26/10/2006
Sheffield United, the diversified leisure and property play best known for guiding the fortunes of Premiership newcomers The Blades, more than doubled turnover to £27.2m for the year to June on its biggest gates for more than 30 years.
However, losses burgeoned from £600,000 to £6.2m with promotion prompting a £5.6m increase in player and football management wages. Blades fan and chairman Kevin McCabe admitted the promotion chase had required significant spend on players/wages, and bonus payments had contributed to high year-end losses. Nevertheless, he feels the price was worth paying with the group in a much stronger financial position – Premiership status will boost TV and sponsorship revenues, and a parachute payment will arise even if the club is relegated. Sheffield United also enjoyed record season ticket sales for the new campaign.
Overall, the group’s radically diversified model seems to be working well, with the recent £10.4m rights issue well supported and off-pitch revenues also spiralling. By way of example, last year’s top line leap reflected growth across all divisions, with property joint venture United Scarborough Estates generating £12.8m of the increase in its first full year’s trading and contributing £2.5m of profit. A second joint venture will launch soon on the back of USE successes.
Other off the field highlights, of which there are many, include the granting of planning permission for a hotel at Bramall Lane, designed to fit into an entertainment complex including a casino. Sheffield United also became the first Western football club to buy a majority stake in a Chinese football club, known as Chengdu Blades – McCabe sees huge commercial opportunities in the Peoples’ Republic. If you are a fan, the shares are well worth holding.
| Market cap: | £18.88m |
| PE Forecast: | n/a |
| Share price: | 13.25p |
| AIM | £27.85m |
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