LEEDS UNITED PLC

           INTERIM RESULTS FOR THE SIX MONTHS ENDED 31 DECEMBER 2002

                              CHAIRMAN'S STATEMENT

Introduction

The figures for the past half-year are disappointing and reflect the fact that
we missed out for the second year running on qualification for the Champions
League.

Having assembled a squad with a cost base that required regular European
football, this has led to a requirement to reduce overall costs and particularly
those of the playing squad.  As part of this process, Rio Ferdinand and Robbie
Keane were sold to Manchester United and Tottenham Hotspur respectively during
last summer's transfer window.  Nick Barmby and Paul Okon joined the squad, with
Teddy Lucic joining on a one-year loan basis.

TV revenues for the UEFA Cup were substantially lower, reflecting the reduced
competition from TV companies for rights to the earlier rounds of this
tournament.

Having made a change of football manager with the appointment of Terry Venables
at the start of the season, results on the field have been extremely
disappointing.  This has led to a lower number of live Sky games than we have
experienced previously and a substantial reduction in Sky merit payments
expected for the end of the season.  Since the half-year end we took the
decision to make a further change of football manager, with Peter Reid being
appointed for the last eight games of the season.

For the first time in this country, the transfer window system was introduced
meaning that players could only be bought and sold during two periods of the
year (end of season to August 31 and during January of each year).  This new
system meant that further opportunities to reduce player costs were not possible
until after the half-year end.  During January, Lee Bowyer, Robbie Fowler and
Jonathan Woodgate were sold, with Olivier Dacourt going to Roma on loan.  The
impact of these transfers will be reflected in the second half numbers.

At the AGM in November, I announced the intention to review both the executive
and non- executive management structure and the non-playing cost base.  This led
to the appointment earlier this year of two new non-executive directors, John
McKenzie and Neil Holloway.  In January this year we announced the disposal of
the Leeds United travel business and in March of this year we announced a
further reorganisation of the executive and administration management structures
with targeted annualised cost savings of £3 million.  As stated at the time,
these measures will have a minimal impact this year, but are significant in
following years.

The ongoing challenge will continue to be to get the cost base into line with
anticipated revenue streams.  Further action will be needed in the coming months
to achieve this.

Since becoming Chairman we have mostly had relatively good performances both on
and off the pitch until the current season.  This year's results have therefore
been extremely disappointing.  In a high profile role, when results are not up
to expectation levels, you rightly expect criticism.  This comes with the
territory.  When this criticism becomes so intense that it affects your family
and health, it requires clear reflection on the right way forward.  The
intensity of personal criticism has led me to conclude that the best decision
for myself, my family and the company is that I step down as Chairman of the PLC
and football club and relinquish all executive responsibilities.  This I am
doing today.

My successor, John McKenzie, recently joined the board and will have the total
support of myself and the rest of the board in steering the company through the
challenges ahead.

On a personal level, I have been asked to stay on the board as a non-executive
director.   I am pleased and honoured to accept this offer.

Results

Turnover in the period fell by 10% to £34.6 million (2001: £38.3 million) while
operating loss before player trading was £10.1 million compared to £2.4 million
in the previous year.

The charge for player trading of £3.5 million (2001: £9.0 million) reflected the
amortisation charge of £8.8 million, down £0.4 million on the previous year,
offset by the profit on disposal of players of £5.3 million (2001: £0.2
million).

After net interest of £3.6 million (2001: £2.4 million), the loss before tax was
£17.2 million, compared with a loss of £13.8 million in the previous year.  The
higher interest charge arose as a result of the full period funding cost of the
£60 million 25-year loan notes that were issued in September 2001.

Review of the season so far

Following the appointment of Terry Venables as manager of the first team in
July, the season began well, with early victories against Manchester City, West
Bromwich Albion, Newcastle United and Manchester United.  From the end of
September however, the team endured a difficult run, collecting just five points
from eleven games up to the middle of December.  During this period we were
knocked out of the UEFA Cup at the 3rd round stage by Malaga and the Worthington
Cup at the same stage by Sheffield United.

