Manchester United Plc (NYSE:MANU) shares fell 1.7% after the US-owned football club reported a loss-making quarter due to lower revenues but kept full-year guidance unchanged.
For the first quarter of its new fiscal year, the northwest-England entertainment company’s revenue totalled £143.1 million, down 8.9% from a year earlier as matchday takings and broadcasting revenues were lower due to three fewer games.
Working out whether profits were improved or worsened was complicated, with an improvement in the EBITDA measure, a swing from operating profits to an operating loss of £6.9 million was reported, but at the net profit line a swing to a £1.4 million profit from a £25.8 million loss.
Total operating expenses for the quarter were £185.6 million, an increase of 0.5%, but wages fell 11% to £80.2 million due to changes in the first-team playing squad, and other expenses fell 10% to £39.2 million due to reduced costs for the pre-season tour.
An £8.6 million charge reflected the cost of the redundancies from the cost and headcount reductions put in place since Jim Ratcliff bought his near-25% stake, which CEO Omar said "remain on track".
Commercial revenue fell 5.6% to £85.3 million, bolstered by new sponsorship deals with Heineken and its Tiger Beer brand, along with renewals from DHL, the Hong Kong Jockey Club, and Konami.
Matchday revenue remained resilient at £26.5 million, down 3.3%, driven by strong hospitality and VIP sales.
Broadcasting revenue fell 20.4% to £31.3 million as the team participated in the revised UEFA Europa League format.
Berrada said he was "delighted" to have appointed Ruben Amorim as new men’s head coach after sacking Erik Ten Hag with the ain of remains "returning Manchester United to the top of domestic and European football".
He noted progress on key initiatives, stating the renovation of the Carrington training centre is "progressing well", while the Old Trafford Regeneration Task Force continues its work.
Despite the revenue decline, the club maintained its full-year guidance, expecting total revenues between £650 million and £670 million and adjusted EBITDA of £145 million to £160 million.