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The impact of the coronavirus pandemic on UK Premier League club Manchester United has been severe. $MANU Slipped to a pre-tax loss in quarter ended 31 March. Broadcasting revenue fell by 517%. Net debt increased by £127.4m to £429 sending finance costs higher as the football seasons were postponed.

ManchesterUnoted Ground

Manchester United PLC NYSE: MANU

Reported Earnings Before Open Thursday

($0.06) Missed Exp $0.01 EPS and $157.94M  Missed $171.27 Million Forecast in Revenue

Earnings

Manchester United reported earnings for the quarter ended 31 March 2020 pre-tax loss of £28.55m in the third-quarter from 1 January to 31 March, compared with a £11.117m pre-tax profit in the same period last year. Per share the quarterly loss is $0.06 versus the Zacks Consensus Estimate of $0.01. This compares to earnings of $0.06 per share a year ago. These figures are adjusted for non-recurring items.  Revenues of $157.94 million for the quarter ended March 2020, missing the Zacks consensus estimate of $171.27 by 9.37%. This compares to year-ago revenues of $198.03 million Results were impacted by the coronavirus pandemic and adverse movements in the US$-exchange rate.

Net finance costs for the quarter were £25.3m because of the rate, an increase of £22.2m on the same period the previous year.

MANU

 

Manchester United PLC NYSE: MANU

Market Reaction: Manchester United PLC NYSE: MANU

Pre-market $15.98 USD −0.46 (-2.80%)

Highlights

United’s executive vice-chairman, Ed Woodward, said the club were well-positioned to “weather the challenges” confronting football. “Since the start of the pandemic, Manchester United and our foundation have provided assistance to hospitals, charities and schools in our communities, as well as support for frontline workers and vulnerable fans,” he said.

  • Manchester United’s net debt increased by £127.4m to £429.1m in the 12 months to 31 March 2020.
  • Net finance costs for the quarter were £25.3m because of the rate, an increase of £22.2m on the same period the previous year
  • Broadcasting revenue fell by £27.8m to £26m, a decrease of 51.7% because of a £15m Premier League rebate to broadcasters following the delay and changes to the broadcast schedule for the 2019-20 season, non-participation in the Champions League and the impact of playing two fewer Premier League away games.
  • Matchday revenue for the quarter was also down, by £2.6m to £29.1m, because of the postponement of the last-16 Europa League home game, one Premier League away game and the FA Cup quarter-final at Norwich.

Manchester United Earnings 3 31 2020

 Outlook

The club has also withdrawn its previous revenue predictions for the year of £560m-580m owing to the impact of the pandemic. 

"For our commercial business, sponsorship revenues for 2019-2020 have contracted and their recognition in quarter four will be as normal. Retail revenues will be impacted due to the closure of our Megastore. Broadcast revenues will be dependent on the timing of matches played in the fourth quarter and finalization of the rebate. Matchday revenues will be significantly impacted by the closure of Old Trafford to fans. Looking further ahead, given the revised timing for domestic and UEFA competitions, we will not be participating in our typical summer tour activities this year. And, finally, we continue to expect committed player capex for the full year to remain at approximately GBP190 million with amortization costs of GBP130 million. We look forward to providing you with more information on our outlook for the 2020-2021 season on our fourth quarter earnings conference call later in the year."

United’s executive vice-chairman, Ed Woodward, said the club “These actions reflect our core values as a club and the resilience through adversity that we have demonstrated many times throughout our long history and will do so again to weather these current challenges. “In that spirit, we look forward to the team safely returning to the pitch and building on the exciting momentum that Ole [Gunnar Solskjær] and the players had previously achieved, while taking all necessary steps to protect public health. Our thoughts remain with all those affected during this unprecedented time.”

Fitch Warns on Global Sports Leagues Weigh Risks of Reopening Seasons

It is increasingly plausible that stadiums and arenas will not host large crowds this summer or fall. The ability of a sport to uniformly come back online is complicated by states re-opening at different times, and varied local restrictions may result in different attendance policies.

The biggest factor in the decision to resume sports events is the risk of additional infections affecting players, team management, coaches, support staff, facility staff and fans.

A related consideration is the possibility of liability issues for facilities, teams or leagues if games lead to a new outbreak. ames played without fans in attendance will exacerbate revenue shortfalls as teams rely heavily on ticket revenues to meet play payroll and other team level operating costs but, if games return without audiences, sports television viewership may reach new highs. Some leagues and teams have reduced salaries and furloughed staff to offset budget pressures

 Source:Manchester United

From The TradersCommunity Research Desk

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