Key Points
- Achieved Commercial revenues of £85.3 million with a reduced
summer tour relative to last year
- The men’s first team participated in the revised format of
the UEFA Europa League, contributing to Broadcasting revenue for
the quarter of £31.3 million
- Matchday revenues remain resilient at £26.5 million, with 3
fewer fixtures relative to last year offset by strong Hospitality
and Matchday VIP revenues
- Club announced a new global sponsorship with Heineken until
June 2028, with Tiger Beer as the Official Beer Partner of
Manchester United and renewed global sponsorships with DHL, Hong
Kong Jockey Club and Konami during the quarter
- For Fiscal 2025, the company reiterates its prior guidance
of total revenues of £650 million to £670 million and adjusted
EBITDA of £145 million to £160 million
Manchester United (NYSE: MANU; the “Company” and the “Group”)
today announced financial results for the 2025 fiscal first quarter
ended 30 September 2024.
Management Commentary
Omar Berrada, Chief Executive Officer, commented, “The season is
now well underway for both our men’s and women’s team, and we are
keen to ensure both are as competitive as possible. We are
delighted to have appointed Ruben Amorim as head coach of our men’s
team and remain committed to returning Manchester United to the top
of domestic and European football. Our cost and headcount
reductions remain on track, and we are pleased to have seen further
commercial traction, and welcome new partner Heineken, through
their Tiger brand. Our renovation of the Carrington Training Centre
is progressing well, while the Old Trafford Regeneration Task Force
continues its work. Once it has delivered its recommendations, we
will then take some time to digest them and evaluate all our
options in the upcoming year.”
Outlook
For fiscal 2025, the Company reiterates its full year revenue
guidance of £650 million to £670 million and adjusted EBITDA
guidance of £145 million to £160 million. The club remains
committed to, and in compliance with, both the Premier League’s
Profit and Sustainability Rules and UEFA’s Financial Fair Play
Regulations.
Phasing of Premier League games
Quarter 1
Quarter 2
Quarter 3
Quarter 4
Total
2024/25 season
6
13
10
9
38
2023/24 season
7
13
9
9
38
2022/23 season
6
10
10
12
38
Key Financials
(unaudited)
£ million (except earnings/(loss) per
share)
Three months ended
30 September
2024
2023
Change
Commercial revenue
85.3
90.4
(5.6%)
Broadcasting revenue
31.3
39.3
(20.4%)
Matchday revenue
26.5
27.4
(3.3%)
Total revenue
143.1
157.1
(8.9%)
Adjusted EBITDA(1)
23.7
23.3
1.7%
Operating (loss)/profit
(6.9)
1.9
(463.2%)
Profit/(loss) for the period (i.e. net
profit/(loss)) (3)
1.4
(25.8)
105.4%
Basic earnings/(loss) per share
(pence)
0.78
(15.79)
104.9%
Adjusted loss for the period (i.e.
adjusted net loss)(1)
(0.3)
(8.6)
96.5%
Adjusted basic loss per share
(pence)(1)
(0.21)
(5.27)
96.0%
Non-current borrowings in USD (contractual
currency) (2)
$650.0
$650.0
0.0%
(1) Adjusted EBITDA, adjusted loss for the
period and adjusted basic 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 30 September 2024 was £230.0 million and
total current borrowings including accrued interest payable was
£232.3 million.
(3) Profit attributable primarily to
foreign exchange gains on unhedged US dollar borrowings as a result
of favourable movements in the USD/GBP exchange rates, from 1.2643
at 30 June 2024, to 1.3412 at 30 September 2024; the majority of
this gain is expected to be reversed during the second quarter of
Fiscal 2025.
Revenue Analysis
Commercial
Commercial revenue for the quarter was £85.3 million, a decrease
of £5.1 million, or 5.6%, over the prior year quarter.
- Sponsorship revenue was £51.8 million, a decrease of £4.4
million, or 7.8%, over the prior year quarter due to changes in
sponsorship agreements and the men’s first team playing 3 fewer
matches on their pre-season tour compared to the prior year
quarter.
- Retail, Merchandising, Apparel & Product Licensing revenue
was £33.5 million, a decrease of £0.7 million, or 2.0%, over the
prior year quarter.
