LONDON: Manchester United Ltd. said revenue improved in its June quarter despite reporting a wider loss, while the company gave a soft revenue forecast for its newly-started fiscal year.
Manchester United, which controls the British soccer team of the same name, said it expects revenue of GBP500 million to GBP510 million for its fiscal year ending next June. Analysts polled by Thomson Reuters had recently forecast GBP517 million in revenue.
Manchester United’s financial results have been recently hit by its seventh-place finish in the English Premier League in the 2013-2014 campaign, which disqualified the team from the Union of European Football Associations’, or UEFA, Champions League–Europe’s top club competition–for the first time since the mid-1990s. As a result, the company lost out on broadcasting and matchday revenue.
In the 2014-15 season, Manchester United managed a fourth-place finish and is now set to return to the Champions League next season.
In the quarter ended June 30, Manchester United’s revenue rose to GBP105.8 million from GBP96.3 million a year earlier.
Broadcasting revenue rose 20% to GBP40.8 million, due to an increase in merit payments and one more Premier League home game.
Matchday revenue rose 6.1% to GBP19.1 million due to the additional home game, partially offset by its nonparticipation in UEFA competitions.
Commercial revenue, which accounted for 43% of Manchester’s overall revenue in the quarter, grew 3.6% to GBP45.9 million, as a jump in sponsorship revenue, helped offset declines in retail licensing and mobile revenues. The club signed a deal with Adidas in the summer.
Despite the revenue growth, the quarter included a sharp increase in net finance costs, which grew to GBP17 million from GBP6 million a year ago as the company repurchased some senior notes and refinanced. Those costs helped drive Manchester United’s loss in the quarter to GBP7.2 million from GBP5.8 million a year earlier.
Adjusted for special items, Manchester posted a per-share profit of 68 pence, compared with a per-share loss of GBP3.85 a year ago.
Shares, inactive premarket, have gained 16% this year through Wednesday’s close.
Separately, Manchester United on Thursday filed to sell up to $400 million in securities, with shareholders selling an additional $427 million in shares.
