Wage costs at Man Utd surge above £300m, as profit edges ahead 

Man Utd3

By David Owen

September 24 – Manchester United have got the 2018-19 Premier League financial results season off to a restrained start, reporting a modest increase in annual profit for the year to end-June. The Old Trafford club, already struggling this season to find an on-pitch rhythm under former striker-turned-manager Ole Gunnar Solskjaer, posted a pre-tax figure of £27.5 million for 2018-19, up from a restated £25.8 million the previous year.

That would have been enough to put them only in eighth place in the 2017-18 Premier League profits table, just behind now relegated Huddersfield Town. However, with earnings around the division likely to be somewhat lower this time around, United might conceivably end up among the six or so most profitable Premier League clubs for 2018-19.

Revenue broke through the £600 million barrier, at £627.1 million, up from just under £590 million. Broadcasting revenue was well up at £241.2 million, but matchday revenue was broadly flat. Meanwhile, the famed United commercial revenue machine continues to idle, contributing revenue of £275.1 million – still a level that most rivals could only dream of emulating – down from £275.8 million.

Operating expenses, like revenue, exceeded £600 million, at £602.9 million, while employee benefit expenses surged beyond £300 million to £332.3 million, a year-on-year increase of over 12%.

The club posted a profit on the disposal of intangible assets (accountant-speak for players) of £25.8 million. Those who left the Theatre of Dreams during the period included Marouane Fellaini and Daley Blind. Net capital expenditure on, again, intangible assets over the year weighed in at a hefty £135.2 million, however. The cash flow statement showed £178.2 million of payments for said intangible assets, offset by fractionally under £43 million of proceeds.

Scrutiny of the balance-sheet indicated borrowings of just over £511 million, with the club again emphasising that the gross US dollar debt principal remained unchanged. Net debt fell by about £50 million to £203.6 million, mainly due to increased cash. There was a £4.4 million hike to £22.5 million in net finance costs. This was attributed to “unrealised foreign exchange losses on unhedged US dollar borrowings”.

Two semi-annual dividends of nine US cents a share were paid, once again, during the year.

With the club missing out on Champions League football, revenue for the current season is expected to fall to between £560 million and £580 million. Adjusted ebitda, a measure of profitability, is projected at between £155 million and £165 million. Adjusted ebitda for 2018-19 was £185.8 million.

Ed Woodward, executive vice chairman, said all at the club were “committed to delivering on our primary objective of winning trophies”.

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