Struggling On The Pitch, Manchester United Profits Plunge

(RTTNews) - English football giants Manchester United Plc (MANU) turned to a loss for the fourth quarter compared to a profit last year, which was boosted by a significant tax credit.

The famous club, overtaken by hometown rival Manchester City and historic enemy Liverpool last season, also provided revenue guidance for the full-year 2015 that is projected to decline from fiscal 2014.

The latest quarter results were hurt by higher expenses due to higher player costs and a failed gamble on Sir Alex Ferguson's hand-picked successor David Moyes.

United spent more than 5 million pounds to sack Moyes and his staff following a dreadful campaign that saw the defending Premiership champions plunge to seventh place and out of the Champions League.

Man U on Wednesday reported loss attributable to owners of the parent of 5.83 million pounds or 3.56 pence per share for the fourth quarter, compared to profit of 106.10 million pounds or 64.80 pence per share in the prior-year quarter.

Excluding items, adjusted loss for the quarter was 6.32 million pounds or 3.85 pence, compared to 3.52 million pounds or 2.15 pence per share in the year-ago quarter.

Total revenues for the quarter grew 13.2 percent to 96.22 million pounds from 85.10 million pounds in the same quarter last year.

Commercial revenue increased 16.9 percent to 44.3 million pounds, with 45.8 percent rise in sponsorship revenue.

Broadcasting revenues surged 27.8 percent to 34.0 million pounds from the prior year, primarily due to increased revenue from the Premier League domestic and international rights agreements and increased UEFA Champions League revenue.

Matchday revenue declined 12.6 percent to 18.0 million pounds from last year, due primarily to playing one fewer home Premier League game and away domestic cup game as well as reduced matchday hospitality.

Tax credit for the quarter was 3.98 million pounds, sharply lower than 134.04 million pounds last year, which comprised the recognition of US deferred tax assets.

Operating expenses for the quarter surged to 102.82 million pounds from 83.29 million pounds a year ago, due primarily to higher player acquisition costs and improved contracts.

While the quarterly results were lackluster, United was in the green for the fiscal year, reporting revenue of 433 million pounds in the year to the end of June, and core profit of 130 million pounds.

However, looking ahead to fiscal 2015, Manchester United expects revenues between only 385 million pounds and 395 million pounds as the club missed out on the lucrative Champions League.

The club projects adjusted profits in the range of 90 million pounds to 95 million pounds.

Ed Woodward, Executive Vice Chairman commented, "We are very proud of the results achieved in fiscal year 2014 as we once again generated record revenues and EBITDA driven by our commercial and broadcasting businesses which delivered impressive year over year growth. We also recently announced a record breaking deal with adidas and very much look forward to launching this partnership next summer."

Manchester United in mid-July concluded the largest kit manufacturer sponsorship deal in sports with German sportswear maker Adidas AG (ADDDF, ADDYY) of 750 million pounds over 10 year with retail, e-commerce and licensing reverting to Manchester United from August 1, 2015. Adidas outbid rival Nike, Inc. (NKE) with the record offer.

MANU closed Tuesday's regular trading session at $15.56, down $$0.29 on a volume of 0.13 million shares. In the past 52-week period, the stock has been trading in a range of $14.26 to $19.97.