Cost of bond issue leaves United in the red
RED Football Joint Venture, the parent company of Manchester United Football Club, declared a pre-tax loss of £108.9m in the year to June 30, compared with a profit of £21.5m in the prior year.
Accounts for the company, which have just been filed at Companies House, show that the company’s bottom line was hit by the £64.3m costs of arranging last year’s £526m bond issue, which allowed it to repay loan notes that were owed by the club.
The costs were mainly incurred through losses on interest rate swaps held against the loan notes. The company also paid out £30.2m in interest on payment-in-kind notes, which have since been repaid by the club’s owners, the Florida-based Glazer family.
Meanwhile, the profit figure achieved in 2009 also benefited from the £80m sale of Cristiano Ronaldo to Spanish club Real Madrid, whereas the club made no significant player sales during the 2010 financial year.
As previously reported, the group’s turnover increased during the year to £286.4m (2009: £278.5m). Red Football Joint Venture also finished the year with net debt of £590.4m (£566.1m).
