Manchester United has reported a significant fiscal fourth-quarter loss, revealing a challenging economic landscape characterized by revenue declines in two of its three reportable segments. The British soccer club faces this financial hurdle as they implement restructuring initiatives that are aimed at improving their performance and are expected to influence results in fiscal 2025. During the quarter ending June 30, Manchester United posted an adjusted loss of approximately 0.16 pound ($0.21) per share, a notable decrease from a loss of 0.06 pound in the same quarter of the previous year.
Overall revenue took a substantial hit, dropping 15% to 142.2 million pounds. As a result, Manchester United's shares, which trade on the New York Stock Exchange under the symbol $MANU, experienced a decrease of 3.1% in premarket trading. Breaking down the revenue sources, broadcasting revenue saw a staggering decline of 41%, totaling 38.4 million pounds.
This decline can be attributed to the men's first team finishing eighth in the highly competitive English Premier League during the 2023-2024 season, in addition to a reduction of five matches compared to the prior year’s period. Matchday revenue also fell by 7.9%, landing at 32.6 million pounds, impacted by two fewer home matches in this quarter.
However, commercial revenue displayed an uptick, improving by 5.6% to 71.2 million pounds, suggesting that while certain areas have struggled, there are segments of growth within the franchise. Operating expenses widened considerably, increasing to 181.4 million pounds from 173.2 million pounds year-over-year, highlighting the pressing need for cost management strategies.
In response to these financial challenges, Chief Executive Omar Berrada stated, "We are working towards greater financial sustainability and making changes to our operations to make them more efficient, to ensure we are directing our resources to enhancing on-pitch performance." Looking ahead to fiscal 2025, Manchester United anticipates recording revenue in the range of 650 million pounds to 670 million pounds.
In a survey conducted by Capital IQ, three analysts projected an even higher revenue figure of 730.4 million pounds for the same period. In the previous fiscal year, the franchise reported a modest increase in revenue by 2.1%, achieving a total of 661.8 million pounds. In terms of adjusted earnings before interest, taxes, depreciation, and amortization (EBITDA), figures are expected to be between 145 million pounds and 160 million pounds for fiscal year 2025.
Furthermore, the company recorded a decline of 4.6% in adjusted EBITDA for fiscal 2024, settling at 147.7 million pounds. Berrada elaborated on the club's overall guidance, stating, "The full-year guidance reflects a partial year impact of the transformative cost-savings and organizational changes that we have been busy implementing over the summer." Notably, Manchester United has initiated an employee redundancy program, which commenced in July and reached completion last month.
This program resulted in the elimination of 250 roles across various departments within the club. Consequently, the club anticipates incurring severance charges approximating 10 million pounds due to these headcount reductions. By implementing these changes, Manchester United projects to generate annualized cost savings ranging from 40 million pounds to 45 million pounds, before accounting for the 10 million pound implementation costs, throughout the fiscal years 2025 and 2026. In terms of stock performance, the latest figures indicate a price of 15.90 pounds, a change of -0.50 pounds, resulting in a percent change of -3.05%.
In conclusion, Manchester United is navigating through a phase of financial adjustment, with a focus on enhancing operational efficiency. The path forward appears filled with potential restructuring and reorganization aimed at securing better financial outcomes in the coming years..