EX-99.1 2 tm2226152d1_ex99-1.htm EXHIBIT 99.1

Exhibit 99.1

 

 

CORPORATE RELEASE 22 September 2022

 

Manchester United PLC Reports Fourth Quarter

and Full Year Fiscal 2022 Results

 

Key Points

 

·Under leadership of new manager Erik ten Hag, strengthened the men’s first team with the summer recruitment of Antony, Casemiro, Christian Eriksen, Lisandro Martinez, Tyrell Malacia, and Martin Dubravka on loan
·Strengthened the Women’s team with the addition of seven new players
·Normal summer Tour activities resumed in July 2022 with over 350,000 fans in attendance
·Achieved record e-commerce revenues, memberships, and digital engagements in FY22
·Launched three new principal partnerships, signed five new global partners and eight global renewals in FY22
·For the full year fiscal 2023, the Company expects total revenues to be in a range of £580 million to £600 million and adjusted EBITDA to be in a range of £100 million to £110 million

 

MANCHESTER, England. – 22 September 2022 – 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 2022 fiscal fourth quarter and twelve months ended 30 June 2022.

 

Management Commentary

 

Richard Arnold, Chief Executive Officer, commented, “Our club’s core mission is to win football matches and entertain our fans. Since our last earnings report, we have strengthened our men’s first team squad, completed a successful summer tour, and established a foundation to build from in the early stages of the 2022/23 season under our new manager Erik ten Hag. We have also continued to develop our women’s team with an aim of reinforcing our position among the leading clubs in the Women’s Super League.

 

“Ultimately, we know that the strength of Manchester United rests on the passion and loyalty of our fans, which is why we have made fan engagement a strategic priority. While there is a lot more work to do, everyone at the club is aligned on a clear strategy to deliver sustained success on the pitch and a sustainable economic model off it, to the mutual benefit of fans, shareholders, and other stakeholders.”

 

 1

 

 

Cliff Baty, Chief Financial Officer, commented, “Our financial results for fiscal 2022 reflect a recovery from the pandemic, a full return of fans and new commercial partnerships offset by increased investment in the playing squad. Our results have been adversely affected by the absence of a summer tour in July 2021, material exceptional and increased utility costs, and the impact of the weakening of sterling on our non-cash finance costs. Looking forward to fiscal 2023, the Club is guiding to revenues of £580 million to £600 million despite participation in the Europa League, and adjusted EBITDA of £100 million to £110 million, reflecting the continued playing squad investment.”

 

Football

 

We have achieved a series of milestones in the strengthening of our football operations during fiscal 2022, including:

 

·Appointment of Erik ten Hag as manager in May 2022
·Recruitment of five regular starters for the Men’s first team and seven new players for the Women’s team
·Manchester United Women finished fourth in the 2021/22 Women’s Super League
·Three Manchester United players featured in the England team which won the UEFA Women’s European Championship in July, and a fourth joined the club after the tournament
·Men’s Academy Under-18s team won the FA Youth Cup at Old Trafford for a record 11th time, in front of over 67,000 fans; the women’s Under-21s won the FA WSL Academy League title and the WSL Academy Cup
·August 2022 marked 90 years since the inception of Manchester United’s Youth Development programme and we continue to extend our record of having an Academy graduate in every first team squad since 1937, spanning over 4,150 games
·Ongoing strengthening of our scouting and recruitment operations, including the hiring of a new Director of Data Science, and investment in ongoing upgrades of our Carrington training ground

 

Fan Engagement

 

Strengthening engagement with fans is a key strategic priority, and includes the following initiatives:

 

·Since its inception in January, the Club held two quarterly meetings of our Fans’ Advisory Board, a new channel for board-level dialogue between fan representatives and the club, with each meeting attended by Chairman Joel Glazer
·The Premier League introduced a Fan Engagement Standard which extends the current cap on away ticket prices and mandates the introduction of Fan Advisory Boards by all clubs
·General Admission Season Ticket prices were kept frozen for an 11th season
·Reformed season ticket policies to give fans more choice and flexibility in the purchase of Cup tickets
·Appointed the club’s first Head of Fan Engagement

 

Facilities - Venue and Operations

 

