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"JPMorgan, which has been appointed as a global co-ordinator for the IPO, had forecast the club would make Ebitda of £114m for the year.
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ENGLISH Premier League soccer champions Manchester United yesterday reported record full-year profit and revenue, strengthening the club’s hand ahead of a planned $1 billion (R7bn) flotation in Singapore later this year.
The club, which intends to start pre-marketing for the initial public offering (IPO) later this month, said that earnings before interest, tax, depreciation and amortisation (Ebitda) rose to £110.9 million (R1.2bn) in the year to June from £101.2m the year before.
JPMorgan, which has been appointed as a global co-ordinator for the IPO, had forecast the club would make Ebitda of £114m for the year.
The club said that total revenue increased to £331.4m, up £45m on the year, incorporating a 27 percent rise in commercial revenue boosted by the club’s £80m shirt sponsorship deal with Aon Corporation. That helped it swing to a pretax profit of £29.7m, compared with a loss of £15m last year.
Net debt fell to £308.3m from £376.9m a year earlier, the football club said.
Chris Searle, a corporate finance partner at accountancy firm BDO, said that the results augured well for the IPO but cautioned that the intention of club owners, the Glazer family, to use a two-tier share structure, selling non-voting shares to outside investors, could limit the appeal of the offering.
“This will only be palatable to investors as long as results, both financial and on the football field, keep going the right way. If the results start going the wrong way, incoming investors may come to rue the lack of control they will be able to exercise,” Searle said.
Sources said that England’s most successful club hoped to raise as much as $1bn from the IPO through the sale of around 25 percent to 30 percent of the club. However, that valuation has been met with scepticism from some commentators.
Sources said that the Glazer family, who bought the club in 2005, were planning to use some of the proceeds from the IPO to reduce the club’s debt, a burden that made the American owners deeply unpopular with some fans.
The Glazers were targeting an IPO by the end of October, sources said.
The club, which intends to start pre-marketing for the initial public offering (IPO) later this month, said that earnings before interest, tax, depreciation and amortisation (Ebitda) rose to £110.9 million (R1.2bn) in the year to June from £101.2m the year before.
JPMorgan, which has been appointed as a global co-ordinator for the IPO, had forecast the club would make Ebitda of £114m for the year.
The club said that total revenue increased to £331.4m, up £45m on the year, incorporating a 27 percent rise in commercial revenue boosted by the club’s £80m shirt sponsorship deal with Aon Corporation. That helped it swing to a pretax profit of £29.7m, compared with a loss of £15m last year.
Net debt fell to £308.3m from £376.9m a year earlier, the football club said.
Chris Searle, a corporate finance partner at accountancy firm BDO, said that the results augured well for the IPO but cautioned that the intention of club owners, the Glazer family, to use a two-tier share structure, selling non-voting shares to outside investors, could limit the appeal of the offering.
“This will only be palatable to investors as long as results, both financial and on the football field, keep going the right way. If the results start going the wrong way, incoming investors may come to rue the lack of control they will be able to exercise,” Searle said.
Sources said that England’s most successful club hoped to raise as much as $1bn from the IPO through the sale of around 25 percent to 30 percent of the club. However, that valuation has been met with scepticism from some commentators.
Sources said that the Glazer family, who bought the club in 2005, were planning to use some of the proceeds from the IPO to reduce the club’s debt, a burden that made the American owners deeply unpopular with some fans.
The Glazers were targeting an IPO by the end of October, sources said.