The Christmas period brought some respite, with a run of thirteen points from
the five games until mid-January.  Following this, however, performances
worsened significantly and the last nine games have brought just four points.
This run has left us in 16th place in the league with seven games to go until
the end of the season.  During this period we were also very disappointed to be
knocked out of the FA Cup at the quarter final stage by Sheffield United.
Following this latest run of results, we made the change of manager which I
referred to above. Peter Reid's task is first to secure the outstanding points
needed to ensure continued Premiership status and secondly to lay the
foundations for a more successful season next year.

One of the highlights of the season has been the emergence of James Milner from
the Leeds United Academy into the first team squad, where he has performed with
some distinction, becoming the youngest-ever Premier League goal scorer with his
goal against Chelsea in December.  During the period we opened the new Academy
training building at Thorp Arch.  Together with an indoor pitch, the complex
boasts some of the most impressive training and physiotherapy facilities in the
country. There are also encouraging signs that over the coming seasons James
will be joined by several other highly talented youngsters emerging from the
Academy structure.

Trading summary

Gate receipts

Gate receipts income rose slightly to £7.0 million (2001: £6.7 million).
Domestically, average league attendances were lower at 38,931 (2001: 39,820) and
season ticket sales fell by 7% to 25,327 (2001: 27,132).

Television and broadcasting

Total television and broadcasting income fell by 25% to £9.7 million (2001:
£12.9 million).  The reduction was due to lower media rights for the UEFA Cup,
which accounted for a loss in revenue of £3.3 million.  This was partly offset
by the increase in value of the Premier League broadcasting contract, however
this impact was mitigated by the fact that we had two fewer live matches
broadcast compared to last year.

Merchandising

Merchandising sales at £5.2 million were in line with the previous year (2001:
£5.3 million).  Sales in our retail stores suffered as a result of team
performance but these were offset by higher royalty income.

Other commercial income

Commercial income fell by 7% to £8.7 million (2001: £9.4 million).  Sponsorship
and executive sales were comparable to last year in a tough market given the
performance of the team.  Our conference and banqueting business reported a 6%
growth in revenue to £2.0 million for the period.  The fall in income overall is
explained by the outsourcing of our publishing business.  Whilst the gross
profit from the business was similar to last year, both turnover and cost of
sales reduced.

Our travel business, which was sold for a nominal sum after the period end,
generated £4.1 million of income in the period.

Expenses

Administrative expenses before player trading increased to £36.2 million (2001:
£31.2 million).  Payroll costs increased by £4.9 million to £28.1 million (2001:
£23.2 million).  This increase is due to new players (Barmby, Okon and Lucic),
the full period effect of players purchased part way through last year (Johnson
and Fowler) and squad contract inflation.  The wage saving from the sales of
Ferdinand and Keane is offset by the additional charge for David O'Leary's
compensation.

Other operating costs at £8.1 million were consistent with last year (2001: £8.0
million).

Financial position

The deficit on shareholders' funds at 31 December 2002 was £15.8 million
compared to a surplus of £1.4 million at 30 June 2002, reflecting the loss in
the period of £17.2 million.

Net debt at 31 December 2002 was £78.9 million, an increase of £1.0 million in
the period (30 June 2002: £77.9 million).  The movement is explained in the
table below.

                                                                            £m
Net debt 30 June 2002                                                     77.9
Net cash outflow from operating activities                                 5.7
Capital expenditure                                                        3.0
Interest payments                                                          5.4
Proceeds from player sales in the period (note 1)                        (30.0)
Payments in respect of players acquired (note 2)                          16.9

Net debt 31 December 2002                                                 78.9



Note 1: Ferdinand, Keane
Note 2: Fowler, Johnson, Keane, Barmby

Outlook

As a board we have already taken tough decisions to reduce costs and to raise
funds in order to close the gap created by the lack of footballing success.  The
likely absence of participation in European competition next season limits the
opportunity to drive top line growth from the business.  Looking forward,
however, we are committed to moving the business towards an operating break-even
position as soon as possible.  We intend to do this by ensuring that we select
the right manager for the future to drive improved performances from what
remains a highly-talented squad.  We will do this, coupled with a tight control
of the cost base, to ensure that the financial performance of the business
improves accordingly.


