United holding company cuts debt

‘Red Football Limited, Manchester United’s holding company, has seen a big fall in net debt but a rise in the cost of servicing that debt.    There was a 15.7 per cent rise in full year turnover to £331.4m in full-year results to 30 June boosted by new sponsorship money, and higher match day and media revenues. 

‘Red Football Limited, Manchester United’s holding company, has seen a big fall in net debt but a rise in the cost of servicing that debt.    There was a 15.7 per cent rise in full year turnover to £331.4m in full-year results to 30 June boosted by new sponsorship money, and higher match day and media revenues. 

The club’s net debt fell from £377m to £308m although annual interest payments increased by £3.5m to £43.5m.  Pre-tax profits rose from a loss of £14.9m in 2010 to £29.7m although part of that was down to a £16.4m exchange rate gain on the company’s US dollar debts. That helped compensate for a slimmer profit margin which declined nearly 2 percentage points to 33.5 per cent. Operating profit increased by more than £9m to £110.8m.

When part of the club is floated on the Singapore stock exchange, a two-tier share structure is expected to be used.   That will protect the Glazer family’s control of the club and indeed single ownership is being used as a reason for investment.   Fans who hoped to use the flotation to get a toehold in the club will be disappointed but not surprised.

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