Key Points
- Club announced the completion of the minority investment by
Sir Jim Ratcliffe which includes an additional $300 million of
primary investment, $200 million of which was received upon
completion
- Club announced the appointment of Omar Berrada as
CEO
- Club achieved record 2Q revenues of £225.8 million driven
primarily by UEFA Champions League participation benefit and
continued strong Matchday momentum with record attendance for all
teams
- Both the Men and Women’s first teams advanced to the
quarterfinals of the Men and Women’s FA Cup competitions with
matches scheduled for mid-March
- The Men’s first team loaned out a total of 11 players in the
January transfer window, while the Women’s team loaned out two
players
- Club announced a new partnership with SCAYLE to provide a
best-in-class e-commerce experience beginning Fiscal 2025
- On 8 March, the Club announced the creation of a task force
to explore options for stadium development at Old Trafford and
regeneration of the surrounding area
- Club announced a return to the USA for Summer Tour 2024 with
matches scheduled for Los Angeles, California on 27 July and
Columbia, South Carolina on 3 August with an additional US match to
be announced
Manchester United (NYSE: MANU; the “Company,” the “Group” and
the “Club”) – one of the most popular and successful sports teams
in the world – today announced financial results for the 2024
fiscal second quarter ended 31 December 2023.
Cliff Baty, Chief Financial Officer, said: “We delivered strong
revenues during the first half of the fiscal year and have
reiterated our guidance for record revenues for the full fiscal
year. This is an exciting time at Manchester United following the
completion of Sir Jim Ratcliffe’s investment, and we are all
focused on working together with our new co-owners to drive the
club forward and deliver success on the pitch.”
Outlook
For fiscal 2024, the Company reiterates its previous revenue
guidance of £635 million to £665 million and its previous adjusted
EBITDA guidance of £125 million to £150 million.
Phasing of Premier League games
Quarter 1
Quarter 2
Quarter 3
Quarter 4
Total
2023/24 season
7
13
9
9
38
2022/23 season
6
10
10
12
38
2021/22 season
6
12
11
9
38
Key Financials
(unaudited)
£ million (except earnings/(loss) per
share)
Three months ended
31 December
Six months ended
31 December
2023
2022
Change
2023
2022
Change
Commercial revenue
71.8
78.7
(8.8%)
162.2
166.1
(2.3%)
Broadcasting revenue
106.4
58.7
81.0%
145.7
93.7
55.5%
Matchday revenue
47.6
29.9
59.2%
75.0
51.2
46.5%
Total revenue
225.8
167.3
34.9%
382.9
311.0
23.1%
Adjusted EBITDA(1)
91.4
48.3
88.8%
114.7
71.9
59.5%
Operating profit/(loss)
27.5
(2.9)
1,048.3%
29.4
(6.3)
566.7%
Profit/(loss) for the period (i.e. net
income/(loss))
20.4
6.3
223.8%
(5.3)
(20.2)
73.8%
Basic earnings/(loss) per share
(pence)
12.49
3.87
222.7%
(4.14)
(12.39)
66.6%
Adjusted profit/(loss) for the period
(i.e. adjusted net income/(loss)(1)
19.3
(10.1)
291.1%
10.7
(20.0)
153.5%
Adjusted basic earnings/(loss) per share
(pence)(1)
11.83
(6.18)
291.4%
6.56
(12.26)
153.5%
Non-current borrowings in USD (contractual
currency)(2)
$650.0
$650.0
0.0%
$650.0
$650.0
0.0%
(1) Adjusted EBITDA, adjusted profit/(loss) for the period and
adjusted basic earnings/(loss) per share are non-IFRS measures. See
“Non-IFRS Measures: Definitions and Use” on page 6 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) In addition to non-current borrowings, the Group maintains a
revolving credit facility which varies based on seasonal flow of
funds. The outstanding balance of the revolving credit facility as
of 31 December 2023 was £260.0 million and total current borrowings
including accrued interest payable was £266.8 million.
Revenue Analysis
Commercial
Commercial revenue for the quarter was £71.8 million, a decrease
of £6.9 million, or 8.8%, over the prior year quarter.
- Sponsorship revenue was £39.2 million, a decrease of £11.2
million, or 22.2%, over the prior year quarter, primarily due to a
one off sponsorship credit in the prior year quarter.