                                                                  Peter Ridsdale
                                                                        Chairman
                                                                   31 March 2003


                                LEEDS UNITED PLC

           INTERIM RESULTS FOR THE SIX MONTHS ENDED 31 DECEMBER 2002

                      CONSOLIDATED PROFIT AND LOSS ACCOUNT


                                                             Unaudited    Unaudited    Audited
                                                            six months   six months       year
                              Operations                         ended        ended      ended
                           before player           Player  31 December  31 December    30 June
                                 trading          trading         2002         2001       2002
                  Note             £'000            £'000        £'000        £'000      £'000

Turnover              4           34,649                -       34,649       38,269     81,503
Cost of sales                     (8,547)               -       (8,547)      (9,431)   (17,689)

Gross profit                      26,102                -       26,102       28,838     63,814
Administrative        5          (36,218)          (8,783)     (45,001)     (40,475)   (92,320)
expenses       
                                 
Operating loss                   (10,116)          (8,783)     (18,899)     (11,637)   (28,506)

Profit on
disposal of
player
registrations                          -            5,261        5,261          178        296

Loss on ordinary
activities before
interest                         (10,116)          (3,522)     (13,638)     (11,459)   (28,210)
                                 
Interest                             
receivable                           265                -          265          173        306

Interest                          
payable                           (3,845)               -       (3,845)      (2,529)    (5,971)

Loss on ordinary
activities before
tax                              (13,696)          (3,522)     (17,218)     (13,815)   (33,875)
                                 
Tax on loss on
ordinary
activities            6                -                -            -            -          -
                      
Loss on ordinary
activities after
tax retained and
transferred to
reserves                         (13,696)          (3,522)     (17,218)     (13,815)   (33,875)

Loss per share        8                                          (4.95p)      (3.97p)    (9.75p)



All the above results relate to continuing operations.


Further analysis of the profit and loss account is c

There are no recognised gains and losses for the period ended 31 December 2002
and the prior period other than as stated in the profit and loss account above
ontained in note 3.



                                LEEDS UNITED PLC

           INTERIM RESULTS FOR THE SIX MONTHS ENDED 31 DECEMBER 2002

                         CONSOLIDATED BALANCE SHEET


                                           Unaudited      Unaudited    Audited
                                         31 December    31 December    30 June
                                                2002           2001       2002
                                Note           £'000          £'000      £'000

Fixed assets
Intangible assets                             37,776         76,883     66,469
Tangible assets                               44,514         39,177     42,537

                                              82,290        116,060    109,006

Current assets
Stocks                                         2,906          1,579      2,301
Debtors: due within one year                  16,782         26,476     14,120
Cash at bank and in hand                       3,656          7,766     15,354

                                              23,344         35,821     31,775
Creditors: amounts falling due               (39,970)       (44,695)   (57,042)
within one year                

Net current liabilities                      (16,626)        (8,874)   (25,267)

Total assets less current                     65,664        107,186     83,739
liabilities

Creditors: amounts falling due
after more
than one year                                (81,488)       (85,732)   (82,345)

Net (liabilities)/assets                     (15,824)        21,454      1,394

Capital and reserves
Called up share capital             9          3,476          3,476      3,476
Share premium account               9         47,557         47,557     47,557
Profit and loss account             9        (76,044)       (39,031)   (58,959)
Revaluation reserve                 9          9,187          9,452      9,320

Equity shareholders' (deficit)               (15,824)        21,454      1,394
/funds                         


                                LEEDS UNITED PLC

           INTERIM RESULTS FOR THE SIX MONTHS ENDED 31 DECEMBER 2002

                    CONSOLIDATED CASH FLOW STATEMENT

                                           Unaudited      Unaudited    Audited
                                          six months     six months       year
                                               ended          ended      ended
                                         31 December    31 December    30 June
                                                2002           2001       2002
                                Note           £'000          £'000      £'000

Net cash outflow from operating    10         (5,675)       (10,253)    (5,716)
activities
Returns on investments and
servicing of finance
                                              (5,402)        (1,348)    (3,212)
Capital expenditure and                       10,289        (26,135)   (29,015)
financial investment            

Cash outflow before use of                      (788)       (37,736)   (37,943)
liquid resources
Financing                                    (10,910)        41,042     48,837

(Decrease)/increase in cash in     11        (11,698)         3,306     10,894
the period                      




RECONCILIATION OF NET CASH FLOW TO MOVEMENT IN NET DEBT

                                           Unaudited      Unaudited    Audited
                                          six months     six months       year
                                               ended          ended      ended
                                         31 December    31 December    30 June
                                                2002           2001       2002
                                Note           £'000          £'000      £'000

