Bloomberg News

Manchester United Loss Narrows as Annual Sales Reach Record (1)

September 18, 2013

Manchester United Plc (MANU:US) said its fourth-quarter loss narrowed as the soccer team earned more from sponsorship on the way to a record-extending 20th English league title. Annual revenue rose 13 percent to a record 363.2 million pounds ($580 million).

The net loss was 2.7 million pounds, or 2 pence per share, for the three months to June 30, after a 10.6 million-pound loss, or 7 pence a share, in the year-earlier period, the company said in a statement. Net income before adjustments, which included tax charges from before last year’s initial public offering, was 106 million pounds, compared with a 14.9 million-pound loss.

Revenue rose 14 percent in the quarter to 85.1 million pounds as United continued a “scalpel not a spade approach” to mining territories for sponsors, Executive Vice-Chairman Ed Woodward said in a conference call with analysts.

“Our commercial business continues to be a very powerful engine of growth, enabling the team to continue to be successful,” Woodward said in a statement.

Sponsorship sales rose 49 percent for the quarter to 21.3 million pounds. Retail and licensing sales increased by 22 percent to 10.5 million pounds, and so-called matchday revenue increased by 9 percent compared with the year-earlier period when United finished the season without a trophy for the first time since 2005.

In the quarter, United signed sponsorship agreements with the Bank for Investment & Development of Vietnam and Japanese mobile-game designer Gloops Inc.

Nike Deal

United, which is in talks about improving its agreement with apparel supplier Nike Inc. (NKE:US), expects revenue to be between 420 million pounds and 430 million pounds for fiscal 2014, based on finishing third in the Premier League and reaching the Champions League and domestic Cup quarterfinals.

United, which raised $233 million in the August 2012 IPO in the U.S., doesn’t have any immediate plans for further share sales, Woodward said, after United made a so-called “shelf” filing that says it may seek to raise $400 million at some point in the future.

United shares were up 0.7 percent at $17.23 at 10:32 a.m. in New York.

Gross debt at United, which was bought in a leveraged takeover by the U.S.-based Glazer family in 2005, declined 11 percent to 389.2 million pounds over the year. Adjusted annual net income was 17.2 million pounds, up from 4.5 million.

Champions League

United coach David Moyes’s team had a 4-2 home win over Bayer Leverkusen in its opening game of the Champions League yesterday, and is fifth in the Premier League with seven points from four games, three behind leader Liverpool. Moyes replaced Alex Ferguson, who retired in May having led the club to 38 trophies in 26 years.

Under Moyes, United signed Everton midfielder Marouane Fellaini and defender Guillermo Varela from Penarol in the offseason, adding fewer recruits than Premier League competitors such as Manchester City and Chelsea. United rejected offers from Chelsea for striker Wayne Rooney.

United has “not just a strong but a deep squad,” Woodward, a former JPMorgan Chase & Co. banker, told analysts.

To contact the reporter on this story: Alex Duff in Madrid at aduff4@bloomberg.net

To contact the editor responsible for this story: Christopher Elser at celser@bloomberg.net


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Companies Mentioned

  • MANU
    (Manchester United Plc)
    • $15.68 USD
    • 0.18
    • 1.15%
  • NKE
    (NIKE Inc)
    • $94.5 USD
    • 1.29
    • 1.37%
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