- Retail, Merchandising, Apparel & Product Licensing revenue
was £32.6 million, an increase of £4.3 million, or 15.2%, over the
prior year quarter, due to the extension of our contract with
Adidas and strong megastore performance.
Broadcasting
Broadcasting revenue for the quarter was £106.4 million, an
increase of £47.6 million, or 81.0%, over the prior year quarter,
primarily due to the men’s first team participating in the UEFA
Champions League compared to the UEFA Europa League in the prior
year.
Matchday
Matchday revenue for the quarter was £47.6 million, an increase
of £17.7 million, or 59.2%, over the prior year quarter, primarily
due to playing two more home games in the current year quarter
compared to the prior year quarter and the men’s first team
participating in the UEFA Champions League rather than the UEFA
Europa League.
Other Financial
Information
Operating expenses
Total operating expenses for the quarter were £198.7 million, an
increase of £31.1 million, or 18.6%, over the prior year
quarter.
Employee benefit expenses
Employee benefit expenses for the quarter were £95.1 million, an
increase of £17.8 million, or 23.0%, over the prior year quarter,
as a result of the men’s first team participating in the UEFA
Champions League in the current year, compared to the UEFA Europa
League in the prior year.
Other operating expenses
Other operating expenses for the quarter were £39.3 million, a
decrease of £2.4 million, or 5.8%, over the prior year quarter.
Depreciation and amortization
Depreciation for the quarter was £4.2 million, compared to £3.6
million in the prior year quarter. Amortization for the quarter was
£50.5 million, an increase of £5.5 million, or 12.2%, over the
prior year quarter, due to investment in the first team playing
squad. The unamortized balance of registrations at 31 December 2023
was £494.2 million.
Exceptional items
Exceptional items for the quarter were a cost of £9.6 million.
This comprises of costs incurred in relation to the Group’s
strategic review and agreed sale of 25% of Class B shares and up to
25% of Class A shares to Sir Jim Ratcliffe. Exceptional items in
the prior year quarter were £nil. Further exceptional items have
been recognized in the third quarter of fiscal 2024, after Premier
League and Football Association approval of the deal was
received.
Profit on disposal of intangible assets
Profit on disposal of intangible assets for the quarter was £0.4
million, compared to a loss of £2.6 million for the prior year
quarter.
Net finance (costs)/income
Net finance costs for the quarter were £0.3 million, compared to
net finance income of £12.1 million in the prior year quarter,
primarily due to a lower gain on re-translation of unhedged USD
borrowings.
Income tax
The income tax expense for the quarter was £6.8 million,
compared to an income tax expense of £2.9 million in the prior year
quarter.
Cash flows
Overall cash and cash equivalents (including the effects of
exchange rate movements) decreased by £18.0 million in the quarter
to 31 December 2023, compared to an increase of £6.7 million in the
prior year quarter.
Net cash outflow from operating activities for the quarter was
£46.6 million, compared to £61.5 million in the prior year
quarter.
Net capital expenditure on property, plant and equipment for the
quarter was £2.8 million, an increase of £0.1 million over the
prior year quarter.
Net capital expenditure on intangible assets for the quarter was
£35.7 million, an increase of £5.8 million over the prior year
quarter.
Net cash inflow from financing activities for the quarter was
£59.7 million, compared to £99.4 million in the prior year quarter.
This is due to a £60.0 million drawdown on the revolving credit
facilities in the current quarter compared to a £100.0 million
drawdown on the revolving credit facilities in the prior year
quarter.
Balance sheet
Our USD non-current borrowings as of 31 December 2023 were $650
million, which was unchanged from 31 December 2022. As a result of
the year-on-year change in the USD/GBP exchange rate from 1.2040 at
31 December 2022 to 1.2746 at 31 December 2023, our non-current
borrowings when converted to GBP were £506.5 million, compared to
£535.7 million at the prior year quarter.
In addition to non-current borrowings, the Group maintains a
revolving credit facility which varies based on seasonal flow of
funds. Current borrowings at 31 December 2023 were £266.8 million
compared to £206.2 million at 31 December 2022.
As of 31 December 2023, cash and cash equivalents were £62.8
million compared to £31.0 million at the prior year quarter,
primarily due to the drawdowns on our revolving facilities, offset
by investment in the first team playing squad.
