MANCHESTER UNITED are counting on an improved performance on the pitch to boost revenues after the Premier League club paid the price for a rare barren season in 2011-12.
United, owned by the American Glazer family, floated on the stock market in New York last month at $14 per share, valuing the 19-times English champions at $2.3 billion.
The shares have drifted lower since then, and were trading at $12.65 at yesterday afternoon, down 2.4 per cent on the day.
United failed to win a trophy last season for the first time since 2005, and made an early exit from the lucrative European Champions League, meaning a reduction in income from sales of matchday tickets and lower broadcast revenues.
The cost of those failures was apparent as the club made a loss from continuing operations of £14.9 million in the three months to end-June 2012.
Underlining its commercial strength, United forecast a brighter 2012-13, based on the club reaching the quarter-finals of the Champions League and domestic cup competitions.
It said underlying earnings (EBITDA) should rise by 17 per cent to 20 per cent to £107-110 million.
Revenue was likely to be between £350-360 million, up from £320 million last year.
The club has just signed a record $559 million shirt sponsorship deal to have the Chevrolet brand on its red shirts for seven years from 2014.
The 20-team Premier League has also agreed a new £1 billion annual domestic TV deal from 2013, up 70 per cent.
“We also expect a substantial increase in the value of the Premier League’s international television contracts scheduled to be announced later this year,” executive vice-chairman Ed Woodward said in a statement.
A mystery to most Americans but a household name in soccer-loving parts of the world, the club opted for a New York flotation after ditching plans to list in Asia.
The listing was structured to leave the Glazer family firmly in control of a club they bought in 2005 for £790 million in a highly leveraged deal.
United said borrowings were £436.9 million at the end of June.
The flotation raised approximately £68 million, which has been used to further cut debt.
However, fans’ anger was fuelled after half of the proceeds from the flotation went to the Glazers, rather than all of it benefiting the club.
Criticism of the Glazers has subsided after United paid out a reported £24 million to sign Dutch striker Robin van Persie from Premier League rivals Arsenal in August. – (Reuters)
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