By Paul Nicholson
November 15 – It was a mixed bag of emotions amongst Europe’s elite clubs this week as both Bayern Munich and Manchester United announced club record financial results.
Bayern president Uli Hoeness broke down in tears as 4,000 fans chanted his name as the club announced breaking through the €400 million revenue mark for the first time.
Hoeness is facing tax fraud charges of his own over an undeclared Swiss bank account – the case goes to court in Bavaria in March next year. Meanwhile the Bayern fans and the board have given him their full support.
Hoeness said he had made a big mistake but “I hope this story has a good ending in March. If I am then still allowed to be here then I promise you I will serve this club until the day I stop breathing.”
Tears of a more frustrating kind were likely shed in Manchester United’s boardroom (at least by those that understand the finance), as the club announced a new revenue high of £98.5m ($157.9m) for the three months up to 30 September 2013, up from £76.3m ($122.3m) in the same period in 2012, but one firm of US analysts, Zachs Investment Research, named the United stock as the Bear of the Day.
The Bayern results again showed the importance of winning to the revenue line. The German treble-winners announced turnover at €393 million, up from €332 million in 2011-12. When turnover for the Allianz Arena Stadium Ltd was taken into account, the revenue figure was boosted to €432.8 million.
Manchester United were similarly breaking records with a 29% increase in their revenue for the first quarter of the financial year. Commercial revenue rose by 39% to £59.9 million with broadcast revenue increasing by 41% to £19.3 million. United reported a loss of £293,000 ($469, 980) compared to a profit of £20.5m ($32.88m) in 2012.
United’s relatively new executive vice chairman, Ed Woodward, was typically bullish saying that you can expect more from broadcast content license fees going forward and that “our unique approach to the commercial business will continue to drive future growth.”
Unique or not, his bullishness was matched by a bearish response from the US stock market analysts with Zachs in particular sceptical of what it believes is a failure to hit expected targets. Zachs reckons the club missed each of the last three quarters, reporting earnings that it would have expected to see on its own ‘Zacks Consensus Estimate’.
But Zachs say there should be plenty of people out their willing to but the stock.
“For the better part of the last year, the stock has been stuck in a range of $16 to $18 with a few periods of peaks and valleys. The rabid fan base may be more than willing to buy the stock should they see a dramatic decline in share price. With estimates sinking and a big valuation to support investors might be wise to look elsewhere to get their kicks,” said Zachs in an article on seekingalpha.com.
More from Matt Scott on Monday in his Money Talks column on Insideworldfootball.
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