Louis van Gaal expected to take Manchester United back into Premier League top three this season

• Manager Louis van Gaal will be allowed to recommend new players despite spending £150million on talent over the summer
• Woodward's announcement came after the club revealed their financial results for 2013-14
• United reported a record annual revenue of £433.2m and profits of £23.8m
• But they expect a 10 per cent drop in revenue after failing to make the Champions League last season
• Former boss David Moyes and his staff were paid £5.2m in compensation after being sacked
• Annual wages have now pushed through the £200m mark after a 19 per cent rise 

Louis van Gaal is expected to take Manchester United back into the top three in the Premier League this season — and he will have to do it without any major signings in January.

The target was revealed by executive vice-chairman Ed Woodward as he detailed the club’s accounts for last season and made forecasts for this campaign.

Figures published show United had record income of £433.2million for the 2013-14 season, but that is expected to plunge to £395m because the club are not in the Champions League, from which they made about £55m last season.

Getting back into Europe is an urgent priority for United and Woodward confirmed Van Gaal’s target when he said: ‘We assume third in our budgets.’

Another consequence of David Moyes’ miserable year in charge was £5.2m in ‘exceptional costs’, most of which represented compensation payments to the former manager and his staff.

Woodward gave the strongest indication yet that there will not be a further splurge in January to follow the £153.1m spent on Angel Di Maria, Daley Blind, Ander Herrera, Luke Shaw, Marcos Rojo and Radamel Falcao. ‘We don’t intend to significantly increase capital expenditure [by buying players] in January,’ he said during a conference call aimed at investors in the 10 per cent of the club that is traded on the New York Stock Exchange.

‘We will continue to monitor in association with Louis his view of the squad and which areas we want to strengthen and which areas we want to sell. I wouldn’t have expectations for January but if there is a willingness from the manager, we will engage with him and if there is an opportunity, we will try and take that as we did last January.’

Woodward said the club was ‘very proud’ of the record income figures and added: ‘With Louis van Gaal at the helm as manager, and the recent signing of some of the world’s leading players to further strengthen our squad, we are very excited about the future and believe it’s the start of a new chapter in the club’s history.

‘Louis’ footballing philosophy fits very well with Manchester United and he has an impressive track record of success throughout his career, winning league titles with every club he has managed.’

One potentially worrying figure for United was their wage bill of £214.8m, up 19 per cent on the previous year.

United say salaries will drop in 2014-15 because there will be no Champions League bonuses, though they are not expected to fall by much.

United’s debts have fallen 12.2 per cent year-on-year but still stand at £341.8m — all a result of the Glazer family’s leveraged takeover in 2005. United spent £27.4m serving the debt in 2013-14, approximately the price of Luke Shaw. Critics of the Glazer family regularly cite the amounts spent on debt financing — now well over £500m — that might have been used to bring in more big-name players.

But the debt in itself does not endanger United’s future. They remain by a considerable margin England’s richest club by income. In global terms, only Real Madrid, Barcelona and Bayern Munich are at their level of half a billion euros of income or more per year.

The club’s revenue last season was split between match day income of £108.1m — effectively from ticket sales, pies, pints and programmes — at an average of £3.5m per game at Old Trafford; £189.3m from sponsorship, kit deals and other commercial partnerships; and broadcasting income of £135.8m.

Match day income is likely to remain stable. The other two streams are growing, respectively up 24.1 per cent (commercial) and 33 per cent (TV) year-on-year and are likely to increase significantly in the medium term.

The recently announced kit deal with adidas is worth £75m per year for 10 years from 2015-16, £50m more every year than the expiring Nike deal.

They can expect to pocket TV money of between £90m and £100m from the Premier League this season and next. That is likely to go up under the TV rights deals for 2016-19, which are due to be negotiated soon.

Champions League income for British clubs will also soar from next season because of BT Sport’s near £1bn deal to show all European football from 2015-16. Last season’s £36m UEFA cash for United could feasibly be double that or more by next season — as long as they are back at Europe’s top table.