Man Utd Warns Of Profit Fall From Euro Absence

Failure to qualify for the Champions League this season is likely to cost Manchester United (NYSE: MANU - news) more than £40m, the club revealed today.

Announcing record revenues of £433m in year-end results for the 2013-14 season, United warned investors that revenue could fall by around 10% next season to between £385m and £395m, with their absence from Europe’s premier competition to blame.

Profits are also forecast to fall by 30%. Net income for last season was down 83% to £24m, a fall attributable to a large tax credit recorded in the previous year's figures.

United's net debts fell to £275.4m, with finance costs of £27.4m.

Executive vice-chairman Ed Woodward told investors that this forecast was based on an assumption that United would finish third or higher in the Premier League this season, a challenging target given last year's decline.

United could finish only seventh last year under David Moyes, whose pay-off and that of his staff after just nine months in charge cost the club £5.2m, according to the latest figures.

In an investor call, Mr Woodward said last year was "a very challenging and disappointing season", but said he was confident of recovery under new head coach Louis van Gaal.

“There is a feeling among the players and other staff that we are at the start of a very exciting period,” he said.

United's net transfer spending was £78.9m for last season, with wages rising by 19%.

The club has already spent more than £150m on transfers this summer, including a British record of £59.7m for Argentina winger Angel Di Maria. Net transfer spending for this season is forecast at £90m.

The figures underline the importance of an immediate return to top-flight European football for United, but the latest results demonstrate that the club remains a formidable and robust commercial operation.

Revenue grew 19% to £433.2m, with commercial income up to £189.3m, as the club signed a number of new regional and global sponsorship deals. Commercial income now accounts for more than 43% of its revenue.

These figures do not include the record £750m kit sponsorship deal with Adidas (Other OTC: ADDDF - news) , which begins next season and guarantees a minimum of £75m a year.

Mr Woodward said the Adidas deal and continued commercial growth demonstrated the club was well-placed for the next decade.

Broadcast revenue was up 33% to £101.6m, almost exclusively because of the growth in Premier League television revenue.

The three-year deal for international and domestic rights that began last season is worth more than £5bn to Premier League clubs.