MU Finance, part of the complex web of vehicles that control Manchester United, has filed results for the second quarter of 2009 and…
…there’s nothing too surprising in the figures, which is to be expected given that it’s been barely a month since the MU Finance launched its controversial £500m bond issue.
Revenues for the last three months of 2009 rose 17 per cent year-on-year to £87m. Reported EBITDA increased from £29m to £43m on the back of the strong top line growth (higher media, commercial revenue and match day revenues) and lower operating costs. But note the club played one more game in the period. That pushed group margin up to 49.8 per cent.
Click to enlarge:
However, a couple of things do stand out, particularly leverage. Pro-forma net debt is £530m, or 4.5 times EBITDA.
And this from page 7 of the results statement:
Other operating expenses – exceptional items During the three months ended 31 December 2009 a provision was created of £2.2m to reflect the present value of future lease payments for a property in the Republic of Ireland upon which no income-generating tenant has been secured.
Quite what that relates to, we aren’t sure. (H/T Taxloss)
In any event, Evolution Securities analyst Jonathan Moore says the real challenges for MU Finance lie ahead:
The more interesting issues are likely to occur down the line (cash leakage to Red Football JV, any failure to proceed to the later stages of the Champions League and the ongoing disquiet over the Glazer ownership/potential bid for the co).
And on that note, the Red Knights Group, the group of City financiers plotting a takeover bid for the club, have issued a statement:
Following the intense media speculation overnight, we can confirm that a group of high net worth individuals, who support Manchester United (known as the “Red Knights”), met in London yesterday.
This group is supportive of current management but are looking at the feasibility of putting together a proposal to be put to the Glazer Family regarding the ownership of Manchester United. These discussions are in early stages and no contact has been made with the Glazer Family.
For such a proposal to be viable, it would require the involvement and support of Manchester United supporters worldwide. The Red Knights have been liaising with the Manchester United Supporters Trust (MUST) and their representatives attended yesterday’s meeting.
As a first step, the Red Knights want supporters to demonstrate their commitment by joining the free online membership of the Supporters Trust www.joinmust.org.
Any new ownership model would aim not only to put the Club on a sound financial footing, but would also aim to put the supporters at the heart of everything the Club does.
In the coming weeks the Red Knights will continue to work with MUST and others to formulate our proposal and further statements will be issued in due course.
Apparently, the Red Knights are prepared to offer £1bn for the club although there’s no clear idea of how this would be financed, as the BBC’s Robert Peston notes:
So Man Utd fans should ask to see the small print before rallying to their cause, because there would be no benefit to them of replacing one debt-heavy financial structure for another.
Also, it’s incredibly early days for these buyout plans: there’s been one meeting of the putative bidders and a barrage of media hysteria. And, to state the bloomin’ obvious, the Glazers don’t have to sell and have shown no inclination to do so.
Yet.