What Does MANU’s Newly Added Risk Factor Indicate for Investors?


Manchester United Plc. (MANU) owns and operates Manchester United Football Club, one of the most popular football clubs across the globe. Its revenue streams include sponsorship, merchandising, product licensing, broadcasting, and matchday initiatives.

Manchester United Risk Factors

According to the new Tipranks Risk Factors tool, MANU’s main risk category is Finance & Corporate, which accounts for 34% of the total 53 risks identified. The next two major risk factor contributors are Ability to Sell and Legal & Regulatory at 21% and 17%, respectively.  Since June, the company has added one new risk factor under Macro & Political category.

The COVID-19 pandemic has affected the company’s business and the impact is expected to continue on its business, results of operations, financial position, and cash flows.

Since the onset of the pandemic, there have been postponements in key football leagues with games played without spectators and behind closed doors. This resulted in a reduction in matchday revenue and rebates on broadcasting revenue for MANU.

Moreover, pandemic restrictions meant the Old Trafford football stadium, its flagship megastore, museum, and stadium tour operations remained closed. MANU notes that the timings for reopening and any modified participant levels are currently uncertain (Ten thousand supporters attended the final home match in May).

Financial Performance

Now let us dive into the company’s financial performance for Q3 2021. Amidst the COVID-19 backdrop, MANU’s different revenue streams have followed varying trajectories. Matchday revenue fell 94.5% year-over-year to £1.6 million. Commercial revenue also dropped 15.3% year-over-year to £58.1 million. Its Broadcasting revenue, however, jumped 125.4% year-over-year to £58.6 during the same period, owing to the higher number of matches played.

Total revenue decreased 4.4% year-over-year to £118.3 million. Adjusted net loss per share of the company widened to £13.30 from £4.42 a year ago. Amid the present COVID-19 uncertainty, MANU did not provide guidance for fiscal 2021.

Additionally, the company announced a semi-annual cash dividend of $0.09 per share payable on July 30. (See Manchester United stock chart on TipRanks)

Bottomline

The Finance & Corporate risk factor average stands at 35%, compared to MANU’s 34%. For the Ability to Sell risk category, while the sector average is 13.5%, MANU is at 20.8%. Shares are down 9.5% so far this year.

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