EX-99.1 2 a15-4310_1ex99d1.htm EX-99.1

Exhibit 99.1

 

GRAPHIC

 

·    TOTAL REVENUES OF £105.7 MILLION

·    EBITDA OF £42.4 MILLION

 

MANCHESTER, England. — 12 February 2015 — Manchester United (NYSE: MANU; the “Company” and the “Group”) — one of the most popular and successful sports teams in the world - today announced financial results for the 2015 fiscal second quarter and six months ended 31 December 2014.

 

Highlights

 

·                  Commercial revenues of £46.4 million up 9.7% for the quarter.

 

·                  Two sponsorship deals announced in the quarter — Chi as official soft drinks partner in Nigeria and IVC (Aland), the Club’s first wellness partner in China.

 

·                  Domestic Premier League Live Broadcasting rights up 70% — BSkyB and BT will pay £5.14 billion for the 2017-19 EPL seasons compared to £3.0 billion for the 2014-16 seasons.

 

Commentary

 

Ed Woodward, Executive Vice Chairman commented, “The recently announced Premier League broadcasting rights package for 2017-19, representing an increase just over 70%, once again demonstrates that we are part of the top football league in the world.

 

Notwithstanding no European football this season, our Revenues and EBITDA remain strong and demonstrate the underlying strength of our business model, with commercial revenues up year over year.  On the pitch, the team is well positioned to challenge for a top four finish in the Premier League and we look forward to the rest of the season.”

 

Outlook

 

For fiscal 2015, Manchester United continues to expect:

 

·                  Revenue to be £385m to £395m.

·                  Adjusted EBITDA to be £90m to £95m.

 



 

Key Financials (unaudited)

 

£ million (except adjusted

 

Three months ended
31 December

 

 

 

Six months ended
31 December

 

 

 

diluted earnings per share)

 

2014

 

2013

 

Change

 

2014

 

2013

 

Change

 

Commercial revenue

 

46.4

 

42.3

 

9.7

%

103.2

 

102.2

 

1.0

%

Broadcasting revenue

 

28.4

 

46.9

 

(39.4

)%

45.2

 

66.2

 

(31.7

)%

Matchday revenue

 

30.9

 

33.7

 

(8.3

)%

46.0

 

53.0

 

(13.2

)%

Total revenue

 

105.7

 

122.9

 

(14.0

)%

194.4

 

221.4

 

(12.2

)%

Adjusted EBITDA*

 

42.4

 

51.0

 

(16.9

)%

62.7

 

73.2

 

(14.3

)%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Profit for the period (i.e. net income)

 

0.0

 

19.0

 

 

8.9

 

18.7

 

(52.4

)%

Adjusted profit for the period (i.e. adjusted net income)*

 

4.4

 

19.8

 

(77.8

)%

8.6

 

22.0

 

(60.9

)%

Adjusted diluted earnings per share (pence)*

 

2.66

 

12.08

 

(78.0

)%

5.25

 

13.45

 

(61.0

)%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Gross debt**

 

380.5

 

356.6

 

6.7

%

380.5

 

356.6

 

6.7

%

Cash and cash equivalents

 

37.1

 

72.1

 

(48.5

)%

37.1

 

72.1

 

(48.5

)%

 


* Adjusted EBITDA, adjusted profit for the period and adjusted diluted earnings per share are non-IFRS measures. See “Non-IFRS Measures: Definitions and Use” below and the accompanying Supplemental Notes for the definitions and reconciliations for these non-IFRS measures and the reasons we believe these measures provide useful information to investors regarding the Group’s financial condition and results of operations.

** Gross Debt increased primarily because of movements in USD/GBP from 1.6561 at 31 December 2013 to 1.5573 at 31 December 2014.

 

Revenue Analysis

 

Commercial

 

Commercial revenue for the second quarter was £46.4 million, an increase of £4.1 million, or 9.7%, over the prior year quarter.

 

·                  Sponsorship revenue for the second quarter was £35.8 million, an increase of £6.8 million, or 23.4%, over the prior year quarter, primarily due to an increase in shirt and other sponsorships.