(Decrease)/increase in cash in     11        (11,698)         3,306     10,894
the period                     

Cash outflow/(inflow) from
decrease/(increase) in debt
and lease financing
                                              10,910        (41,042)   (48,837)

Change in net debt resulting
from cash flows
                                   11           (788)       (37,736)   (37,943)
New finance leases                 11           (171)             -       (563)

Movement in net debt in the                     (959)       (37,736)   (38,506)
period
Opening net debt                   11        (77,891)       (39,385)   (39,385)

Closing net debt                   11        (78,850)       (77,121)   (77,891)





                                LEEDS UNITED PLC

           INTERIM RESULTS FOR THE SIX MONTHS ENDED 31 DECEMBER 2002

                          NOTES TO THE INTERIM REPORT

1.         Basis of preparation

The interim accounts have been prepared on the basis of the accounting policies
set out in the group's statutory accounts for the year ended 30 June 2002. The
financial information presented is unaudited and does not amount to full
statutory accounts within the meaning of the Companies Act 1985. Full accounts
for the year ended 30 June 2002, upon which Deloitte & Touche gave an
unqualified report, have been delivered to the Registrar of Companies. The
group's auditors, Deloitte & Touche, have carried out a review of the interim
accounts, which were approved by the board of directors on 31 March 2003.

2.            Significant accounting policies

Revenue recognition

Match ticket revenue is recognised over the period of the English football
season. Sponsorship revenue is recognised over the duration of the sponsorship
contract. Merit awards are recognised when known at the end of the financial
period. Revenue derived from European fixtures is recognised when earned. Fixed
elements of broadcasting contracts are recognised over the football season and
facility fees are recognised when earned.

Intangible fixed assets

The costs associated with the acquisition of players' registrations are
capitalised as intangible fixed assets. These costs are fully amortised, in
equal annual instalments, over the period of the respective players' contracts.
Players' registrations are written down for impairment when the carrying amount
exceeds the amount recoverable through use or sale in the period.

Tangible fixed assets

Freehold buildings are depreciated so as to write off the cost on a straight
line basis over a period of 40 years.

Signing-on fees

Signing-on fees payable to players are charged evenly, as part of operating
expenses, to the profit and loss account over the period of the player's
contract.

3.         Profit and loss account analysis

The profit and loss account discloses the amortisation of player registrations
within operating profit in columnar format. Comparatives for the six months
ended 31 December 2001 and the year ended 30 June 2002, in a similar columnar
format, are set out in detail below.


                                               Operations   
                                            before player     Player
                                                  trading    trading     Total  
Six months ended 31 December                        £'000      £'000     £'000
2001                         

Turnover                                           38,269          -    38,269
Cost of sales                                      (9,431)         -    (9,431)

Gross profit                                       28,838          -    28,838
Administrative expenses                           (31,246)    (9,229)  (40,475)

Operating loss                                     (2,408)    (9,229)  (11,637)

Profit on disposal of player
registrations                                           -        178       178
                                                        

Loss before interest and                           (2,408)    (9,051)  (11,459)
tax                           


                                               Operations      
                                            before player     Player
                                                  trading    trading     Total
Year ended 30 June 2002                             £'000      £'000     £'000

Turnover                                           81,503          -    81,503
Cost of sales                                     (17,689)         -   (17,689)

Gross profit                                       63,814          -    63,814
Administrative expenses                           (71,744)   (20,576)  (92,320)

Operating loss                                     (7,930)   (20,576)  (28,506)

Profit on disposal of player
registrations                                           -        296       296

Loss before interest and                           (7,930)   (20,280)  (28,210)
tax                            


4.            Turnover

                                   Unaudited          Unaudited        Audited
                                  six months         six months           year
                                       ended              ended          ended
                                 31 December        31 December        30 June
                                        2002               2001           2002
                                       £'000              £'000          £'000

Gate receipts                          6,961              6,691         12,738
Television and broadcasting            9,674             12,890         34,176
Merchandising                          5,154              5,308          8,093
Travel                                 4,118              3,987          8,109
Other commercial income                8,742              9,393         18,387

                                      34,649             38,269         81,503


All turnover arises from continuing activities. Television and broadcasting
turnover for the year ended 30 June 2002 included revenue of £3,500,000 further
to the company's existing media rights partnership with British Sky Broadcasting
Group plc. There is no tax charge relating to this revenue.