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 146-year football heritage
we have won 67 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.
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.
Non-IFRS Measures: Definitions and
Use
1. Adjusted EBITDA
Adjusted EBITDA is defined as profit/(loss) for the period
before depreciation, amortization, profit/(loss) on disposal of
intangible assets, exceptional items, net finance (costs)/income,
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 and amortization),
material volatile items (primarily profit/(loss) on disposal of
intangible assets and exceptional items), capital structure
(primarily finance (costs)/income), 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/(loss) 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 related to exceptional items, foreign
exchange gains/(losses) on unhedged US dollar denominated
borrowings and fair value movements on embedded foreign exchange
derivatives, adding/subtracting the actual tax expense/credit for
the period, and adding/subtracting the adjusted tax credit/expense
for the period (based on an normalized tax rate of 21%; 2022: 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% (2022: 21%)
applicable during the financial year. A reconciliation of
profit/(loss) for the period to adjusted loss for the period is
presented in supplemental note 3.
3. Adjusted basic and diluted
earnings/(loss) per share
Adjusted basic and diluted earnings/(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.
Key Performance
Indicators
Three months ended
Six months ended
31 December
31 December
2023
2022
2023
2022
Revenue
Commercial % of total revenue
31.8%
47.0%
42.4%
53.4%
Broadcasting % of total revenue
47.1%
35.1%
38.0%
30.1%
Matchday % of total revenue
21.1%
17.9%
19.6%
16.5%
2023/24 Season
2022/23 Season
2023/24 Season
2022/23 Season
Home Matches Played
PL
6
4
10
7
UEFA competitions
3
2
3
3
Domestic Cups
1
2
2
2
Away Matches Played
PL
7
6
10
9
UEFA competitions
2
2
3
3
Domestic Cups
-
-
-
-
Other
Employees at period end
1,146
1,233
1,146
1,233
Employee benefit expenses % of revenue
42.1%
46.2%
48.4%
51.3%
CONSOLIDATED STATEMENT OF
PROFIT OR LOSS
(unaudited; in £ thousands,
except per share and shares outstanding data)
Three months ended
31 December
Six months ended
31 December
2023
2022
2023
2022
Revenue from contracts with
customers
225,756
167,368
382,852
311,022
Operating expenses
(198,661
)
(167,640
)
(383,423
)
(331,284
)
Profit/(loss) on disposal of intangible
assets
399
(2,588
)
29,880
14,020
Operating profit/(loss)
27,494
(2,860
)
29,309
(6,242
)
Finance costs
(16,593
)
(26,277
)
(37,842
)
(21,956
)
Finance income (1)
16,318
38,392
2,948
3,083
Net finance (costs)/income
(275
)
12,115
(34,894
)
(18,873
)
Profit/(loss) before income tax
27,219
9,255
(5,585
)
(25,115
)
Income tax (expense)/credit
(6,845
)
(2,949
)
202
4,905
Profit/(loss) for the period
20,374
6,306
(5,383
)
(20,210
)
Basic earnings/(loss) per
share:
Basic earnings/(loss) per share
(pence)
12.49
3.87
(3.30
)
(12.39
)
Weighted average number of ordinary shares
used as the denominator in calculating basic earnings/(loss) per
share (thousands)
163,159
163,062
163,159
163,062
Diluted earnings/(loss) per
share:
Diluted earnings/(loss) per share (pence)
(2)
12.44
3.85
(3.30
)
(12.39
)
Weighted average number of ordinary shares
and potential ordinary shares used as the denominator in
calculating diluted earnings/(loss) per share (thousands) (2)
163,723
163,605
163,159
163,062
(1) Each element of finance income is split based on its
position in both the 3 months ended 31 December 2023 and the 6
months ended 31 December 2023. In the current year, exchange rate
fluctuations have resulted in income for the 3 months ended 31
December 2023 that is greater than the total net position across
the 6 months ended 31 December 2023.
(2) For the six months ended 31 December 2023 and 31 December
2022, 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.
