Man Utd suffers third quarter revenue decline and deeper losses

Manchester United experienced a fall in third quarter revenues, and deeper losses, it revealed today (July 10).

Publishing its results to March 31, 2024, it revealed total revenues fell 19.6% to £136m, down from £170m at the same point the previous year.

A pre-tax loss of £83.569m was compared with a pre-tax loss of just £5.679m a year ago, reflecting the Red Devils’ early exit from European competition.

The figures follow record second quarter results, published in March this year, that showed a 34.9% surge in revenues of £225.756m. A £27.219m unaudited pre-tax profit in the second quarter helped reduce six monthly losses from £25.115m in 2022, to a pre-tax loss of £5.585m in the final six months of 2023, the figures showed.

Today’s figures reveal that the club has revised its forecasts slightly down for the 2024 financial year, although they will still be a record.

It said it now expects approximate full year revenues of a record £660m, in line with the previous guidance range of £635m to £665m.

Adjusted EBITDA for the full fiscal year 2024 is expected to be approximately £140m, in line with previously provided guidance range of £125m to £150m.

Exceptional items for the quarter period revealed a cost of £30.3m in relation to the sale of 27.7% of the group’s voting rights to Trawlers Limited, the entity wholly owned by Sir Jim Ratcliffe who recently acquired a stake in the club.

In a breakdown of total revenues, the club achieved £69.6m from commercial interests, an increase of £0.2 million, or 0.3%, over the prior year quarter.

Sponsorship revenue was £40.7m, a decrease of £0.3m, or 0.7%.

Retail, Merchandising, Apparel & Product Licensing revenue was £28.9m, an increase of £0.5m, or 1.8%, over the prior year quarter, due to the extension of othe club’s agreement with adidas, partially offset by lower Megastore sales resulting from fewer matches being played at Old Trafford in the quarter.

Broadcasting revenue for the quarter was £37.5m, a decrease of £13.2m, or 26%, due to the men’s first team playing in fewer matches in the quarter, in both continental and domestic competitions.

Matchday revenue for the quarter was £29.6m, a decrease of £20.3m, or 40.7%, due to playing nine fewer home matches in the current year quarter.

Total operating expenses for the quarter rose by £27m to £203.7m, and employee benefit expenses, mainly players’ wages, were £91.2m, an increase of £6.2m, or 7.3%, primarily due to investment in the first team playing squad.

Net finance costs for the quarter were £17.3m, compared with £1m in the prior year quarter. The movement was driven by an unfavourable swing in foreign exchange rates in the current quarter, compared with a favourable swing in foreign exchange rates in the prior year quarter.

The club’s US Dollar non-current borrowings as of March 31, 2024 were $650m, which was unchanged from a year ago.

As a result of the year-on-year change in the USD/GBP exchange rate from 1.2369 at March 31, 2023 to 1.2632 at March 31, 2024, the non-current borrowings, when converted to GB Pounds were £511.3m, compared with £521.5m the previous year.

In addition to non-current borrowings, the Group maintains a revolving credit facility which varies based on seasonal flow of funds. Current borrowings at March 31, 2024, were £143m compared with £203.7m the prior year.

As of March 31, 2024, cash and cash equivalents were £67m compared with £73.7m a year ago.

On July 3, the club announced it would be commencing a proposed redundancy programme, which could reduce headcount by approximately 250 jobs.