By David Owen
September 12 – The impact of a new kit deal with Adidas combined with reduced finance costs as a consequence of a refinancing of the club’s sizeable debt have triggered a turnaround in Manchester United’s financial fortunes. The Old Trafford club today kicked off the 2015-16 Premier League full-year financial reporting season by unveiling a pre-tax profit of £48.8 million for the year to June 30. This compared with a prior-year loss of £3.6 million.
In figures released some 48 hours after the club, now managed by José Mourinho, suffered a derby day defeat to local rivals Manchester City, United announced record revenue of £515.3 million and record operating profit of £68.9 million. Total operating expenses climbed 12.8% to £436.6 million, with employee benefit expenses rising 14.6% to £232.2 million.
Looking ahead, Ed Woodward, executive vice chairman, said the club was “on target to achieve record revenues in 2017, even without a contribution from the Champions League”. United’s adjusted EBITDA forecast for 2016-17 of £170-£180 million – versus a record £191.9 million in the year just ended – appears to imply though that the lack of involvement in Europe’s top club competition, combined with the cost of high-profile arrivals such as Mourinho himself, Paul Pogba and Zlatan Ibrahimovic, are expected to impact margins.
Commercial revenue for 2015-16 reached £268.3 million, up 36.3%, with retail, merchandising, apparel and product licensing revenue surging more than 200% to £97.3 million, “primarily due to the commencement of the new agreement with Adidas from 1 August 2015”.
Broadcasting revenue climbed 30.4% to £140.4 million, while match-day revenue was up 17.7% at £106.6 million.
Net finance costs declined substantially from £35.2 million to £20.0 million; net debt though stood at £260.9 million on 30 June 2016, an increase of £5.7 million from a year earlier.
Exceptional costs of £15.1 million were recorded for 2015-16, of which £8.4 million were said to relate to “compensation to the former manager [Louis van Gaal] and certain members of the coaching staff for loss of office”, with a further £6.7 million related to “a registrations’ impairment charge regarding a reduction in the carrying value of a player no longer considered to be a member of the first team playing squad”.
Contact the writer of this story at moc.l1713269389labto1713269389ofdlr1713269389owedi1713269389dsni@1713269389newo.1713269389divad1713269389