Feb. 21 (Bloomberg) -- Manchester United’s second-quarter profit rose 31 percent as the defending Premier League soccer champion reduced its finance costs and paid less tax.
Net income was 10.5 million pounds ($16.6 million) in the three months ended Dec. 31, compared to 8 million pounds in the year-earlier period, MU Finance Plc said today in its website. Net finance costs declined 3 million pounds to 12.2 million pounds, while revenue rose 8.7 percent to 101.3 million pounds.
The record 19-time English champion benefited from a sponsorship deal with shipping company DHL and extra broadcast income. Commercial revenue rose 14 percent to 29 million pounds. The team reduced debt by 69 million pounds to 439 million pounds and was left with 50.9 million pounds in cash and equivalents at the end of the period.
United, which leads Real Madrid as soccer’s most valuable brand according to a report by Brand Finance Plc, got approval from Singapore’s stock exchange in September to raise about $1 billion in an initial public offering. The team hasn’t set a date for the sale.
United has continued to repurchase its bonds, and bought 5.3 million pounds worth in the quarter. It now owns 92.8 million pounds of its senior secured notes. The team will continue to hold them and they may be sold back to the market depending on the club’s needs, it said today.
In the six-month period, United’s commercial revenue rose 16.3 percent to 58.6 million pounds on the accord for DHL to sponsor its training uniform, a profit-sharing agreement with jersey supplier Nike Inc. and other sponsorships. The DHL contract is worth 40 million pounds over four years.
Media income rose 13.4 percent to 60.9 million pounds on a bigger share of broadcast revenue from Champions League organizer UEFA, while ticket and hospitality sales at Old Trafford rose 5.9 percent to 55.5 million pounds.
United’s broadcast share increased because it won the Premier League. Coach Alex Ferguson’s team dropped out of this season’s Champions League after the group phase for the first time in six years.
Staff costs rose 14.7 percent to 76.5 million pounds on higher player salaries and employees hired to support the growth of United’s sponsorship and commercial operations. Net finance costs almost doubled to 31.6 million pounds, in the six month period.
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