By Mark Baber
June 4 – Manchester United shares are getting positive recommendations from stock tippers with the club generating increased revenue from television and merchandising and having reduced interest payments on its longer term debts. This is despite an expected loss of $1.50 per share for the quarter.
Writing in MSN money Matthew Kanterman flags Manchester United as one of his top stocks (http://money.msn.com/top-stocks/post.aspx?post=41ded34d-b2ae-4425-a8d4-f0afbddec7fd).
Manchester United first fiscal year as a publicly traded company in the US ends June 13 and the company is expected to report earnings per share of $22.94. But the real excitement for stockholders is not for the 2013 results, but the forecast for fiscal 2014 of a healthy $45.56 earnings per share.
The boost will largely come from the new television deal between the Premier League and BSkyB and BT, which is worth 70% more than was the case in 2012-13.
In addition, Nike still has to renegotiate its kit supplier deal with the club by July 31. Deutsche Bank is predicting the new deal will be worth £45m a year, 77% more than the current deal.
Finally the club, loaded with debt from the original acquisition by the Glazer family and which was carried into last year’s IPO, has reduced its interest repayments by £15 million a year by switching to significantly lower interest rates – itself an indicator of the confidence the bans have in Manchester United as a business.
The one fly in the ointment (or glimmer of hope depending on your point of view), may be doubts over whether David Moyes can continue to provide the on-field success of his predecessor, the perhaps irreplaceable Sir Alex Ferguson.
And shareholders hoping to have a say in management of the business can forget it. The split of Class A shares (owned by the public) and Class B shares (owned by the Glazer family through its Red Football LLC) means the Glazers have 98.7% of the voting power, ten times the voting power of the shares that were sold to the public. Special company resolutions require 67% of the vote.
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