In addition to record ticket sales for the 2022/23 season, Venue and Operations further achieved:

 

·Record number of global memberships sold including sell-out of a new Premium Membership tier
·Record number of Executive Club renewals with the fastest sell-out ever at record revenue levels
·A 55% increase in Women’s season tickets sold for the upcoming season
·A return to normal pre-season Tour operations which generated record Tour revenues with over 350,000 fans in attendance across three continents, four countries and five cities
·Old Trafford will also host the Rugby League World Cup final in November 2022 and a third Women’s Super League fixture against Aston Villa in December 2022

 

 2

 

 

Partnerships

 

A strong year of new or renewed partnership deals included:

 

·Launched three new principal partnerships
·Signed five new global partnerships
·Renewed eight global and regional partnerships
·Club held its first in person #ILoveUnited event since the onset of the pandemic in Miami in April 2022 with more than 2,000 fans in attendance featuring activations from 22 global partners

 

Digital Products & Experiences

 

Content-led digital fan engagement continues to connect our club with our fans around the world and contributed to record e-commerce sales. Other digital initiatives completed, or in progress, include:

 

·Club achieved record e-commerce revenue for fiscal 2022 at nearly double fiscal 2021 revenues
·Launch of an upgraded Club app, fully integrated with MUTV content; achieved a record number of subscriptions, registrations, and daily active users and was the number one downloaded sports app in over 100 markets
·Over 2.5 million app users watched Tour match content via our Club app across 220 markets contributing to record breaking engagement and video views
·Club generated more than 2.8 billion digital interactions (up 72% vs. fiscal 2021) and 7.3 billion video views across all global platforms earning the distinction of most engaging sports team for the 2021/22 season
·Momentum continues into fiscal 2023 as club achieved record first week e-commerce sales for the new 2022/23 home and away kit launches
·Creation of new Digital Products & Experiences department to drive innovation and new revenue streams in areas such as NFTs, among other new initiatives

 

Industry Developments and Governance

 

There have been several significant developments in football governance, including reform of:

 

·UEFA Financial Sustainability rules, effective July 2022, which will ultimately include a 70% cap on men’s squad costs
·FIFA’s Football Agent Regulations
·UEFA club competition format and access criteria post-2024, which will increase the number of matches in the league phase of the Champions League to eight matches and will provide an additional two places in the expanded Champions League to the country associations with the best collective performance by their clubs in the previous season.

 

 3

 

 

Key Financials (unaudited)

 

  

Twelve months ended

30 June

      

Three months ended

30 June

     
£ million (except loss per share)  2022   2021   Change   2022   2021   Change 
Commercial revenue   257.8    232.2    11.0%   63.4    51.8    22.4%
Broadcasting revenue   214.9    254.8    (15.7)%   33.7    39.9    (15.5)%
Matchday revenue   110.5    7.1    1456.3%   21.4    2.3    830.4%
Total revenue   583.2    494.1    18.0%   118.5    94.0    26.1%
Adjusted EBITDA(1)   81.1    95.1    (14.7)%   (8.4)   (10.5)   20.0%
Operating loss   (87.4)   (36.9)   136.9%   (60.7)   (36.7)   65.4%
Loss for the period (i.e. net loss)   (115.5)   (92.2)   25.3%   (70.7)   (107.7)   (34.4)%
Basic loss per share (pence)   (70.86)   (56.60)   25.2%   (43.46)   (66.08)   (34.2)%
Adjusted loss for the period (i.e. adjusted net loss)(1)   (34.0)   (44.7)   (23.9)%   (20.2)   (33.7)   (40.1)%
Adjusted basic loss per share (pence)(1)   (20.83)   (27.41)   (24.0)%   (12.38)   (20.67)   (40.1)%
Non-current and current borrowings   636.1    530.2    20.0%   636.1    530.2    20.0%
Cash and cash equivalents   121.2    110.7    9.5%   121.2    110.7    9.5%
Net debt(1)/(2)   514.9    419.5    22.7%   514.9    419.5    22.7%

 

(1) Adjusted EBITDA, adjusted loss for the period, adjusted basic loss per share and net debt are non-IFRS measures. See “Non-IFRS Measures: Definitions and Use” on page 8 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.