CONSOLIDATED BALANCE
SHEET
(unaudited; in £
thousands)
As of
31 December
2023
30 June
2023
31 December
2022
ASSETS
Non-current assets
Property, plant and equipment
255,246
253,282
243,434
Right-of-use assets
8,199
8,760
3,353
Investment properties
19,853
19,993
20,133
Intangible assets
922,527
812,382
871,529
Trade receivables
24,498
22,303
21,224
Derivative financial instruments
200
7,492
22,189
1,230,523
1,124,212
1,181,862
Current assets
Inventories
4,024
3,165
3,272
Prepayments
26,945
16,487
26,087
Contract assets – accrued revenue
61,819
43,332
53,505
Trade receivables
81,388
31,167
116,409
Other receivables
2,065
9,928
2,426
Income tax receivable
-
5,317
4,479
Derivative financial instruments
2,439
8,317
7,876
Cash and cash equivalents
62,809
76,019
31,045
241,489
193,732
245,099
Total assets
1,472,012
1,317,944
1,426,961
CONSOLIDATED BALANCE SHEET
(continued)
(unaudited; in £
thousands)
As of
31 December
2023
30 June
2023
31 December
2022
EQUITY AND LIABILITIES
Equity
Share capital
53
53
53
Share premium
68,822
68,822
68,822
Treasury shares
(21,305
)
(21,305
)
(21,305
)
Merger reserve
249,030
249,030
249,030
Hedging reserve
(25
)
4,002
2,249
Retained deficit
(200,558
)
(196,652
)
(189,097
)
96,017
103,950
109,752
Non-current liabilities
Deferred tax liabilities
924
3,304
2,413
Contract liabilities - deferred
revenue
8,059
6,659
7,274
Trade and other payables
189,891
161,141
160,495
Borrowings
506,509
507,335
535,654
Lease liabilities
7,704
7,844
2,475
Derivative financial instruments
1,482
748
519
Provisions
-
93
89
714,569
687,124
708,919
Current liabilities
Contract liabilities - deferred
revenue
149,643
169,624
160,554
Trade and other payables
231,701
236,472
227,772
Income tax liabilities
775
-
-
Borrowings
266,792
105,961
206,246
Lease liabilities
861
1,036
804
Derivative financial instruments
591
931
-
Provisions
11,063
12,846
12,914
661,426
526,870
608,290
Total equity and liabilities
1,472,012
1,317,944
1,426,961
CONSOLIDATED STATEMENT OF CASH
FLOWS
(unaudited; in £
thousands)
Three months ended 31
December
Six months ended 31
December
2023
2022
2023
2022
Cash flows from operating
activities
Cash used in operations (see supplemental
note 4)
(38,012
)
(56,633
)
(12,141
)
(53,014
)
Interest paid
(8,182
)
(4,595
)
(18,756
)
(14,223
)
Interest received
223
59
572
77
Tax (paid)/refunded
(561
)
(340
)
5,256
(392
)
Net cash outflow from operating
activities
(46,532
)
(61,509
)
(25,069
)
(67,552
)
Cash flows from investing
activities
Payments for property, plant and
equipment
(2,811
)
(2,706
)
(11,840
)
(7,099
)
Payments for intangible assets
(35,729
)
(29,868
)
(167,942
)
(129,892
)
Proceeds from sale of intangible
assets
7,913
2,071
33,582
13,733
Net cash outflow from investing
activities
(30,627
)
(30,503
)
(146,200
)
(123,258
)
Cash flows from financing
activities
Proceeds from borrowings
60,000
100,000
160,000
100,000
Principal elements of lease payments
(300
)
(571
)
(500
)
(1,449
)
Net cash inflow from financing
activities
59,700
99,429
159,500
98,551
Effects of exchange rate changes on cash
and cash equivalents
(561
)
(649
)
(1,441
)
2,081
Net (decrease)/increase in cash and
cash equivalents
(18,020
)
6,768
(13,210
)
(90,178
)