·                  Retail, Merchandising, Apparel & Product Licensing revenue for the second quarter was £7.9 million, a decrease of £1.2 million, or 13.2% over the prior year quarter, primarily due to reduced Nike guaranteed revenue due to non-participation in the UEFA Champions League in the current season.

·                  Mobile & Content revenue for the second quarter was £2.7 million, a decrease of £1.5 million, or 35.7% over the prior year quarter, due to the expiration of a few of our mobile partnerships.

 

Broadcasting

 

Broadcasting revenue for the second quarter was £28.4 million, a decrease of £18.5 million, or 39.4%, over the prior year quarter, primarily due to non-participation in the UEFA Champions League in the current season.

 

Matchday

 

Matchday revenue for the second quarter was £30.9 million, a decrease of £2.8 million, or 8.3%, over the prior year quarter, primarily due to no home domestic cup nor UEFA Champions League matches in the current quarter.

 



 

Other Financial Information

 

Operating expenses

 

Total operating expenses for the second quarter were £93.1 million, an increase of £5.4 million, or 6.2%, over the prior year quarter.

 

Staff costs

 

Staff costs for the second quarter were £48.7 million, a decrease of £2.9 million, or 5.6%, over the prior year quarter.

 

Other operating expenses

 

Other operating expenses for the second quarter were £14.6 million, a decrease of £5.7 million, or 28.1%, over the prior year quarter, primarily due to non-participation in the UEFA Champions League and favourable movements in foreign exchange.

 

Depreciation & amortization

 

Depreciation for the second quarter was £2.6 million, an increase of £0.5 million, or 23.8%, over the prior year quarter. Amortization for the second quarter was £27.0 million, an increase of £13.6 million, or 101.5%, over the prior year quarter. The unamortized balance of players’ registrations at 31 December 2014 was £269.3 million.

 

Exceptional items

 

Exceptional items for the second quarter were £0.2 million, a decrease of £0.1 million over the prior year quarter.

 

Net finance costs

 

Net finance costs for the second quarter were £6.3 million, an increase of £0.6 million, or 10.5%, over the prior year quarter.

 

Tax

 

The tax expense for the second quarter was £7.8 million, compared to an expense of £11.3 million in the prior year quarter.

 

Cash flows

 

Net cash used in operating activities for the second quarter was £39.0 million, an increase of £35.3 million over the prior year quarter, primarily due to movements in working capital.

 

Capital expenditure on property, plant and equipment for the second quarter was £1.9 million, a decrease of £0.9 million over the prior year quarter.

 

Net player and other intangible assets capital expenditure for the second quarter was £14.2 million, an increase of £10.8 million over the prior year quarter.

 



 

Conference Call Information

 

The Company’s conference call to review second quarter fiscal 2015 results will be broadcast live over the internet today, 12 February 2015 at 8:00 a.m. Eastern Time and will be available on Manchester United’s investor relations website at http://ir.manutd.com. Thereafter, a replay of the webcast will be available for thirty days.

 

About Manchester United

 

Manchester United is one of the most popular and successful sports team in the world, playing one of the most popular spectator sports on Earth.

 

Through our 136-year heritage we have won 62 trophies, enabling us to develop the world’s leading sports brand and a global community of 659 million followers. Our large, passionate community provides Manchester United with a worldwide platform to generate significant revenue from multiple sources, including sponsorship, merchandising, product licensing, new media & mobile, broadcasting and matchday.

 

Cautionary Statement

 

This press release contains forward-looking statements. You should not place undue reliance on such statements because they are subject to numerous risks and uncertainties relating to the Company’s operations and business environment, all of which are difficult to predict and many are beyond the Company’s control. Forward-looking statements include information concerning the Company’s possible or assumed future results of operations, including descriptions of its business strategy. These statements often include words such as “may,” “might,” “will,” “could,” “would,” “should,” “expect,” “plan,” “anticipate,” “intend,” “seek,” “believe,” “estimate,” “predict,” “potential,” “continue,” “contemplate,” “possible” or similar expressions. The forward-looking statements contained in this press release are based on our current expectations and estimates of future events and trends, which affect or may affect our businesses and operations. You should understand that these statements are not guarantees of performance or results. They involve known and unknown risks, uncertainties and assumptions. Although the Company believes that these forward-looking statements are based on reasonable assumptions, you should be aware that many factors could affect its actual financial results or results of operations and could cause actual results to differ materially from those in these forward-looking statements. These factors are more fully discussed in the “Risk Factors” section and elsewhere in the Company’s Registration Statement on Form F-1, as amended (File No. 333-182535) and the Company’s Annual Report on Form 20-F (File No. 001-35627).

