By Scott Kanowsky
Investing.com — Manchester United Ltd. (NYSE:) has posted a deeper annual loss and warned that its next quarterly results will be hit by recent match postponements.
The English soccer giant reported a net loss of £115.5M for the twelve months to the end of June, widening by 25.3% from a prior decline of £92.2M. It blamed the slide on the absence of a key summer tour in July 2021, increased utility costs, and the impact of a recent weakening in the that all combined to offset a return of fans to stadiums, following the lifting of pandemic restrictions.
Manchester United added that its operating loss, which it has previously pointed to as a good measure of the effect of the COVID crisis on its performance, deepened by 136.9% to £87.4M.
Broadcasting sales, a major source of funding for England’s elite soccer teams, also dipped by 15.7% to £214.9M due to Manchester United playing twenty-two fewer games across all competitions in the 2021-2022 season. However, this decline was balanced out by a post-COVID resurgence in matchday revenue, as well as an uptick in sponsorship and retail sales. Total full-year revenue rose by 18% to £583.2M.
Net debt, long a complaint of disgruntled fans since the leveraged buyout of Manchester United by the billionaire Glazer family in 2005, expanded by more than a fifth to £514.9M after falling last year.
The results come as the New York-listed company is spending heavily on attracting new on-field talent, in a bid to help the men’s team return to the top of England’s Premier League following a disappointing sixth place finish in its previous campaign. Manchester United’s full-year wage bill – its largest expense – grew by 19.1% to a Premier League record of £384.2M.
“Our financial results for fiscal 2022 reflect a recovery from the pandemic, a full return of fans and new commercial partnerships offset by increased investment in the playing squad,” said chief financial officer Cliff Baty in a statement.
Even though the club will play in a lucrative European competition this season – albeit in the second-tier Europa League – Manchester United said it expects muted revenue in its 2023 financial year of between £580M – £600M. Adjusted core earnings are also seen at £100M – £110M because of high player salaries.
Baty flagged that its upcoming quarterly results “will be impacted” by the delay of two matches after the passing of Queen Elizabeth II and the unusual timing of the 2022 FIFA World Cup in Qatar, which is set to begin in November and last until late December. The Premier League will go on a break during that period to accommodate the tournament.