As well as being one of the world’s most famous football clubs, Manchester United (NYSE: MANU) is also a listed company. That means investors can buy its shares for a Stocks and Shares ISA.
But should I add some Manchester United shares to my portfolio? Let’s get the ball rolling and find out.
Out of form
As the chart above shows, the share price has hardly been in scintillating form in recent times. It’s down by around 16% over five years and a similar amount over 12 months.
This means that someone who invested £10,000 into the shares one year ago would now have around £8,400 (ignoring currency moves, as the shares are denominated in dollars). Not great, especially as the company doesn’t pay a dividend these days.
Of course, this lacklustre performance isn’t surprising when we consider how poorly the team has been doing on the pitch. The just-finished 2024/25 season was one of the worst in the club’s modern history. Manchester United ended 15th in the league with just 42 points, marking its lowest finish in the Premier League era.
According to analysis by The Times, Manchester United is the worst-value-for-money side in Premier League history after that poor finish. Yikes.
Rubbing salt in the wounds, the team lost the Europa League final in May to Tottenham Hotspur. Failure to win cost it a place in the more lucrative UEFA Champions League next season, resulting in lost revenue of about £100m.
Unprofitable enterprise
Speaking of losses, these are common for the company. In its 2023/24 fiscal year, which ended in June 2024, the club reported a net loss of £113m on revenue of £662m. More losses are expected this year after the dismal season.
But it wasn’t meant to be like this. Sir Jim Ratcliffe, through his INEOS Group, completed the acquisition of a 27.7% stake in the club in February 2024. Under his leadership, the club has implemented significant cost-cutting measures, including deep job cuts in a bid to address the financial challenges.
However, these measures have also been unpopular with many fans. In particular, the cancellation of free lunches for non-playing staff led to accusations that the soul was being ripped out of the club.
Earlier this week, the team was booed by fans in a friendly match in Malaysia. My cousin, a lifelong United fan, can’t even bring himself to watch the games anymore.
Should I buy?
In short then, the whole thing’s a bit of a mess. But could this actually be the perfect time to invest? After all, buying shares when they’re out of favour can be very lucrative, assuming things pick up and investor sentiment improves.
Part of me thinks the club will surely do better next season. Won’t it? Then again, I feel like this would be more like gambling with my money than investing. Improvement isn’t guranteed.
One big concern I have here is the balance sheet. In February, net debt stood at a whopping £636m. For context, the market-cap’s only £1.8bn.
When I pair this debt with the ongoing losses and lack of European football, I’m not very bullish on Manchester Untied shares. I think there are far better opportunities for my Stocks and Shares ISA today.