Broadcasting
Broadcasting revenue for the quarter was £31.3 million, a
decrease of £8.0 million, or 20.4%, over the prior year quarter,
primarily due to our men’s first team participating in the UEFA
Europa League compared to the UEFA Champions League in the prior
year quarter.
Matchday
Matchday revenue for the quarter was £26.5 million, a decrease
of £0.9 million, or 3.3%, over the prior year quarter.
Other Financial
Information
Operating expenses
Total operating expenses for the quarter were £185.6 million, an
increase of £0.9 million, or 0.5%, over the prior year quarter.
This increase is explained by category below.
Employee benefit expenses
Employee benefit expenses for the quarter were £80.2 million, a
decrease of £10.1 million, or 11.2%, over the prior year quarter,
primarily due to changes in the make-up of the first team playing
squad.
Other operating expenses
Other operating expenses for the quarter were £39.2 million, a
decrease of £4.3 million, or 9.9%, over the prior year quarter.
This is primarily due to reduced costs associated with the men’s
first team’s pre-season tour in the current year quarter.
Depreciation and amortization
Depreciation for the quarter was £4.3 million, an increase of
£0.2 million, or 4.9%, over the prior year quarter. Amortization
for the quarter was £53.3 million, an increase of £6.5 million, or
13.9%, over the prior year quarter, due to investment in the first
team playing squad and transactions made in the Summer transfer
window. The unamortized balance of registrations at 30 September
2024 was £559.3 million, compared to £539.9 million at 30 September
2023.
Exceptional items
Exceptional items for the quarter were a cost of £8.6 million.
This comprises costs incurred in relation to the restructuring of
the Group’s operations, including the redundancy scheme implemented
in the first quarter of financial year 2025. Exceptional items in
the prior year quarter were £nil.
Profit on disposal of intangible assets
Profit on disposal of intangible assets for the quarter, namely
player sales was £35.6 million, an increase of £6.1 million, or
20.7%, from £29.5 million in the prior year quarter.
Net finance income/(costs)
Net finance income for the quarter was £8.6 million, compared to
net finance costs of £34.7 million in the prior year quarter. This
is primarily due to a favorable swing in foreign exchange rates
resulting in unrealized foreign exchange gains on unhedged USD
borrowings.
Income tax
The income tax expense for the quarter was £0.3 million,
compared to an income tax credit of £7.0 million in the prior year
quarter.
Cash flows
Overall cash and cash equivalents (including the effects of
exchange rate movements) increased by £76.0 million in the quarter
to 30 September 2024 compared to the cash position at 30 June
2024.
Net cash inflow from operating activities for the quarter was
£13.3 million, compared to net cash inflow of £21.5 million in the
prior year quarter.
Net capital expenditure on property, plant and equipment for the
quarter was £10.3 million, an increase of £1.2 million over the
prior year quarter, primarily due to expenditure relating to the
redevelopment of our Carrington Training Centre.
Net capital expenditure on intangible assets for the quarter was
£120.2 million, an increase of £13.7 million over the prior year
quarter, due to increased investment in the first team playing
squad.
Net cash inflow from financing activities for the quarter was
£199.9 million, compared to a net cash inflow of £99.8m in the
prior year quarter. This is due to a drawdown of £200.0 million on
our revolving facilities in the current year quarter compared to a
drawdown of £100.0 million in the prior year quarter.
Balance sheet
Our USD non-current borrowings as of 30 September 2024 were $650
million, which was unchanged from 30 September 2023. As a result of
the year-on-year change in the USD/GBP exchange rate from 1.2208 at
30 September 2023 to 1.3412 at 30 September 2024, our non-current
borrowings when converted to GBP were £481.7 million, compared to
£528.8 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 30 September 2024 were £232.3 million
compared to £204.4 million at 30 September 2023.
As of 30 September 2024, cash and cash equivalents were £149.6
million compared to £80.8 million at the prior year quarter.
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 147-year football heritage
we have won 69 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 on disposal of intangible
assets, net finance income/costs, 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 and amortization),
material volatile items (primarily profit on disposal of intangible
assets and exceptional items), 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 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 foreign exchange losses/gains on unhedged US
dollar denominated borrowings (including foreign exchange
gains/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, subtracting/adding the actual tax credit/expense for
the period, and adding the adjusted tax credit for the period
(based on an normalized tax rate of 25%; 2023: 21%). The normalized
tax rate of 25% is the current UK corporation tax rate (2023: US
federal corporate income tax rate of 21%).
