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Man Utd posts record profits

But debt on the rise too as Red Football releases accounts

Published on October 8th 2010.

Man Utd posts record profits

Manchester Utd broke the £100m profit barrier for the first time in its history – but saw its debt levels rise too.

Results for Red Football Group for the year ended 30 June 2010 show that the club’s turnover also rose to record levels – up to £286m, compared to £278m in 2009 – but its debt pile crept up to £521.7m (2009: £514m).

Net interest payable on the debt for the year was £42.3m (2009: £41.9m). The club lost £40.7m on interest rate swaps related to the previous bank facilities before the £500m bond issue carried out at the start of the year. It also lost £19m on foreign currency exchange due to the weak dollar.

The firm managed to increase commercial turnover by 16.5 per cent, to £81.4m (2009: £69.9m) but matchday turnover dropped by £8m, to £100m, due to fewer games. The increase in commercial revenue was due to extra sponsorship deals and a cumulative profit share deal with Nike.

The club’s net assets stood at £777.2m and it had a cash balance of £163.8m. Staff costs at the club grew to £131m (2009: £123m). The operating costs of the company were largely unchanged at £185m.

The club said it had maintained a ‘high level of team performance on the pitch’ and had signed new contracts with key senior players. Profit on disposal of players for the year was £12.7m, a decrease of £68m on 2009.

During the year, a provision of £2.2m was made to reflect the value of future lease payments on a property in the Republic of Ireland, originally signed in August 2000, which the club is not using. The accounts said that the provision ‘assumes that we are unable to secure a suitable sub-tenant until we can exercise a break clause in 2015.’

Amortisation of players’ registrations for the year was £40.1m, an increase of 6.6 per cent on 2009. This increase was primarily due to the acquisitions of new players since January 2009, ‘in particular Valencia, Diouf and Obertan.’ The increased amortisation associated with these acquisitions was partially offset by the disposals of Carlos Tevez and Cristiano Ronaldo.

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