Manchester United has record $217m operating profit

Manchester United’s parent company posted a record full-year operating profit of 110.9 million pounds ($217 million) as the English soccer champion plans a US$1 billion ($1.2 billion) initial public offering in Singapore.

Red Football Ltd.’s profit before depreciation, amortization of players’ registrations and exceptional items rose 9.6% for the year to June 30, the club said in an e- mailed statement. Revenue climbed 16% to 331.4 million pounds on ticket sales, broadcast revenue and sponsorship deals with companies including Aon Corp.

 

The net debt of the Glazer family’s team was reduced from 376.9 million pounds to 308.3 million pounds. Its pretax profit was 29.7 million pounds, compared with a loss of 15 million pounds last year. It’s the second time in six years the club has been profitable.

 

“This can only help make the IPO in Singapore a success,” Chris Searle, a partner at BDO LLP accounting firm in London, said in an interview. “Football is always pretty volatile but if you were going to bet on a club being successful financially it would be Manchester United.”

 

The Glazers plan to raise about US$1 billion by selling as much as 30% of the club to reduce its debt burden and finance player purchases. The family, which also owns the National Football League’s Tampa Bay Buccaneers, bought the team in 2005 for 790 million pounds. United spends about 45 million pounds a year to service a 500 million-pound bond, which matures in 2017.

 

JERSEYS, MOPEDS

The club boosted so-called commercial revenue 27% to 103.4 million pounds as a jersey sponsorship accord with Aon began and sold licensing rights to companies such as Honda Motor Co., which is making United-branded mopeds in Thailand.

 

Matchday sales rose 8.3% to 108.6 million pounds on proceeds from a tour of the U.S. and because United played more home games than the previous campaign by reaching the Champions League final and F.A. Cup semifinals. Media revenue rose 13.9% to 119.4 million pounds, driven by a bigger share of Champions League television rights income.

 

After winning its 19th English soccer championship last season, United strengthened its squad in June by signing goalkeeper David De Gea, defender Phil Jones and winger Ashley Young. It tops the Premier League standings after three games of this season with a maximum nine points.