Manchester United plc (NYSE:MANU) reported Q1 earnings results on November 18, 2019. The company 1Q Fiscal 2020 Revenues of £135.4 million, adjusted EBITDA of £34.8 million, and small operating profit of £11.0 million. Analysts were projecting a loss of the quarter so stock is up 1.42% on the earnings and revenue surprise.
Ed Woodward, Executive Vice Chairman, remarked, “We have a clear vision in terms of football philosophy and recruitment. The significant investments that we have made in recent years in areas such as transfers, recruitment infrastructure, analytics and our Academy are already beginning to bear fruit. We are very proud to be shortly approaching a milestone 4,000th game featuring an Academy player, and we are particularly optimistic regarding the considerable young talent currently coming through. Our ultimate goal is to win trophies by playing exciting football with a team that fuses graduates from our Academy with world-class acquisitions.”
For the full 2020 fiscal year, management did not adjust expectations. The company continues to expect revenues to be in a range of £560 to £580 million and total adjusted EBITDA to be in a range of £155 to £165 million.
Earnings Call Trends
Historically, management has exceeded analyst expectations 4 out of the last 8 tracked quarters, and missed expectations 4 quarters.
In the following table, we summarize the company’s stock price movements after earnings releases. The “Price Day Prior” column shows the closing stock price on the day before the earnings report, and the “Price Next Day” column shows the stock price at the end of the trading day after the earnings report. After the last earnings report for the period ending June 30, 2019, the stock price reacted by falling by -3.4%.
|Report Date||Price Day Prior||Price Next Day||Change %||Result|
Fundamentals And Technical Analysis
Manchester United is currently trading at $16.51/share, up 1.7% for the day. The company is trading at approximately 74% of its 52 week high of $22.40/share. The company’s 14 Day Relative Price Index (RSI) of 44.68 suggests the company is trading in technically neutral territory. The RSI is considered overbought when above 70 and oversold when below 30.
The current share price implies a price-to-earnings (P/E) multiple of 109.7x.
Manchester United’s current share price also implies a price-to-book (P/B) multiple of 5.0x. The following table summarizes some other key fundamental ratios:
|Last Fiscal Period||FY2019.Q4|
|Period End Date||June 30, 2019|
|Stock Price (Current)||$16.24|
|P/E Ratio (Fwd)||-2,070.9x|
|Total Debt to Capital (%)||19.9%|
|Levered Free Cash Flow||$231 million|
|Enterprise Value / EBITDA||12.2x|
Company Profile: Manchester United plc
Manchester United plc is a mid-cap stock with a market capitalization of $2.673 billion and a total enterprise value of $2.934 billion. The company operates in the Communication Services sector and Entertainment industry.
Manchester United plc owns and operates a professional football club in the United Kingdom called Manchester United Football Club. It develops marketing and sponsorship relationships with international and regional companies to leverage its brand.
The company also markets and sells sports apparel, training and leisure wear, and other clothing featuring the Manchester United brand; and sells other licensed products, such as coffee mugs and bed spreads featuring the Manchester United brand and trademarks, as well as distributes these products through Manchester United branded retail centers and e-commerce platforms, and through the company’s partners’ wholesale distribution channels.
In addition, it distributes live football content directly, as well as through commercial partners; broadcasts television rights relating to the Premier League, Union of European Football Associations competitions, and other competitions; and delivers Manchester United programming through MUTV television channel to territories worldwide.
Further, the company offers a direct to consumer subscription mobile application in 167 territories; and operates Old Trafford, a sports venue with 74,989 seats. Manchester United plc was founded in 1878 and is based in Manchester, the United Kingdom. Manchester United plc is a subsidiary of Red Football LLC.