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 UK corporation
tax rate of 25% (2023: US federal corporate income tax rate of 21%
) applicable during the financial year. A reconciliation of
profit/(loss) for the period to adjusted loss/profit 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.
Key Performance
Indicators
Three months ended
30 September
2024
2023
Revenue
Commercial % of total revenue
59.6%
57.5%
Broadcasting % of total revenue
21.9%
25.0%
Matchday % of total revenue
18.5%
17.5%
2024/25
Season
2023/24
Season
Home Matches Played
PL
3
4
UEFA competitions
1
-
Domestic Cups
1
1
Away Matches Played
PL
3
3
UEFA competitions
-
1
Domestic Cups
-
-
Other
Employee benefit expenses % of revenue
56.0%
57.5%
CONSOLIDATED STATEMENT OF
PROFIT OR LOSS
(unaudited; in £ thousands,
except per share and shares outstanding data)
Three months ended
30 September
2024
2023
Revenue from contracts with
customers
143,065
157,096
Operating expenses
(185,585
)
(184,762
)
Profit on disposal of intangible
assets
35,552
29,481
Operating (loss)/profit
(6,968
)
1,815
Finance costs
(19,776
)
(34,968
)
Finance income
28,372
349
Net finance income/(costs)
8,596
(34,619
)
Profit/(loss) before income tax
1,628
(32,804
)
Income tax (expense)/credit
(299
)
7,047
Profit/(loss) for the period
1,329
(25,757
)
Basic and diluted earnings/(loss) per
share:
Basic and diluted earnings/(loss) per
share (pence) (1) (2)
0.78
(15.79
)
Weighted average number of ordinary shares
used as the denominator in calculating basic and diluted
earnings/(loss) per share (thousands) (1) (2)
169,318
163,159
(1) For the three months ended 30
September 2023, 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.
(2) For the three months ended 30
September 2024, potential ordinary shares are dilutive as their
inclusion reduces the earnings per share, however this dilution
does not have an impact upon rounding the earnings per share to two
decimal places.
CONSOLIDATED BALANCE
SHEET
(unaudited; in £
thousands)
As of
30 September
2024
30 June
2024
30 September
2023
ASSETS
Non-current assets
Property, plant and equipment
265,432
256,118
256,961
Right-of-use assets
7,912
8,195
8,417
Investment properties
19,643
19,713
19,923
Intangible assets
987,674
837,564
966,766
Deferred tax asset
16,848
17,607
6,244
Trade receivables
59,512
27,930
45,014
Derivative financial instruments
101
380
190
1,357,122
1,167,507
1,303,515
Current assets
Inventories
12,441
3,543
5,046
Prepayments
36,555
18,759
36,418
Contract assets – accrued revenue
45,759
39,778
47,343
Trade receivables
39,355
36,999
28,920
Other receivables
2,162
2,735
11,677
Derivative financial instruments
11
1,917
6,646
Cash and cash equivalents
149,558
73,549
80,829
285,841
177,280
216,879
Total assets
1,642,963
1,344,787
1,520,394
CONSOLIDATED BALANCE SHEET
(continued)
(unaudited; in £
thousands)
As of
30 September
2024
30 June
2024
30 September
2023
EQUITY AND LIABILITIES
Equity
Share capital
55
55
53
Share premium
227,361
227,361
68,822
Treasury shares
(21,305
)
(21,305
)
(21,305
)
Merger reserve
249,030
249,030
249,030
Hedging reserve
583
(1,000
)
(2,947
)
Retained deficit
(307,545
)
(309,251
)
(221,669
)
148,179
144,890
71,984
Non-current liabilities
Deferred tax liabilities
-
-
-
Contract liabilities - deferred
revenue
7,269
5,347
7,816
Trade and other payables
210,555
175,894
203,853
Borrowings
481,714
511,047
528,787
Lease liabilities
8,227
7,707
7,766
Derivative financial instruments
3,192
4,911
850
Provisions
-
-
95
710,957
704,906
749,167
Current liabilities
Contract liabilities - deferred
revenue
224,842
198,628
214,666
Trade and other payables
309,542
249,030
267,728
Income tax liabilities
914
427
684
Borrowings
232,317
35,574
204,380
Lease liabilities
446
934
971
Derivative financial instruments
7,890
2,603
499
Provisions
7,876
7,795
10,315
783,827
494,991
699,243
Total equity and liabilities