 

(2) The gross USD debt principal remains unchanged. Non-current and current borrowings and cash and cash equivalents as at 30 June 2022 reflect the impact of a £100.0 million drawdown on our revolving facilities. The increase in net debt is primarily due to £64.6 million of unrealized foreign exchange losses on retranslation of USD borrowings plus a further £40.0 million drawdown on our revolving facilities, partially offset by a £10.5 million increase in cash and cash equivalents.

 

 4

 

 

Outlook

 

For fiscal 2023, the company expects total revenues to be in a range of £580 million to £600 million, despite participation in the Europa League, and adjusted EBITDA to be in a range of £100 million to £110 million, reflecting the continued playing squad investment. Further, quarterly results will be impacted by the postponement of two matches which were delayed due to a period of mourning after the Queen’s passing and have yet to be rescheduled, as well as the timing of the 2022 FIFA World Cup, which will begin late-November and continue through late December.

 

Phasing of Premier League games  Quarter 1   Quarter 2   Quarter 3   Quarter 4   Total 
2022/23 season   8*    10    10    10    38 
2021/22 season   6    12    11    9    38 

 

 

*Note: Two matches scheduled in September 2022 were postponed

 

Revenue Analysis

 

Commercial

 

Commercial revenue for the year was £257.8 million, an increase of £25.6 million, or 11.0%, over the prior year.

 

·Sponsorship revenue was £147.9 million, an increase of £7.7 million, or 5.5%, over the prior year, primarily due to the impact of new sponsorship agreements. The prior year was affected by COVID-19 related variations; and

 

·Retail, Merchandising, Apparel & Product Licensing revenue was £109.9 million, an increase of £17.9 million, or 19.5%, over the prior year, primarily due to the closure of the Megastore in the prior year and the return of fans in the current year.

 

For the quarter, commercial revenue was £63.4 million, an increase of £11.6 million, or 22.4%, over the prior year quarter.

 

·Sponsorship revenue was £37.2 million, an increase of £7.1 million, or 23.6% over the prior year quarter, primarily due to the impact of new sponsorship agreements; and

 

·Retail, Merchandising, Apparel & Product Licensing revenue was £26.2 million, an increase of £4.5 million, or 20.7%, over the prior year quarter, primarily due to the return of fans and increased marketing activity.

 

Broadcasting

 

Broadcasting revenue for the year was £214.9 million, a decrease of £39.9 million, or 15.7%, over the prior year, primarily due to playing twenty-two fewer home and away games across all competitions compared to the prior year.

 

Broadcasting revenue for the quarter was £33.7 million, a decrease of £6.2 million, or 15.5%, over the prior year quarter, primarily due to playing five fewer home and away games across all competitions and the impact of our men’s first team finishing 6th in the Premier League compared to 2nd in the prior year.

 

 5

 

 

Matchday

 

Matchday revenue for the year was £110.5 million, an increase of £103.4 million, or 1456.3%, over the prior year, due to the return of fans to Old Trafford. In the prior year, all matches prior to the final home match of the season were played behind closed doors due to COVID-19 restrictions.

 

Matchday revenue for the quarter was £21.4 million, an increase of £19.1 million, or 830.4%, over the prior year quarter, due to the return of fans to Old Trafford.

 

Other Financial Information

 

Operating expenses

 

Total operating expenses for the year were £692.6 million, an increase of £154.2 million, or 28.6%, over the prior year.

 

Employee benefit expenses

 

Employee benefit expenses for the year were £384.2 million, an increase of £61.6 million, or 19.1%, over the prior year, due to investment in the first team playing squad.

 

Other operating expenses

 

Other operating expenses for the year were £117.9 million, an increase of £41.5 million, or 54.3%, over the prior year. This includes the impact of all home games being played in front of a full capacity crowd and costs related to the increased activity at the Old Trafford Megastore. In the prior year, all but one home game were played behind closed doors.

 

Depreciation, impairment and amortization

 

Depreciation and impairment for the year was £14.3 million, a decrease of £0.7 million, or 4.7%, over the prior year. Amortization for the year was £151.5 million, an increase of £27.1 million, or 21.8%, over the prior year. The unamortized balance of registrations at 30 June 2022 was £316.2 million.

