Manchester United reports falls in first quarter revenues and profits

Manchester United has seen its revenues and profits for the first quarter tumble, compared with the same period last year.

But executive chairman Ed Woodward said the business is on track to deliver on  record full-year revenues.

The Old Trafford giant revealed its figures for the quarter to September 30, which showed a 6.1% fall in total revenues of £135m.

Adjusted EBITDA of £29.4m was 25.2% below the previous year, and the £13.9m operating profit level was a 22.3% decline on the same period last year.

However, the club said, during the first quarter, it had successfully launched a partnership with Kohler, achieving more than 1 billion social and editorial impressions worldwide, it had announced a global partnership with denim brand True Religion, and renewed two global partnerships with Canon Medical Systems and Deezer.

Executive vice chairman, Ed Woodward, said: “Our financial strength enables us to continue to attract and retain top players and to invest in our academy, as we look to drive the success on the pitch that the club and our fans expect.

“We remain on track to deliver our record full-year revenue guidance, underpinning our long-term, strategic plan to create sustainable growth across all areas of the club.”

Commercial revenue for the quarter was £75.9m, a decrease of £4.6m, or 5.7%, over the prior year quarter, the club revealed.

Sponsorship revenue for the quarter of £49.6, was a decrease of £3.6m, or 6.8%, primarily due to a smaller Summer tour.

Retail, merchandising, clothing and product licensing revenue for the quarter was £26.3m, a decrease of £1m, or 3.7%, mainly due to playing two fewer home games across all competitions.

Broadcasting revenue for the quarter was £42.8m, an increase of £2m, or 4.9%.

Matchday revenue for the quarter was £16.3m, a decrease of £6.1m, or 27.2%, which the club explained was due to playing two fewer home games across all competitions.

Total operating expenses for the quarter were £143.5m, an increase of £400,000, or 0.3%.

Wages for the quarter were £77m, an increase of £7.1m, or 10.2%, due to investment in the first team squad.

Other operating expenses for the quarter were £28.6m, a decrease of £5.9m, or 17.1%, linked to the smaller Summer tour.

The club also revealed that net finance costs for the quarter were £5.2m, an increase of £4.4m, or 550.0%, due to unrealised foreign exchange losses on unhedged US Dollar borrowings, compared with gains in the prior year quarter.

Net cash generated from operating activities for the quarter was £114.8m, an increase of £96.9m, primarily due to the timing of sponsorship payments.

Net Debt, as of September 30, 2018, was £247.2m, a decrease of £20.9m over the year. The gross US Dollar debt principal remains unchanged.