Shareholders score as United profits soar

AS Manchester United’s profits soared to record levels yesterday, the company’s biggest shareholders, Irish duo JP McManus and John Magnier, have seen the value of their holding in the club soar by 37.9% in three months to €38.42m.

The two maestros of the racing world’s 11.4% holding, held through their Cubic Expression investment vehicle, has risen from £27.8m in July, when they increased their stake to 11.4%, to £38.4m yesterday, a near 40% paper profit of £10.5m in just three months.

Shares in the world’s richest soccer club have risen in recent weeks on the back of takeover speculation that US billionaire Philip Anschutz, who also owns the Tampa Bay Buccaneers’ American football team, wants to acquire the United franchise.

United finance director Nick Humby told Reuters: “no shareholder has approached us about takeover talks or even about a board seat.

“The takeover talk does not ring true with us.” Company chairman Roy Gardner told a results briefing: “we talk to all our major shareholders. There is no reason to believe they are anything but value investors. It’s all pure speculation.”

Yesterday, the club, currently third in England’s Premier League, reported pre-tax profits for the year to July 31 of £39.3 million compared with forecasts of around £43 million, on turnover up 18% at £173 million.

The company’s profits on player trading, which are kept separate in the accounts from the company’s normal business activities, were £12.9 million, largely from the transfer of England captain David Beckham to Real Madrid. The group has been Britain’s most profitable listed football club, as clubs like Leeds United struggled under a debt pile.

Chelsea was rescued by its Russian billionaire from its debts.

In contrast, Manchester United has a net cash pile of £28.6 million.

The team, including stars such as club captain Irishman Roy Keane, Dutch striker Ruud van Nistelrooy, and Ryan Giggs, said its profits were underpinned by winning eight English Premier League titles in 11 years and its sponsorship deals with sportswear group Nike, worth £303m over 13 years, and mobile phone company Vodafone. “These are a cracking set of results, but there are a lot of one-offs this year and they may struggle to match them next year on a like-for-like basis,” said analyst Andrew Lee at Dresdner Kleinwort Wasserstein, who rates the shares a “hold” and has a target price of 190p, with any upside coming from takeover talk.

Net income rose to £15.8 million, or 6.1 pence a share, in the six months ended July 31, compared with £1.6 million, or 0.6 pence a share, a year ago, according to Bloomberg calculations.