 

Exceptional items

 

Exceptional items for the year were a cost of £24.7 million. This cost includes compensation due to former men’s first team managers, certain members of the playing, coaching and scouting staff, and certain non-playing staff. The cost also includes additional contributions we expect to pay towards the Football League pension scheme deficit based upon the latest actuarial valuation. Exceptional items for the prior year were £nil.

 

Profit on disposal of intangible assets

 

Profit on disposal of intangible assets for the year was £21.9 million, compared to £7.4 million for the prior year.

 

Net finance (costs)/income

 

Net finance costs for the year were £62.2 million, compared to net finance income of £12.9 million for the prior year, an unfavorable movement of £75.1 million, primarily due to an unfavorable swing in foreign exchange rates resulting in unrealized foreign exchange losses on unhedged USD borrowings in the current year compared to unrealized foreign exchange gains in the prior year.

 

 6

 

 

Income tax

 

The income tax credit for the year was £34.1 million, compared to an expense of £68.2 million in the prior year. The credit in the year is primarily a result of deferred tax assets recognised in respect of losses arising in the year. The prior year expense arose from the write off of US deferred tax assets.

 

Cash flows

 

Overall cash and cash equivalents (including the effects of exchange rate movements) increased by £10.6 million in the year, compared to an increase of £59.2 million in the prior year.

 

Net cash inflow from operating activities for the year was £96.4 million, a decrease of £16.7 million compared to a net cash inflow of £113.1 million for the prior year. This is primarily due to reduced broadcasting revenues as a result of fewer games played in the year, partially offset by the return of fans to Old Trafford.

 

Net capital expenditure on property, plant and equipment for the year was £8.3 million, an increase of £2.1 million over the prior year.

 

Net capital expenditure on intangible assets for the year was £85.1 million, a decrease of £7.1 million over the prior year.

 

Net cash inflow from financing activities for the year was £5.0 million, compared to net cash inflow of £47.6 million in the prior year. Current year cash inflow includes a drawdown of £40.0 million on our revolving facilities, net of dividends paid of £33.6 million.

 

Net debt

 

Net Debt as of 30 June 2022 was £514.9 million, compared to £419.5 million as of 30 June 2021, an increase of £95.4 million primarily due to £64.6 million of unrealized foreign exchange losses on retranslation of USD borrowings in addition to a further drawdown on our revolving facilities of £40.0 million, partially offset by a £10.5 million increase in cash and cash equivalents.

 

 7

 

 

Conference Call Details

 

The Company’s conference call to review fiscal 2022 and fourth quarter results will be broadcast live over the internet today, 22 September 2022 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 teams in the world, playing one of the most popular spectator sports on Earth. Through our 144-year football heritage we have won 66 trophies, enabling us to develop what we believe is one of the world’s leading sports and entertainment brands with a global community of 1.1 billion fans and followers. Our large, passionate and highly engaged fan base provides Manchester United with a worldwide platform to generate significant revenue from multiple sources, including sponsorship, merchandising, product licensing, broadcasting and matchday initiatives which in turn, directly fund our ability to continuously reinvest in the club.

 

Cautionary Statements

 

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 certain expectations and uncertainties related to the COVID-19 pandemic and 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) as supplemented by the risk factors contained in the Company’s other filings with the Securities and Exchange Commission.

 

Statement Regarding Unaudited Financial Information

 

The unaudited financial information set forth is preliminary and subject to adjustments. The audit of the financial statements and related notes to be included in our annual report on Form 20-F for the year ended 30 June 2022 is still in progress. Adjustments to the financial statements may be identified when audit work is completed, which could result in significant differences from this preliminary unaudited financial information.

 

 8

 

 

Non-IFRS Measures: Definitions and Use

 

1.Adjusted EBITDA

 

Adjusted EBITDA is defined as profit/(loss) for the period before depreciation and impairment, amortization, profit on disposal of intangible assets, net finance costs/income, exceptional items and tax.

 

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, impairment and amortization), material volatile items (primarily profit on disposal of intangible assets), capital structure (primarily finance income/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 loss/profit for the period to adjusted EBITDA is presented in supplemental note 2.

