Newcastle score big profits

Chairman Freddy Shepherd has said that that premier league Newcastle United would not get carried away after a strong run in the Champions League contributed to a major jump in profits in the first half of the financial year.

Newcastle's profits before interest and tax rose to stg£11.5 million in the six months to January 31, from stg£1.4 million in the comparative period last year, on turnover up 57% to stg£56.2 million.

The results reflect Newcastle's progress to the second stage of Europe's most lucrative club competition, combined with fine performances in the premier league, which have lifted them into third place. This helped television revenues more than double to stg£21.5 million, a statement on Monday showed.

But Newcastle would not repeat the mistakes of Leeds United, Shepherd said. Leeds suffered a public fall from grace after reaching the semi-finals of the Champions League two years ago. The Yorkshire club, now dangerously close to the relegation zone, borrowed heavily in their bid for continued success in Europe, but the victories failed to materialise and Leeds later had to sell key players to pay off their debts.

"Every supporter wants success. Leeds tried to carry it off and they relied on the Champions League. Unfortunately, they didn't get into the Champions League, and they bombed out of Europe, so it didn't work for them," Shepherd told Reuters.

"So you've got to be able to get things right. Our wages are under 50% of turnover and that is what we are gearing to in the future. We aren't budgeting on the Champions League and we're not getting carried away," he said. Leeds' wages rose to over two-thirds of turnover after buying players like defender Rio Ferdinand and striker Robbie Fowler.

Leeds also borrowed money specifically for new players, whereas much of Newcastle's borrowing has been invested in their 52,000-capacity St James' Park stadium, the second-biggest in the country after Manchester United's Old Trafford.

Newcastle's high attendances and three additional home games pushed match revenues up 41% to stg22.3 million during the six-month period.

Shepherd said manager Bobby Robson had been a major influence in the club's improved financial position, not only by getting good performances on the pitch, but also by bringing stability to the club. Costs are also kept down by retaining a 28-strong squad compared to 44 under previous manager Ruud Gullit of mostly young players on long-term contracts.

The club's wages-to turnover-ratio remained below 50 percent the benchmark point, according to accountants Deloitte and Touche Sport despite a 47% increase in wages and salaries to stg22.9 million.

The chairman was cautiously optimistic about Newcastle's prospects of winning the league this season. Currently on 61 points, they are five points adrift of leaders Arsenal and two behind second-placed Manchester United, with seven games left.

However, Newcastle have a chance to capitalise when United travel to St James' Park next month. Arsenal and United have yet to play each other at the former's home ground of Highbury.

"It's a three-horse race, and the two horses in front keep looking behind at us and they can't afford to falter," Shepherd said.