Manchester United have announced financial results for the first half of 2023/24, incorporating the first six months of the season which cover July to December 2023, in other words before Sir Jim Ratcliffe’s purchase of a minority stake.
Manchester United’s pre-tax loss narrowed from £25m to just
£6m, as revenue increased by £72m (23%) from £311m to a first half record of
£383m and profit on player sales more than doubled from £14m to £30m. However, this was accompanied by operating
expenses rising £52m (16%) to £383m, while net interest payable also increased
by £16m (85%) from £19m to £35m.
The revenue growth was driven by the return to the Champions
League, which drove large increases in both broadcasting, up £52m (55%) from
£94m to £146m, and match day, up £24m (47%) from £51m to £75m. This was partially offset by lower
commercial, which fell £4m (2%) from £166m to £162m.
The impact of interest payable on United’s accounts is
striking, amounting to £35m in the first half, which represents a significant
increase over the previous comparative periods.
This is partly due to rising interest rates, but largely because the
majority of the club’s debt is denominated in USD and unhedged. Therefore, the
weakening in the Pound against the Dollar has led to higher interest charges in
the club’s accounts, which are reported in Sterling.
This is the third season in a row that Manchester United
have reported a pre-tax loss in H1. Revenues and costs are not evenly phased
during the financial year, but it is perhaps worth noting that the previous
season’s £25m loss after the first six months ultimately became a £33m loss for
the full season.
However, United’s bean counters will be gratified that their
first half loss has rebounded a little this season, though it is still nowhere
near as good as their performance in the years up to 2021, when they regularly
generated large profits.
Player sales
United’s profit from player sales increased from £14m to
£30m, mainly thanks to the moves of Dean Henderson to Crystal Palace, Anthony
Elanga to Nottingham Forest and Fred to Fenerbahce. This was United’s best result from player
trading for many a year, but it remains relatively low by Premier League
standards. They didn’t make any major sales in the January window, so this gain
will only improve if they register more deals before the 30th June accounting
close.
Looking at player sales profits in the five years up to
2021/22, we can see that United’s £92m was firmly in the bottom half of the
Premier League, miles below the likes of Chelsea £467m, Liverpool £263m and
Manchester City £254m.
United’s H1 revenue increased by £72m (23%) from £311m to
£383m, which was a club high for the first half, boosted by a new record in
match day. The club has maintained its
revenue forecast of £635-665m for the 2023/24 season, though this is £15m lower
than the initial outlook of £650-680m, again because of the early Champions
League exit.
The difference in United’s earnings in the seasons when they
qualify for the Champions League is obvious. For example, the Swiss Ramble
estimates that United will earn €60m this season from the Champions League,
even after their disastrous fourth place finish in the group, which meant that
they didn’t even avail themselves of the safety net of dropping down to the
Europa League. That is around twice as
much as the €33m they received last season in the Europe League, even though
they went further by getting as far as the quarter-finals.
United’s wage bill increased by £25m (16%) from £160m to
£185m, mainly due to higher bonus payments as a result of qualifying for the
Champions League, allied with investment in the squad and contract extensions.
The club still has to confront a number of financial issues,
as shown in these figures for the first half of the season. Despite setting a
new revenue record, the fact remains that United still posted a pre-tax loss,
while the second half of the year will lose the benefit of Champions League
income.
Furthermore, the club’s operational cash outflow had to be
funded by taking on an additional £160m of debt. As a result, total debt shot
up to around £1.1 bln, including a huge amount owed for transfers, though Sir
Jim’s money has since reduced this by £120m.
In conclusion, there will be no shortage of challenges
facing the new management team, but at least there is now a willingness to do
something about them.
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