 

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

 

Adjusted loss for the period is calculated, where appropriate, by adjusting for charges/credits related to exceptional items, foreign exchange gains/losses on unhedged US dollar denominated borrowings (including foreign exchange losses immediately reclassified from the hedging reserve following change in contract currency denomination of future revenues), and fair value movements on embedded foreign exchange derivatives and foreign currency options, adding/subtracting the actual tax expense/credit for the period, and subtracting/adding the adjusted tax expense/credit for the period (based on a normalized tax rate of 21%; 2021: 21%). The normalized tax rate of 21% is the current US federal corporate income tax rate.

 

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 the items referred to above and then to apply a ‘normalized’ tax rate (for both the current and prior periods) of the weighted average US federal corporate income tax rate of 21% (2021: 21%) applicable during the financial year. A reconciliation of loss for the period to adjusted loss for the period is presented in supplemental note 3.

 

3.Adjusted basic and diluted loss per share

 

Adjusted basic and diluted loss per share are calculated by dividing the adjusted loss for the period by the weighted average number of ordinary shares in issue during the period. Adjusted diluted loss 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. There is 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 loss per share are presented in supplemental note 3.

 

4.Net debt

 

Net debt is calculated as non-current and current borrowings minus cash and cash equivalents.

 

 9

 

 

Key Performance Indicators

 

 

  

Twelve months ended

30 June

  

Three months ended

30 June

 
   2022   2021   2022   2021 
Revenue                
Commercial % of total revenue   44.2%   47.0%   53.5%   55.1%
Broadcasting % of total revenue   36.8%   51.6%   28.4%   42.5%
Matchday % of total revenue   19.0%   1.4%   18.1%   2.4%

 

  

 

2021/22
Season

   2020/21
Season		   Carryover
2019/20
Season		  

2021/22
Season

   2020/21
Season		 
Home Matches Played                         
PL   19    19    3    4    5 
UEFA competitions   4    7    1    -    2 
Domestic Cups   3    4    -    -    - 
Away Matches Played                         
PL   19    19    3    5    4 
UEFA competitions   4    8    2    -    3 
Domestic Cups   -    4    1    -    - 
                          
Other                         
Employees at period end   1,068    971    1,068    971 
Employee benefit expenses % of revenue   65.9%   65.3%    81.1%   89.1%

 

Contacts

  
   

Investor Relations:

Corinna Freedman

Head of Investor Relations

+44 738 491 0828

Corinna.Freedman@manutd.co.uk

Media Relations:

Andrew Ward

Head of Media Relations & Public Affairs

+44 161 676 7770

andrew.ward@manutd.co.uk

 

 10

 

 

CONSOLIDATED STATEMENT OF PROFIT OR LOSS

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

 

  

Twelve months ended

30 June

  

Three months ended

30 June

 
   2022   2021   2022   2021 
Revenue from contracts with customers   583,201    494,117    118,452    94,009 
Operating expenses   (692,520)   (538,424)   (183,330)   (137,848)
Profit on disposal of intangible assets   21,935    7,381    4,056    7,122 
Operating loss   (87,384)   (36,926)   (60,822)   (36,717)
Finance costs   (85,915)   (36,411)   (46,053)   (6,619)
Finance income   23,676    49,310    15,048    1,235 
Net finance (costs)/income   (62,239)   12,899    (31,005)   (5,384)
Loss before tax   (149,623)   (24,027)   (91,827)   (42,101)
Income tax credit/(expense)   34,113    (68,189)   20,985    (65,562)
Loss for the period   (115,510)   (92,216)   (70,842)   (107,663)
                     
Basic and diluted loss per share:                    
Basic and diluted loss per share (pence) (1)   (70.86)   (56.60)   (43.46)   (66.08)
Weighted average number of ordinary shares used as the denominator in calculating basic and diluted loss per share (thousands) (1)   163,001    162,939    163,003    162,939 

 

(1) For the twelve and three months ended 30 June 2022 and the twelve and three months ended 30 June 2021, potential ordinary shares are anti-dilutive, as their inclusion in the diluted loss per share calculation would reduce the loss per share, and hence have been excluded.

