Gains in the commercial and matchday revenues have written off a 23.1% fall in the broadcasting revenues as Manchester United has reported a symbolic 0.3% gain in the overall revenues for the first quarter (July to September) in the current fiscal.
The Premier League club has released its first quarter-financial results yesterday (Monday). With the operating profit falling by 20.9% to £11 million, the basic earning on the club’s each share has plummeted to £ 0.69 – a massive 83.3% fall over £ 6.6 value for the corresponding period last year.
MANCHESTER UNITED KEY FINANCIALS (Unaudited)
|Earnings in £ million (except earnings per share)||Three months ended
|Match day revenue||22.1||16.3||35.6%|
|Profit for the period (i.e. net income)||1.1||6.6||-83.3%|
|Basic earnings per share (pence)||0.69||4.04||-82.9%|
|Adjusted profit for the period (i.e. adjusted net income))||3.9||7.0||-44.3%|
|Adjusted basic earnings per share (pence)(1)||2.35||4.27||-45.0%|
The broadcast revenue has been reported at £9.9 million, down from £32.9 million last year. The sponsorship revenue has gained 8.1% to reach the £53.6 million on the back several new deals with the likes of Visit Malta, Lego, Konami and Yabo Sport.
The club is forecasting total revenue for the year between £560 million and £580 million. There is going to be a considerable deficit in the £627.1 million reported last year.
“We have a clear vision in terms of football philosophy and recruitment. The significant investments that we have made in recent years in areas such as transfers, recruitment infrastructure, analytics, and our Academy are already beginning to bear fruit. We are very proud to be shortly approaching a milestone 4,000th game featuring an Academy player, and we are particularly optimistic regarding the considerable young talent currently coming through. Our ultimate goal is to win trophies by playing exciting football with a team that fuses graduates from our Academy with world-class acquisitions,” says Manchester United Executive Vice-Chairman Ed Woodward.
Sponsorship revenue was £53.6 million, an increase of £4.0 million, or 8.1%, over the prior-year quarter, primarily due to new sponsorship deals and additional tour revenue.
Retail, Merchandising, Apparel & Product Licensing revenue was £26.8 million, an increase of £0.5 million, or 1.9%, over the prior-year quarter.
Broadcasting revenue for the quarter was £32.9 million, a decrease of £9.9 million, or 23.1%, over the prior-year quarter, primarily due to non-participation in the UEFA Champions League. Guaranteed UEFA broadcasting revenues are typically recognized evenly over the course of the competition’s group stages. The majority of the full-year revenue impact of non-participation in the UEFA Champions League will, therefore, occur in Q2, when 5 of the 6 group matches will be played.
Matchday revenue for the quarter was £22.1 million, an increase of £5.8 million, or 35.6%, over the prior-year quarter, primarily due to playing two additional home games in the quarter.
The total operating expenses for the quarter were £136.4 million, a decrease of £7.1 million, or 4.9%, over the prior-year quarter.
Employee benefit expenses for the quarter were £70.2 million, a decrease of £6.8 million, or 8.8%, over the prior-year quarter, primarily due to reductions in player salaries as a result of non-participation in the UEFA Champions League.
Other operating expenses for the quarter were £30.4 million, an increase of £1.8 million, or 6.3%, over the prior-year quarter. Whereas the depreciation for the quarter was reported at £3.6 million, an increase of £0.8 million, or 28.6%, over the prior-year quarter. Amortization for the quarter was £ 32.2 million, a decrease of £2.9 million, or 8.3%, over the prior-year quarter. The unamortized balance of registrations on 30 September 2019 was £ 356.4 million.
Net finance costs for the quarter were £8.5 million, compared to £5.2 million in the prior-year quarter. The increase was largely due to unrealized foreign exchange losses on unhedged USD borrowings.