Manchester United posts first quarter revenues rise and fall in pre-tax losses

Manchester United's Old Trafford stadium
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Manchester United increased revenues and decreased pre-tax losses in its first quarter reporting period, ended September, 30, 2021.

Revenues increased from £108.972m at the same point last year to £126.461m, while a pre-tax loss of £19.82m was better than the pre-tax loss of £27.075m a year ago.

The revenue split was as follows:

Commercial revenue for the quarter was £64.4m, an increase of £4.7m, or 7.9%, over the prior year quarter.

Sponsorship revenue was £36.3m, a decrease of £0.2m, or 0.5%, over the prior year quarter.

Retail, merchandising, apparel and product licensing revenue was £28.1m, an increase of £4.9m, or 21.1%, over the prior year quarter, primarily due to increased Megastore footfall as a result of home games being played in front of a full capacity crowd, combined with the impact of new player signings.

In the prior year quarter all home games were played behind closed doors.

Broadcasting revenue for the quarter was £43.3m, a decrease of £4.3m, or 9.0%, over the prior year quarter, primarily due to playing four fewer home and away games across domestic competitions, due to the completion of the 2019/20 Premier League and FA Cup competitions during the prior year quarter.

This is partially offset by the impact of playing two UEFA Champions League games in the current quarter compared with three UEFA Europa League games in the prior year quarter, relating to completion of the 2019/20 UEFA competition.

Matchday revenue for the quarter was £18.8m, an increase of £17.1m, or 1005.9%, over the prior year quarter, due to all five home games being played in front of a full capacity crowd. All five home games in the prior year quarter were played behind closed doors.

Wage costs rose during the quarter to £88.5m, an increase of £16.6m, or 23.1%, due to investment in the first team playing squad.

Net debt, as of September 30, 2021, was £439.7m, compared with £440.6m at the same point a year ago. As of September 30, 2021, the company had undrawn credit facilities of £140.0m.

A semi-annual cash dividend of $0.09 per share will be paid on January 7, 2022.

In what is likely to be his last results presentation before leaving the club, executive vice chairman Ed Woodward, said: “While these financial results today demonstrate our resilience through the pandemic, our top priority is success on the pitch.

“The manager, players and everyone at the club are determined to achieve that objective.”

Ed Woodward – (image courtesy MUFC)

Mr Woodward announced his departure in April, following the club’s involvement in the ill-fated European Super League which drew vitriolic criticism from fans.

Club owners, the Glazer family, also vowed to improve links with fans, following the ESL debacle, including making shares available to purchase.

Earlier this week the club said it was close to finalising details of the scheme, with one source claiming an initial tranche issued to fans could be in the region of $10m.

Further, possibly larger, tranches could be issued in future, depending on demand.

Details of the fan ownership scheme could be agreed before the end of the year, and will then be subject to a ballot of Manchester United Supporters Trust members.

However, Lord Jim O’Neill, vice chair of the Northern Powerhouse Partnership and a critic of Manchester United’s current share structure, said the proposed fan ownership scheme “seems a very minimalist token gesture”.

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