 



 

Non-IFRS Measures: Definitions and Use

 

1.                  Adjusted EBITDA

 

Adjusted EBITDA is defined as profit for the period before depreciation, amortization, profit on disposal of players’ registrations, exceptional items, net finance costs, and tax.

 

We believe adjusted EBITDA is useful as a measure of comparative operating performance from period to period and among companies as it is reflective of changes in pricing decisions, cost controls and other factors that affect operating performance, and it removes the effect of our asset base (primarily depreciation and amortization), capital structure (primarily finance costs), and items outside the control of our management (primarily taxes).  Adjusted EBITDA has limitations as an analytical tool, and you should not consider it in isolation, or as a substitute for an analysis of our results as reported under IFRS as issued by the IASB. A reconciliation of profit for the period to adjusted EBITDA is presented in supplemental note 2.

 

2.                  Adjusted profit for the period (i.e. adjusted net income)

 

Adjusted profit for the period is calculated, where appropriate, by adjusting for charges/credits related to exceptional items, foreign exchange gains/losses on US dollar denominated bank accounts, fair value movements on derivative financial instruments, and hedge ineffectiveness on cash flow hedges, adding/subtracting the actual tax expense/credit for the period, and subtracting the adjusted tax expense for the period (based on an normalized tax rate of 35%; 2013: 35%). The normalized tax rate of 35% is management’s estimate of the tax rate likely to be applicable to the Group in the long-term.

 

We believe that in assessing the comparative performance of the business, in order to get a clearer view of the underlying financial performance of the business, it is useful to strip out the distorting effects of charges/credits related to ‘one-off’ transactions and then to apply a ‘normalized’ tax rate (for both the current and prior periods) of the US federal income tax rate of 35%. A reconciliation of profit for the period to adjusted profit for the period is presented in supplemental note 3.

 

3.    Adjusted basic and diluted earnings per share

 

Adjusted basic and diluted earnings per share are calculated by dividing the adjusted profit for the period by the weighted average number of ordinary shares in issue during the period. Adjusted diluted earnings per share is calculated by adjusting the weighted average number of ordinary shares in issue during the period to assume conversion of all dilutive potential ordinary shares. We have one category of dilutive potential ordinary shares: share awards pursuant to the 2012 Equity Incentive Plan (the “Equity Plan”). Share awards pursuant to the Equity Plan are assumed to have been converted into ordinary shares at the beginning of the financial year. Adjusted basic and diluted earnings per share are presented in supplemental note 3.

 



 

Key Performance Indicators

 

 

 

Three months ended

 

Six months ended

 

 

 

31 December

 

31 December

 

 

 

2014

 

2013

 

2014

 

2013

 

Commercial % of total revenue

 

43.0

%

34.4

%

52.7

%

46.2

%

Broadcasting % of total revenue

 

27.3

%

38.2

%

23.4

%

29.9

%

Matchday % of total revenue

 

29.7

%

27.4

%

23.9

%

23.9

%

Home Matches Played

 

 

 

 

 

 

 

 

 

FAPL

 

7

 

6

 

10

 

9

 

UEFA competitions

 

 

2

 

 

3

 

Domestic Cups

 

 

1

 

 

2

 

Away Matches Played

 

 

 

 

 

 

 

 

 

UEFA competitions

 

 

3

 

 

3

 

Domestic Cups

 

 

1

 

1

 

1

 

 

 

 

 

 

 

 

 

 

 

Other

 

 

 

 

 

 

 

 

 

Employees at period end

 

814

 

849

 

814

 

849

 

Staff costs % of revenue

 

46.1

%

42.0

%

50.5

%

47.2

%

 

Phasing of Premier League home
games

 

Quarter 1

 

Quarter 2

 

Quarter 3

 

Quarter 4

 

Total

 

2014/15 season*

 

3

 

7

 

5

 

4

 

19

 

2013/14 season

 

3

 

