Manchester United plc delivered QQ2 2025 revenue of GBP 198.7m, down 11.98% year-over-year but up 38.89% sequentially from a low base in Q1 2025. The period generated EBITDA of GBP 55.9m with an EBITDA margin of 28.1%, while operating income was a modest GBP 3.0m (1.53% of revenue). Net income remained negative at GBP -27.75m, driven by substantial other expenses and interest, resulting in a negative EPS of GBP -0.16. The quarter underscores a bifurcated profile: operating leverage exists at the EBITDA level, yet net profitability is pressured by elevated financing costs and non-operational charges.
From a balance sheet perspective, the group carries meaningful leverage with total debt of GBP 740.2m and net debt of GBP 644.6m, offset by cash and equivalents of GBP 95.5m. The current ratio sits at 0.42, signaling tighter short-term liquidity, and free cash flow remains negative at GBP -70.2m for QQ2 2025. Management commentary (where available) and the earnings data suggest a focus on monetizing the brand through digital channels, merchandising, licensing, and direct-to-consumer initiatives, while seeking ongoing efficiency improvements to manage costs and capital structure. Investors should monitor rights renewal cycles, digital monetization traction, stadium-related revenue opportunities, and refinancing risk given the debt load and negative cash conversion dynamics.
Overall, the investment thesis is a blend of defensible brand value and secular demand for sports media/content with a meaningful leverage and cash-flow risk overlay. A closer eye on liquidity management, cost discipline, and revenue mix optimization will be key to turning EBITDA resilience into sustainable free cash flow generation.