Tuesday, 16 May 2017

Manchester United reveals £3.8m net loss for third quarter

Manchester United is predicting its annual revenue will hit record levels as the club bids to win the Europa League for the first time.
However, it recorded a pre-tax loss of £3.8m for the three months to 31 March - its third quarter.

The Premier League side, under the guidance of Jose Mourinho, face Ajax on 24 May, with the winner securing €6.5m (£5.6m) and a place in next season's Champions League - Europe's most lucrative club competition.

United would net €3.5m (£3m) should they lose the game but the club would also take a hit under its sponsorship contract with Adidas that applies penalties for failing to reach the Champions League.

United said its participation in the second-tier tournament, in the current season, had proved financially positive.

It raised its guidance for revenues in the year to June to between £560m and £570m - a rise of up to £30m on its previous estimated range.

In the third quarter, the club's operating expenses rose 27% to £129.8m, partly due to contracts offered to new signings including Paul Pogba and Zlatan Ibrahimovic.

United also hired a significant number of new non-playing staff members.
Net debt rose by £17.6m to £366.3m because of the strength of the dollar versus the pound in the wake of the UK's vote to leave the EU.

United executive vice-chairman, Ed Woodward, said: "We are forecasting better full-year financial performance than expected and as such have raised our revenue and profit guidance for the year.

"We look forward to a strong finish to 2016-17, both on and off the pitch."

In a conference call with investors, he said that United had made "tremendous progress on and off the pitch" under Mourinho, who took over as manager following the departure of Louis van Gaal last summer.

United won the League Cup in February but missed out on automatic qualification for the Champions League for 2017/18 as the club cannot finish in the top four Premier League places.

Its US-listed shares - down 4% over the past 12 months - were 0.3% down in early trading.

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