6

 

7

 

3

 

19

 

2012/13 season

 

3

 

7

 

5

 

4

 

19

 

 


*Subject to changes in broadcasting scheduling

 

Contacts

 

Investor Relations:

Samanta Stewart

 +44 207 054 5928

ir@manutd.co.uk

Media: Philip Townsend

Manchester United plc

+44 161 868 8148

philip.townsend@manutd.co.uk

 

 

 

Jim Barron / Michael Henson

Sard Verbinnen & Co

+ 1 212 687 8080

JBarron@SARDVERB.com

 



 

CONSOLIDATED INCOME STATEMENT

(unaudited; in £ thousands, except per share and shares outstanding data)

 

 

 

Three months ended
 31 December

 

Six months ended
 31 December

 

 

 

2014

 

2013

 

2014

 

2013

 

Revenue

 

105,761

 

122,927

 

194,431

 

221,448

 

Operating expenses

 

(93,137

)

(87,715

)

(185,888

)

(177,923

)

Profit on disposal of players’ registrations

 

1,432

 

846

 

19,760

 

1,842

 

Operating profit

 

14,056

 

36,058

 

28,303

 

45,367

 

Finance costs

 

(6,241

)

(5,765

)

(12,477

)

(15,603

)

Finance income

 

 

48

 

99

 

107

 

Net finance costs

 

(6,241

)

(5,717

)

(12,378

)

(15,496

)

Profit before tax

 

7,815

 

30,341

 

15,925

 

29,871

 

Tax expense

 

(7,870

)

(11,301

)

(7,036

)

(11,124

)

(Loss)/profit for the period

 

(55

)

19,040

 

8,889

 

18,747

 

 

 

 

 

 

 

 

 

 

 

Basic (loss)/earnings per share:

 

 

 

 

 

 

 

 

 

Basic (loss)/earnings per share (pence)

 

(0.03

)

11.62

 

5.43

 

11.44

 

Weighted average number of ordinary shares outstanding (thousands)

 

163,797

 

163,812

 

163,792

 

163,816

 

Diluted (loss)/earnings per share:

 

 

 

 

 

 

 

 

 

Diluted (loss)/earnings per share (pence)

 

(0.03

)

11.62

 

5.42

 

11.44

 

Weighted average number of ordinary shares outstanding (thousands)

 

164,146

 

163,812

 

164,146

 

163,816

 

 



 

CONSOLIDATED BALANCE SHEET

(unaudited; in £ thousands)

 

 

 

As of
31 December
2014

 

As of
30 June
2014

 

As of
31 December
2013

 

ASSETS

 

 

 

 

 

 

 

Non-current assets

 

 

 

 

 

 

 

Property, plant and equipment

 

254,398

 

254,859

 

256,511

 

Investment property

 

13,615

 

13,671

 

13,728

 

Goodwill

 

421,453

 

421,453

 

421,453

 

Players’ registrations and other intangible assets

 

270,061

 

204,572

 

132,123

 

Derivative financial instruments

 

857

 

 

1,013

 

Trade and other receivables

 

 

41

 

141

 

Deferred tax asset

 

128,797

 

129,631

 

134,261

 

 

 

1,089,181

 

1,024,227

 

959,230

 

Current assets

 

 

 

 

 

 

 

Derivative financial instruments

 

544

 

 

201

 

Trade and other receivables

 

83,716

 

125,119

 

68,787

 

Current tax receivable

 

81

 

 

 

Cash and cash equivalents

 

37,115

 

66,365

 

72,144

 

 

 

121,456

 

191,484

 

141,132

 

Total assets

 

1,210,637

 

1,215,711

 

1,100,362

 

 



 

CONSOLIDATED BALANCE SHEET (continued)

(unaudited; in £ thousands)

 

 

 

As of
31 December
2014

 

As of
30 June
2014

 

As of
31 December
2013

 

EQUITY AND LIABILITIES

 

 

 

 

 

 

 

Equity

 

 

 

 

 

 

 

Share capital

 

52

 

52

 

52

 

Share premium

 

68,822

 

68,822

 

68,822

 

Merger reserve

 

249,030

 

249,030

 

249,030

 

Hedging reserve

 

6,185

 

25,918

 