 

 11

 

 

CONSOLIDATED BALANCE SHEET

(unaudited; in £ thousands)

 

   As of 30 June 
   2022   2021 
ASSETS          
Non-current assets          
Property, plant and equipment   242,661    247,059 
Right-of-use assets   4,072    4,383 
Investment properties   20,273    20,553 
Intangible assets   743,278    754,467 
Trade receivables   29,757    20,404 
Derivative financial instruments   16,462    499 
    1,056,503    1,047,365 
Current assets          
Inventories   2,200    2,080 
Prepayments   15,534    7,407 
Contract assets – accrued revenue   36,239    40,544 
Trade receivables   49,210    50,370 
Other receivables   1,569    460 
Income tax receivable   4,590    1,108 
Derivative financial instruments   6,597    318 
Cash and cash equivalents   121,223    110,658 
    237,162    212,945 
Total assets   1,293,665    1,260,310 

 

 12

 

 

CONSOLIDATED BALANCE SHEET (continued)

(unaudited; in £ thousands)

 

   As of 30 June 
   2022   2021 
EQUITY AND LIABILITIES          
Equity          
Share capital   53    53 
Share premium   68,822    68,822 
Treasury shares   (21,305)   (21,305)
Merger reserve   249,030    249,030 
Hedging reserve   950    (10,436)
Retained (deficit)/earnings   (170,042)   (13,652)
    127,508    272,512 
Non-current liabilities          
Deferred tax liabilities   7,402    35,546 
Contract liabilities - deferred revenue   16,697    22,942 
Trade and other payables   102,347    67,517 
Borrowings   530,365    465,049 
Lease liabilities   2,869    3,083 
Derivative financial instruments   49    5,472 
Provisions   11,586    4,157 
    671,315    603,766 
Current liabilities          
Contract liabilities - deferred revenue   165,847    117,984 
Trade and other payables   220,587    192,661 
Income tax liabilities   -    6,036 
Borrowings   105,757    65,187 
Lease liabilities   1,561    1,257 
Derivative financial instruments   32    262 
Provisions   1,058    645 
    494,842    384,032 
Total equity and liabilities   1,293,665    1,260,310 

 

 13

 

 

CONSOLIDATED STATEMENT OF CASH FLOWS

(unaudited; in £ thousands)

 

   Twelve months ended
30 June		   Three months ended
30 June		 
   2022   2021   2022   2021 
Cash flows from operating activities                    
Cash generated from operations (see supplemental note 4)   121,704    137,778    43,876    27,614 
Interest paid   (20,642)   (20,542)   (2,405)   (1,680)
Interest received   145    3    140    1 
Tax paid   (4,836)   (4,156)   (489)   (1,128)
Net cash inflow from operating activities   96,371    113,083    41,122    24,807 
Cash flows from investing activities                    
Payments for property, plant and equipment   (8,323)   (6,241)   (2,100)   (1,301)
Payments for intangible assets   (115,415)   (138,189)   (14,081)   (11,629)
Proceeds from sale of intangible assets   30,307    45,996    10,066    13,916 
Payments for derivative financial assets   -    (939)   -    - 
Net cash (outflow)/inflow from investing activities   (93,431)   (99,373)   (6,115)   986 
Cash flows from financing activities                    
Proceeds from borrowings   40,000    60,000    -    - 
Principal elements of lease payments   (1,407)   (1,641)   (123)   (410)
Dividends paid   (33,553)   (10,718)   (11,992)   - 
Net cash inflow/(outflow) from financing activities   5,040    47,641    (12,115)   (410)
Net increase in cash and cash equivalents   7,980    61,351    22,892    25,383 
Cash and cash equivalents at beginning of period   110,658    51,539    95,791    84,715 
Effects of exchange rate changes on cash and cash equivalents   2,585    (2,232)   2,540    560 
Cash and cash equivalents at end of period   121,223    110,658    121,223    110,658 

 

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SUPPLEMENTAL NOTES

 

1General information

 

Manchester United plc (the “Company”) and its subsidiaries (together the “Group”) is a men’s and women’s professional football club together with related and ancillary activities. The Company incorporated under the Companies Law (as amended) of the Cayman Islands.