1,642,963
1,344,787
1,520,394
CONSOLIDATED STATEMENT OF CASH
FLOWS
(unaudited; in £
thousands)
Three months ended
30 September
2024
2023
Cash flow from operating
activities
Cash generated from operations (see
supplemental note 4)
23,208
25,871
Interest paid
(11,370
)
(10,574
)
Interest received
1,060
349
Tax refunded
419
5,817
Net cash inflow from operating
activities
13,317
21,463
Cash flow from investing
activities
Payments for property, plant and
equipment
(10,299
)
(9,029
)
Payments for intangible assets
(153,740
)
(132,213
)
Proceeds from sale of intangible
assets
33,568
25,669
Net cash outflow from investing
activities
(130,471
)
(115,573
)
Cash flow from financing
activities
Proceeds from borrowings
200,000
100,000
Principal elements of lease payments
(128
)
(200
)
Net cash inflow from financing
activities
199,872
99,800
Effect of exchange rate changes on cash
and cash equivalents
(6,709
)
(880
)
Net increase in cash and cash
equivalents
76,009
4,810
Cash and cash equivalents at beginning of
period
73,549
76,019
Cash and cash equivalents at end of
period
149,558
80,829
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
30 September
2024
£’000
2023
£’000
Profit/(loss) for the period
1,329
(25,757
)
Adjustments:
Income tax expense/(credit)
299
(7,047
)
Net finance (income)/costs
(8,596
)
34,619
Profit on disposal of intangible
assets
(35,552
)
(29,481
)
Amortization
53,270
46,845
Depreciation
4,256
4,102
Exceptional items
8,638
-
Adjusted EBITDA
23,644
23,281
3 Reconciliation of profit/(loss) for the period to adjusted
loss for the period and adjusted basic and diluted loss per
share
Three months ended
30 September
2024
£’000
2023
£’000
Profit/(loss) for the period
1,329
(25,757
)
Exceptional items
8,638
-
Foreign exchange (gains)/losses on
unhedged US dollar denominated borrowings
(16,684
)
13,753
Fair value movement on embedded foreign
exchange derivatives
5,952
8,163
Income tax expense/(credit)
299
(7,047
)
Adjusted loss before income tax
(466
)
(10,888
)
Adjusted income tax credit (using a
normalized tax rate of 25% (2023: 21%))
117
2,286
Adjusted loss for the period (i.e.
adjusted net loss)
(349
)
(8,602
)
Adjusted basic and diluted loss per
share:
Adjusted basic and diluted loss per share
(pence)(1)
(0.21
)
(5.27
)
Weighted average number of ordinary shares
used as the denominator in calculating basic and diluted loss per
share (thousands) (1)
169,318
163,159
(1) For the three months ended 30
September 2024 and the three months ended 30 September 2023
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 generated from operations
Three months ended
30 September
2024
£’000
2023
£’000
Profit/(loss) for the period
1,329
(25,757
)
Income tax expense/(credit)
299
(7,047
)
Profit/(loss) before income tax
1,628
(32,804
)
Adjustments for:
Depreciation
4,256
4,102
Amortization
53,270
46,845
Profit on disposal of intangible
assets
(35,552
)
(29,481
)
Net finance (income)/costs
(8,596
)
34,619
Non-cash employee benefit expense -
equity-settled share-based payments
376
740
Foreign exchange gains on operating
activities
(714
)
(142
)
Reclassified from hedging reserve
2,759
(252
)
Changes in working capital:
Inventories
(8,898
)
(1,881
)
Prepayments
(18,098
)
(20,119
)
Contract assets – accrued revenue
(5,981
)
(4,011
)
Trade receivables
(14,230
)
(5,245
)
Other receivables
573
(1,749
)
Contract liabilities – deferred
revenue
28,136
46,199
Trade and other payables
24,306
(8,237
)
Provisions
(27
)
(2,713
)
Cash generated from operations
23,208
25,871
View source
version on businesswire.com: https://www.businesswire.com/news/home/20241122260124/en/
Investors: Corinna Freedman Head of Investor Relations
Corinna.Freedman@manutd.co.uk
Media: Toby Craig Chief Communications Officer
Toby.Craig@manutd.co.uk
Manchester United (NYSE:MANU)
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