Manchester United PLC (MANU) has reported a disappointing fiscal fourth-quarter 2024, with revenue dropping 15.0% year-on-year to 142.2 million British pounds ($179.43 million). This figure falls short of analyst expectations, which had predicted revenue of $189.09 million.
The decline in revenue can be attributed primarily to a significant drop in broadcasting revenue, which plummeted 40.5%. While commercial revenue saw a modest increase of 5.6%, matchday revenue also took a hit, declining by 7.9%. This combination of factors led to an operating loss of (32.4) million pounds for the quarter, a sharp contrast to the (0.3) million pound loss reported in the same period last year.
Despite the challenging financial performance, Manchester United remains optimistic about the future. The club’s adjusted EBITDA came in at 19.3 million pounds, down from 43.2 million pounds in the previous year. Adjusted EPS loss for the period expanded to (15.79) pence, compared to (6.18) pence last year. This resulted in an adjusted EPS loss of $(0.20), missing analyst expectations of a loss of $(0.17).
As of June 30, 2024, the company held 73.55 million pounds in cash and equivalents, and the quarter saw a net cash inflow from operating activities of 125.86 million pounds. The company’s USD non-current borrowings remained at $650 million as of June 30, 2024, unchanged from the previous year.
Looking ahead, Manchester United expects fiscal 2025 revenue to range between 650 million pounds and 670 million pounds, exceeding analyst consensus estimates of 658.67 million pounds. The club also predicts fiscal 2025 adjusted EBITDA to fall between 145 million pounds and 160 million pounds.
To navigate these challenges, Manchester United has begun a business transformation plan, starting in the third quarter of fiscal 2024. This plan includes installing a new executive leadership team, streamlining the organizational structure, and implementing a significant cost rationalization program.
The stock has faced a difficult year, down over 17.3% in the last 12 months. These declines have been fueled by reports of a potential sale of the entire team. In December 2023, Jim Ratcliffe purchased a 25% stake in the club.
As of Wednesday morning, MANU stock is down 3.59% at $15.81 premarket.