20,483

 

Retained earnings

 

164,424

 

154,828

 

149,139

 

 

 

488,513

 

498,650

 

487,526

 

Non-current liabilities

 

 

 

 

 

 

 

Derivative financial instruments

 

1,612

 

1,602

 

1,864

 

Trade and other payables

 

47,181

 

42,464

 

14,829

 

Borrowings

 

374,034

 

326,803

 

341,121

 

Deferred revenue

 

14,260

 

15,631

 

12,828

 

Deferred tax liabilities

 

24,085

 

28,837

 

22,184

 

 

 

461,172

 

415,337

 

392,826

 

Current liabilities

 

 

 

 

 

 

 

Derivative financial instruments

 

617

 

875

 

1,048

 

Current tax liabilities

 

2,399

 

2,999

 

5,813

 

Trade and other payables

 

123,058

 

102,232

 

67,221

 

Borrowings

 

6,447

 

15,005

 

15,438

 

Deferred revenue

 

128,431

 

180,613

 

130,490

 

 

 

260,952

 

301,724

 

220,010

 

Total equity and liabilities

 

1,210,637

 

1,215,711

 

1,100,362

 

 



 

CONSOLIDATED STATEMENT OF CASH FLOWS

(unaudited; in £ thousands)

 

 

 

Three months ended
31 December

 

Six months ended
31 December

 

 

 

2014

 

2013

 

2014

 

2013

 

Cash flows from operating activities

 

 

 

 

 

 

 

 

 

Cash (used in)/generated from operations (see supplemental note 4)

 

(34,421

)

1,893

 

48,921

 

34,663

 

Interest paid

 

(4,500

)

(4,818

)

(13,229

)

(13,964

)

Debt finance costs relating to borrowings

 

42

 

(104

)

(824

)

(123

)

Interest received

 

40

 

48

 

89

 

107

 

Income tax paid

 

(123

)

(759

)

(1,010

)

(1,246

)

Net cash (used in)/generated from operating activities

 

(38,962

)

(3,740

)

33,947

 

19,437

 

Cash flows from investing activities

 

 

 

 

 

 

 

 

 

Purchases of property, plant and equipment

 

(1,851

)

(2,785

)

(3,793

)

(6,878

)

Proceeds from sale of property, plant and equipment

 

 

50

 

 

50

 

Purchases of players’ registrations and other intangible assets

 

(15,564

)

(3,837

)

(86,866

)

(37,287

)

Proceeds from sale of players’ registrations

 

1,273

 

401

 

16,716

 

7,056

 

Net cash used in investing activities

 

(16,142

)

(6,171

)

(73,943

)

(37,059

)

Cash flows from financing activities

 

 

 

 

 

 

 

 

 

Proceeds from borrowings

 

 

 

4,704

 

 

Repayment of borrowings

 

(102

)

(96

)

(199

)

(187

)

Net cash (used in)/generated from financing activities

 

(102

)

(96

)

4,505

 

(187

)

Net decrease in cash and cash equivalents

 

(55,206

)

(10,007

)

(35,491

)

(17,809

)

Cash and cash equivalents at beginning of period

 

90,266

 

83,602

 

66,365

 

94,433

 

Foreign exchange gains/(losses) on cash and cash equivalents

 

2,055

 

(1,451

)

6,241

 

(4,480

)

Cash and cash equivalents at end of period

 

37,115

 

72,144

 

37,115

 

72,144

 

 



 

SUPPLEMENTAL NOTES

 

1                 General information

 

Manchester United plc (the “Company”) and its subsidiaries (together the “Group”) is a professional football club together with related and ancillary activities. The Company incorporated under the Companies Law (2011 Revision) of the Cayman Islands, as amended and restated from time to time.

