By David Owen
February 12 – The return of Champions League football has benefited Manchester United, with the Old Trafford club announcing doubled pre-tax profits of £33.1 million for the six months to December 31.
The club’s deal with Adidas, which clicked in from last August, was the other major factor behind a jump in revenues, from £194.4 million to £257.3 million. This deal saw revenue from retail, merchandising, apparel and product licensing surge to £25.7 million in the second quarter – an increase of 225% over the corresponding year-earlier period.
The team’s failure to progress beyond the group stage of this season’s Champions League, and the strong possibility that it might not even qualify for next year’s edition, may rein in future prospects, however – even if domestic broadcasting income will jump significantly in 2016-17, in common with the club’s Premier League rivals.
In its outlook for fiscal 2016, the club continues to forecast revenue of between £500 million and £510 million, unchanged from the previous quarter, implying much slower top-line growth than that achieved over the first six months of the current financial year.
Describing table-topping Leicester City as a “fantastic reference-point for everybody this year”, Ed Woodward, executive vice chairman, said that United’s “strong commitment to investing in our squad” was “underpinned by our financial strength”.
The club’s “solid results off the pitch help contribute to what remains our number one priority – success on the pitch”. The team’s shortage of goals under manager Louis van Gaal has become a running joke this season among fans of other clubs, although signs of improvement have been perceptible in recent games.
The cash flow statement in the unaudited results reveals that the club spent £95.9 million on new players in the first six months of 2015-16, while recouping £35.8 million from player disposals. Some of these were presumably sold at a loss, however, with a loss of £6.8 million on player disposals recorded in the six months, versus a profit of £19.8 million in 2014-15.
Dividends paid – a cost not incurred by the club’s main rivals – amounted to £4.8 million in the six months just ended. Borrowings rose to £437.7 million, up from £410.5 million last June and £374 million at end-December 2014.
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