 

2Reconciliation of loss for the period to adjusted EBITDA

 

    Twelve months ended
30 June		     Three months ended
30 June		  
    2022
£’000		     2021
£’000		     2022
£’000		     2021
£’000		  
Loss for the period     (115,510 )     (92,216 )     (70,842 )     (107,663 )
Adjustments:                                
Income tax (credit)/expense     (34,113 )     68,189       (20,985 )     65,562  
Net finance costs/(income)     62,239       (12,899 )     31,005       5,384  
Profit on disposal of intangible assets     (21,935 )     (7,381 )     (4,056 )     (7,122 )
Exceptional items     24,692       -       14,700       -  
Amortization     151,462       124,398       38,231       29,668  
Depreciation and impairment     14,314       14,959       3,523       3,715  
Adjusted EBITDA     81,149       95,050       (8,424 )     (10,456 )

 

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

 

   Twelve months ended
30 June		   Three months ended
30 June		 
   2022
£’000		   2021
£’000		   2022
£’000		   2021
£’000		 
Loss for the period   (115,510)   (92,216)   (70,842)   (107,663)
Exceptional items   24,692    -    14,700    - 
Foreign exchange losses/(gains) on unhedged US dollar denominated borrowings   58,738    (48,015)   37,076    (1,060)
Foreign exchange losses immediately reclassified from the hedging reserve following change in contract currency denomination of future revenues   -    14,631    -    - 
Fair value movement on embedded foreign exchange derivatives   23,205    881    14,503    520 
Income tax (credit)/expense   (34,113)   68,189    (20,985)   65,562 
Adjusted loss before tax   (42,988)   (56,530)   (25,548)   (42,641)
Adjusted income tax credit (using a normalized tax rate of 21% (2021: 21%))   9,027    11,871    5,365    8,955 
Adjusted loss for the period (i.e. adjusted net loss)   (33,961)   (44,659)   (20,183)   (33,686)
                     
Adjusted basic and diluted loss per share:                    
Adjusted basic and diluted loss per share (pence)(1)   (20.83)   (27.41)   (12.38)   (20.67)
Weighted average number of ordinary shares used as the denominator in calculating adjusted basic and diluted loss per share (thousands) (1)   163,001    162,939    163,003    162,939 

 

(1) For the twelve and three months ended 30 June 2022 and the twelve and three months ended 30 June 2021 potential ordinary shares are anti-dilutive, as their inclusion in the diluted loss per share calculation would reduce the loss per share, and hence have been excluded.

 

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4Cash generated from operations

 

   Twelve months ended
30 June		   Three months ended
30 June		 
   2022
£’000		   2021
£’000		   2022
£’000		   2021
£’000		 
Loss for the period   (115,510)   (92,216)   (70,842)   (107,663)
Income tax (credit)/expense   (34,113)   68,189    (20,985)   65,562 
Loss before income tax   (149,623)   (24,027)   (91,827)   (42,101)
Adjustments for:                    
Depreciation and impairment   14,314    14,959    3,523    3,715 
Amortization   151,462    124,398    38,231    29,668 
Profit on disposal of intangible assets   (21,935)   (7,381)   (4,056)   (7,122)
Net finance costs/(income)   62,239    (12,899)   31,005    5,384 
Non-cash employee benefit expense - equity-settled share-based payments   198    2,085    (1,291)   (159)
Foreign exchange losses on operating activities   50    874    356    105 
Reclassified from hedging reserve   (672)   2,239    (481)   2,063 
Changes in working capital:                    
Inventories   (120)   106    492    283 
Prepayments   (8,825)   (282)   (3,983)   5,026 
Contract assets – accrued revenue   4,305    5,422    16,882    9,735 
Trade receivables   (520)   71,695    8,120    (18,121)
Other receivables   (1,109)   (221)   (537)   1,023 
Contract liabilities – deferred revenue   41,618    (49,407)   23,440    20,881 
Trade and other payables   22,480    5,415    17,170    12,432 
Provisions   7,842    4,802    6,832    4,802 
Cash generated from operations   121,704    137,778    43,876    27,614 

 

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