Cash and cash equivalents at beginning of
period
80,829
24,277
76,019
121,223
Cash and cash equivalents at end of
period
62,809
31,045
62,809
31,045
SUPPLEMENTAL NOTES
1 General 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.
2 Reconciliation of profit/(loss) for the period to adjusted
EBITDA
Three months ended
31 December
Six months ended
31 December
2023
£’000
2022
£’000
2023
£’000
2022
£’000
Profit/(loss) for the period
20,374
6,306
(5,383
)
(20,210
)
Adjustments:
Income tax expense/(credit)
6,845
2,949
(202
)
(4,905
)
Net finance costs/(income)
275
(12,115
)
34,894
18,873
(Profit)/loss on disposal of intangible
assets
(399
)
2,588
(29,880
)
(14,020
)
Exceptional items
9,595
-
9,595
-
Amortization
50,495
44,971
97,340
85,110
Depreciation
4,153
3,609
8,255
7,087
Adjusted EBITDA
91,338
48,308
114,619
71,935
3 Reconciliation of profit for the period to adjusted
profit/(loss) for the period and adjusted basic and diluted
earnings/(loss) per share
Three months ended
31 December
Six months ended
31 December
2023
£’000
2022
£’000
2023
£’000
2022
£’000
Profit/(loss) for the period
20,374
6,306
(5,383
)
(20,210
)
Exceptional items
9,595
-
9,595
-
Foreign exchange (gains)/losses on
unhedged US dollar denominated borrowings
(13,332
)
(37,737
)
421
2,703
Fair value loss/(gain) on embedded foreign
exchange derivatives
946
15,720
9,109
(2,892
)
Income tax expense/(credit)
6,845
2,949
(202
)
(4,905
)
Adjusted profit/loss before income tax
24,428
(12,762
)
13,540
(25,304
)
Adjusted income tax (expense)/credit
(using a normalized tax rate of 21% (2021: 21%))
(5,130
)
2,680
(2,843
)
5,314
Adjusted profit/(loss) for the period
(i.e. adjusted net income/(loss))
19,298
(10,082
)
10,697
(19,990
)
Adjusted basic earnings/(loss) per
share:
Adjusted basic earnings/(loss) per share
(pence)
11.83
(6.18
)
6.56
(12.26
)
Weighted average number of ordinary shares
used as the denominator in calculating adjusted basic
earnings/(loss) per share (thousands)
163,159
163,062
163,159
163,062
Adjusted diluted earnings/(loss per
share:
Adjusted diluted earnings/(loss) per share
(pence)(1)
11.79
(6.18
)
6.53
(12.26
)
Weighted average number of ordinary shares
and potential ordinary shares used as the denominator in
calculating adjusted diluted earnings/(loss) per share (thousands)
(1)
163,723
163,062
163,723
163,062
(1) For the three and six months ended 31 December 2022
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.
4 Cash used in operations
Three months ended 31
December
Six months ended 31
December
2023
£’000
2022
£’000
2023
£’000
2022
£’000
Profit/(loss) for the period
20,374
6,306
(5,383
)
(20,210
)
Income tax expense/(credit)
6,845
2,949
(202
)
(4,905
)
Profit/(loss) before income tax
27,219
9,255
(5,585
)
(25,115
)
Adjustments for:
Depreciation
4,153
3,609
8,255
7,087
Amortization
50,495
44,971
97,340
85,110
(Profit)/loss on disposal of intangible
assets
(399
)
2,588
(29,880
)
(14,020
)
Net finance costs/(income)
275
(12,115
)
34,894
18,873
Non-cash employee benefit expense –
equity-settled share-based payments
736
626
1,476
1,155
Foreign exchange losses/(gains) on
operating activities
619
5,140
477
3,967
Reclassified from hedging reserve
250
(367
)
(2
)
(530
)
Changes in working capital:
Inventories
1,022
480
(859
)
(1,072
)
Prepayments
9,286
4,638
(10,833
)
(10,928
)
Contract assets – accrued revenue
(14,476
)
(7,366
)
(18,487
)
(17,266
)
Trade receivables
(39,110
)
(64,070
)
(44,355
)
(48,087
)
Other receivables
9,612
(497
)
7,863
(857
)
Contract liabilities – deferred
revenue
(64,780
)
(23,898
)
(18,581
)
(14,716
)
Trade and other payables
(23,602
)
(19,821
)
(31,839
)
(36,974
)
Provisions
688
194
(2,025
)
359
Cash used in operations
(38,012
)
(56,633
)
(12,141
)
(53,014
)
View source
version on businesswire.com: https://www.businesswire.com/news/home/20240312107878/en/
Investor Relations: Corinna Freedman Head of Investor
Relations +44 738 491 0828 Corinna.Freedman@manutd.co.uk
Media Relations: Andrew Ward Director of Media Relations
& Public Affairs +44 161 676 7770 Andrew.Ward@manutd.co.uk
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