Man United cuts debt, confident of hitting financial goals
LONDON (Reuters) - A strong start to the season and new sponsorship deals have reinforced English Premier League soccer club Manchester United's confidence it will hit this year's financial targets despite lower first-quarter earnings.
United, English champions a record 19 times, said they had cut debt to 360 million pounds ($572 million), down 17 percent from a year earlier, after a listing on the New York Stock Exchange in August that left the American Glazer family firmly in control of the club.
A vocal section of United supporters have argued that the cost of servicing debts following the Glazers' 790 million pounds leveraged buyout of the club in 2005 have hampered its ability to compete with rival clubs at home and abroad.
"We have been very pleased at how the year has started both on and off the pitch," executive vice chairman Ed Woodward told analysts on a conference call.
"Based on our first-quarter results and current visibility we remain confident that we can achieve our previously stated targets for fiscal 2013 -- revenue between 350 and 360 million pounds and adjusted EBITDA of 107-110 million pounds," he added.
United, reinforced by the summer hiring of Japan's Shinji Kagawa and Dutchman Robin Van Persie, lead the English Premier League after finishing second behind local rivals Manchester City last season.
United have also already qualified for the knockout stages of the Champions League after a costly early exit last season from Europe's most lucrative club competition.
NEW SPONSORS SIGNED UP
United shares traded 12 cents lower at $12.86 in New York shortly after the opening on Wednesday. They floated at $14 in a listing that valued the club at $2.3 billion.
Investors have generally been wary of sporting franchises, concerned that their financial fortunes are too tightly linked to sporting success.
United argue that their global fan base and a buoyant TV rights market for the English Premier League give them sound financial underpinnings.
For the three months to end-September, a reduction in broadcast revenue pushed underlying core earnings (EBITDA) 15 percent lower.
However, United said most of the decline was down to the scheduling of matches -- the club played only one Champions League game in the period -- and would be recouped.
United, who claim to have 659 million followers worldwide, signed 10 new sponsorship deals in the first quarter, the most eye-catching being a $559 million agreement with General Motors to have the Chevrolet brand on the club's famous red shirts from 2014.
The presence of Kagawa in their ranks has also led to a number of deals with Japanese firms. A 24 percent rise in revenues from all its commercial deals helped to push total revenues up 3 percent to 76 million pounds.
Profit from continuing operations was up to 20.5 million pounds against a loss of 5 million pounds a year earlier, a figure that was boosted by a tax credit which the club said related to it moving to certain U.S. tax bases.
Chelsea, who won the Champions League in May, said last week they had made a profit in 2011-12, returning to the black for the first time since Russian oligarch Roman Abramovich bought the club in 2003.
($1 = 0.6293 British pounds)
(Editing by Mike Nesbit)
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