 

2                 Reconciliation of profit for the period to adjusted EBITDA

 

 

 

Three months ended
 31 December

 

Six months ended
 31 December

 

 

 

2014
£’000

 

2013
£’000

 

2014
£’000

 

2013
£’000

 

(Loss)/profit for the period

 

(55

)

19,040

 

8,889

 

18,747

 

Adjustments:

 

 

 

 

 

 

 

 

 

Tax expense

 

7,870

 

11,301

 

7,036

 

11,124

 

Net finance costs

 

6,241

 

5,717

 

12,378

 

15,496

 

Profit on disposal of players’ registrations

 

(1,432

)

(846

)

(19,760

)

(1,842

)

Exceptional items

 

185

 

293

 

1,061

 

293

 

Amortization

 

27,046

 

13,418

 

48,223

 

25,322

 

Depreciation

 

2,560

 

2,085

 

4,896

 

4,068

 

Adjusted EBITDA

 

42,415

 

51,008

 

62,723

 

73,208

 

 



 

3                 Reconciliation of profit for the period to adjusted profit for the period and adjusted basic and diluted earnings per share

 

 

 

Three months ended
 31 December

 

Six months ended
 31 December

 

 

 

2014
£’000

 

2013
£’000

 

2014
£’000

 

2013
£’000

 

(Loss)/profit for the period

 

(55

)

19,040

 

8,889

 

18,747

 

Exceptional items

 

185

 

 

1,061

 

 

Foreign exchange (gains)/losses on US dollar denominated bank accounts

 

(303

)

(317

)

(998

)

2,712

 

Fair value movement on derivative financial instruments

 

(1,185

)

666

 

(2,486

)

1,550

 

Hedge ineffectiveness of cash flow hedges

 

201

 

(248

)

(234

)

(248

)

Tax expense

 

7,870

 

11,301

 

7,036

 

11,124

 

Adjusted profit before tax

 

6,713

 

30,442

 

13,268

 

33,885

 

Adjusted tax expense (using a normalised tax rate of 35% (2013: 35%))

 

(2,350

)

(10,655

)

(4,644

)

(11,860

)

Adjusted profit for the period (i.e. adjusted net income)

 

4,363

 

19,787

 

8,624

 

22,025

 

 

 

 

 

 

 

 

 

 

 

Adjusted basic earnings per share:

 

 

 

 

 

 

 

 

 

Adjusted basic earnings per share (pence)

 

2.66

 

12.08

 

5.27

 

13.45

 

Weighted average number of ordinary shares outstanding (thousands)

 

163,797

 

163,812

 

163,792

 

163,816

 

Adjusted diluted earnings per share:

 

 

 

 

 

 

 

 

 

Adjusted diluted earnings per share (pence)

 

2.66

 

12.08

 

5.25

 

13.45

 

Weighted average number of ordinary shares outstanding (thousands)

 

164,146

 

163,812

 

164,146

 

163,816

 

 



 

4                 Cash generated from operations

 

 

 

Three months ended
 31 December

 

Six months ended
 31 December

 

 

 

2014
£’000

 

2013
£’000

 

2014
£’000

 

2013
£’000

 

(Loss)/profit for the period

 

(55

)

19,040

 

8,889

 

18,747

 

Tax expense

 

7,870

 

11,301

 

7,036

 

11,124

 

Profit before tax

 

7,815

 

30,341

 

15,925

 

29,871

 

Depreciation

 

2,560

 

2,085

 

4,896

 

4,068

 

Impairment

 

 

293

 

 

293

 

Amortization

 

27,046

 

13,418

 

48,223

 

25,322

 

Profit on disposal of players’ registrations

 

(1,432

)

(846

)

(19,760

)

(1,842

)

Net finance costs

 

6,241

 

5,717

 

12,378

 

15,496

 

Loss/(profit) on disposal of property, plant and equipment

 

1

 

(43

)

5

 

(43

)

Equity-settled share-based payments

 

377

 

158

 

707

 

541

 

Foreign exchange (gains)/losses on operating activities

 

(329

)

372

 

(968

)

372

 

Other fair value losses/(gains) on derivative financial instruments

 

577

 

34

 

1,211

 

(126

)

Reclassified from hedging reserve

 

(1,196

)

(330

)

(2,391

)

(518

)

(Increase)/decrease in trade and other receivables

 

(12,110

)

(3,951

)

52,398

 

(3,941

)

Decrease in trade and other payables and deferred revenue

 

(63,971

)

(44,040

)

(63,703

)

(33,355

)

Decrease in provisions

 

 

(1,315

)

 

(1,475

)

Cash (used in)/generated from operations

 

(34,421

)

1,893

 

48,921

 

34,663