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Careful, Naomi, I just meant that I had mentioned Manchester United in a proper business context in my message. Duncan _____ From: Economics, business, and related subjects [mailto:[log in to unmask]] On Behalf Of Naomi Birchall Sent: 20 May 2005 00:24 To: [log in to unmask] Subject: Re: Not the week for financial reporting Thanks, Duncan! Interesting reading! Naomi PS Genuine football link to what, exactly? -----Original Message----- From: Economics, business, and related subjects [mailto:[log in to unmask]]On Behalf Of Duncan Williamson Sent: 19 May 2005 22:27 To: [log in to unmask] Subject: Not the week for financial reporting Dear All, It’s not been the week for accurate financial reporting has it? Firstly, there was all the bru ha ha over the Manchester United share ownership proportions: several newspapers and the BBC web site reported that, having got to 75%+ ownership Glazer then needed to obtain 90% of the remaining shares that he didn’t own in order to be able to compulsorily buy out everyone else. That isn’t true as the cut off point is an absolute 90% ownership and then he can buy the lot … or the minority can ask to be bought out. Now there is the Royal Mail: £537 million profit announced; positive cash flow announced … my left cheek. I just happened to be preparing a session on executive pay and thought I’d see how Adam Crozier of the Royal Mail was earning his £2.2 million ears of corn when I found: The £537 million is operating profit before a whole string of things: such as exceptional items, pension deficit costs. Their profit after tax is £235 million, on sales of almost £9 billion and that’s a profit margin of 2.6% I am unable to find any positive cash flow at all: the figure they report as £107 million (positive) cash flow is before the use of liquid resources and financing and before Post Office client balance movement. Without those two adjustments, the cash flow at that point is MINUS £304 million and their final cash flow result for the year is MINUS £159 million … they borrowed £325 million in the year to help prop it up. I can’t see how anyone is getting away with any of this headline nonsense but they are. This is nothing new, either, I’m afraid; and executives and others have been rewarded on the strength of such adjustments for years. We’ve had the fat cat debate before, of course; but since they have paid the thin cats at the Royal Mail as well this year that puts a different complexion on it: a total of £218 million paid out in what they call Success Costs to all those plucky Postman Pats: good for them. Thought you might be interested and the football link was a genuine one this time! Duncan Williamson