Man Utd lowers 2024 financial forecasts due to early Champions League exit

Manchester United FC has lowered 2024 financial forecasts, due to the club’s early Champions League exit.

Today, it reported better revenues and slightly lower pre-tax losses in its first quarter period, ending September 30, 2023.

Total revenues for the period were £157.1m, up from £143.7m, while a pre-tax loss for the period of £32.804m was slightly lower than the £34.370m level the same time last year.

Current borrowings as of September 30, 2023 were $650m, which was unchanged from September 30, 2022.

But the club stated: “For fiscal year 2024, the company is forecasting revenue guidance to be within a range of £635m to £665m from prior guidance of £650m to £680m and adjusted EBITDA guidance to be within a range of £125m to £150m from prior guidance of £140m to £165m, owing to the early Champions League exit and related reduction in Broadcasting revenues.”

During the quarter, commercial revenue for the quarter was £90.4m, an increase of £3m, or 3.4%, over the prior year quarter.

Sponsorship revenue was £56.2m, a decrease of £1.6m, or 2.8%, over the same quarter last year.

Retail, Merchandising, Apparel & Product Licensing revenue was £34.2m, an increase of £4.6m, or 15.5%, over the prior year quarter, primarily due to the extension of the club’s partnership with adidas until the end of the 2034/35 season and strong Megastore performance.

Broadcasting revenue for the quarter was £39.3m, an increase of £4.3m, or 12.3%, over the prior year quarter, primarily due to the men’s first team participating in the UEFA Champions League compared with the UEFA Europa League in the prior year quarter, as well as increased income from the Premier League.

Matchday revenue for the quarter was £27.4m, an increase of £6.1m, or 28.6%, over the prior year quarter, primarily due to playing one more home game in the current year quarter, compared to the prior year quarter.

Total operating expenses for the quarter were £184.7m, an increase of £21m, or 12.8%.

Employee benefit expenses, including players’ wages, for the quarter were £90.3m, an increase of £8m, or 9.7%, mainly due to the men’s first team participating in the UEFA Champions League in the current year, in addition to investment in the first team playing squad.

Profit on disposal of intangible assets for the quarter was £29.5m, an increase of £12.9m, or 77.7%, due to the disposals of Elanga, Fred and Henderson.

Net finance costs for the quarter were £34.7m, compared with £31m, mainly due to an unfavorable swing in foreign exchange rates resulting in unrealised foreign exchange losses on unhedged US Dollar borrowings.

Overall cash and cash equivalents – including the effects of exchange rate movements – increased by £5.7m in the quarter to September 30, 2023 compared with the cash position at June 30, 2023.

Net cash inflow from operating activities for the quarter was £21.5m, compared with net cash outflow of £6m in the prior year quarter.

Net capital expenditure on property, plant and equipment for the quarter was £9.1m, an increase of £4.7m over the prior year quarter, due to expenditure relating to training facilities for the Academy and Women’s teams

Net capital expenditure on intangible assets for the quarter was £106.5m, an increase of £18.2m, due to increased investment in the first team playing squad.

Net cash inflow from financing activities for the quarter was £99.8m, compared with a net cash outflow of £0.9m in the prior year quarter, due to a drawdown of £100m on the club’s revolving facilities.

In addition to non-current borrowings, the group maintains a revolving credit facility which varies based on seasonal flow of funds. Current borrowings at September 30, 2023 were £204.4m compared with £102.9m at September 30, 2022.

As of September 30, 2023, cash and cash equivalents were £80.8m compared with £24.3m at the prior year quarter.

Shares in the club fell 0.09% to $21.20 following publication of the results.