5.         Administrative expenses

Administrative expenses include an additional £1,743,000 arising on the
settlement with David O'Leary.

6.         Tax on loss on ordinary activities

There was no tax charge in the current period or the comparative periods.

7.         Dividends

The directors do not recommend the payment of a dividend.

8.         Loss per share


                                           Unaudited      Unaudited    Audited
                                          six months     six months       year
                                               ended          ended      ended
                                         31 December    31 December    30 June
                                                2002           2001       2002

Basic loss per share
Loss for the period (£'000)                  (17,218)       (13,815)   (33,875)
Weighted average number of shares            347,589        347,589    347,589
('000)
Basic loss per share                           (4.95p)        (3.97p)    (9.75p)


Diluted loss per share.

FRS 14 Earnings Per Share requires presentation of diluted EPS when a company
could be called upon to issue shares that would decrease net profit or increase
net loss per share. For a loss making company with outstanding share options,
net loss per share would only be increased by the exercise of out-of-the-money
options. Since it seems inappropriate to assume that option holders would act
irrationally, and there are no other diluting future share issues, diluted EPS
has not been presented.

9.         Share capital and reserves

                                       Share     Profit
                         Share       premium   and loss Revaluation
                       capital       account    account     reserve      Total
                         £'000         £'000      £'000       £'000      £'000

At 1 July                3,476        47,557    (58,959)      9,320      1,394
2002
Loss for the                 -             -    (17,218)          -    (17,218)
period
Reserve                      -             -        133        (133)         -
transfer              

At 31 December           3,476        47,557    (76,044)      9,187    (15,824)
2002                   



The profit and loss account includes £30.1 million of goodwill previously
written off directly against reserves in accordance with the accounting
standards in force at the time.

10.            Reconciliation of operating loss to cash flow from operating
activities

                                           Unaudited      Unaudited    Audited
                                          six months     six months       year
                                               ended          ended      ended
                                         31 December    31 December    30 June
                                                2002           2001       2002
                                               £'000          £'000      £'000

Operating loss                               (18,899)       (11,637)   (28,506)
Depreciation of tangible fixed assets          1,071            909      1,896
Amortisation of intangible fixed               8,783          9,229     20,576
assets
(Profit)/loss on sale of tangible fixed          (20)             -          8
assets
Increase in stocks                              (605)          (255)      (977)
Increase in debtors                           (2,741)       (13,426)    (1,117)
Increase in creditors                          6,736          4,927      2,404

Net cash outflow from operating               (5,675)       (10,253)    (5,716)
activities                                 


11.           Analysis of net debt

                                  At                  Inception             At
                              1 July                 of finance    31 December
                                2002    Cash flow        leases           2002
                               £'000        £'000         £'000          £'000

Cash at bank and in hand      15,354      (11,698)            -          3,656
Debt due within one year     (12,113)       9,399             -         (2,714)
Debt due after one year      (80,452)       1,363             -        (79,089)
Finance leases                  (680)         148          (171)          (703)

Net debt                     (77,891)        (788)         (171)       (78,850)


12.   Subsequent events

The interim accounts do not contain any adjustment in respect of the termination
of the employment of Terry Venables. Terry Venables has a service agreement to
30 June 2004 with an annual salary of £2,000,000. The compensation payable upon
termination of the service agreement could be equivalent to twelve months'
notice.


In January 2003 the company completed the transfer of the following player
registrations which will have a material impact on the financial statements for
the year ending 30 June 2003: Robbie Fowler to Manchester City Football Club and
Jonathan Woodgate to Newcastle United Football Club. The transfer of Robbie
Fowler valued the player at £6,000,000, of which £3,000,000 is receivable within
the first twelve months and £3,000,000 is dependent upon the performance of the
player. The transfer of Jonathan Woodgate valued the player at £9,000,000, of
which £8,000,000 is receivable within the first twelve months and £1,000,000 is
dependent upon the performance of Newcastle United Football Club.



13. Report

Copies of this report are being sent to all shareholders. Further copies of this
report are available from the Company Secretary, Elland Road, Leeds, West
Yorkshire, LS11 0ES.





                      This information is provided by RNS
            The company news service from the London Stock Exchange                                                                            

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