United debt costs rise
Published 18/09/2013 | 14:56
Manchester United spent an extra £21.3 million on servicing its controversial debt pile in the last financial year while it cut the amount on buying players by £13.1 million.
Annual results for the year to the end of June showed it had reduced debt by nearly £50 million amid surging commercial revenues and a refinancing deal.
But the Premier League champions are still sitting on a £389.2 million mountain of borrowings and saw annual financing costs rise to £70.8 million over the period, mainly due to the cost of the refinancing package.
However the fall in total debt from a level of £436.9 million will see the club pay £10 million a year less in interest in future, it said.
The figures also revealed Manchester United spent £36.4 million on net player capital expenditure, down from £49.5 million the previous year.
The results come after a £150 million float on the New York stock exchange in August last year, which saw half the proceeds pocketed by US owners the Glazer family and some of the rest being used to pay down the debt pile.
The share sale of a 10% stake of the club last year followed the highly-leveraged takeover of the club by the Glazers in 2005.
That resulted in angry protests by fans' groups and subsequent unsuccessful attempts to wrest control of it from the family.
Much of the £800 million price tag paid by the Glazers had been financed by borrowing.
Announcing its latest annual results, the club hailed record annual revenues of £363.2 million - with 42% coming from a record £152.5 million of commercial income.
But the document failed to make a single mention of Sir Alex Ferguson in the year that he retired after a 27-year stewardship of the club that saw them win a succession of titles and made him the most successful manager in British football history.
The only mention of the changing of the guard at the club came as it reported exceptional items costing £6.2 million for the year included compensation payments for former coaching staff - as well as advisory costs for the stock market float.
Elsewhere, staff costs for the year were up 11.6% to £180.5 million, largely due to the expansion of the commercial business as well as new player signings, higher wages and bonuses for existing players. The club now employs 793 people, up by 80.
Meanwhile, failure to win the Premier League in 2012 when United were pipped by Manchester City cost the club £2.4 million in broadcasting revenues.
Adjusted net income for the period rose from £4.5 million to £17.2 million.
Richard Hunter, head of equities at Hargreaves Lansdown stockbrokers, said: "The merchandising machine at the company's disposal is firing on all cylinders."