Manchester United PLC Reports First Quarter Fiscal 2023 Results
Manchester United (NYSE: MANU) reported its fiscal Q1 2023 results, revealing a total revenue of £143.7 million, up 13.6% year-over-year, driven by strong commercial performance and increased matchday revenue. The club raised its revenue guidance for the year to £590-610 million and adjusted EBITDA to £125-140 million, attributing the growth to reduced player wage costs. Despite a net loss of £26.5 million, significant engagement initiatives and record global memberships of 330,000 were highlighted alongside strategic partnerships. The club also announced exploring options for future growth, including potential new investments.
- Total revenue increased by 13.6% year-over-year to £143.7 million.
- Commercial revenue rose by 35.7% to £87.4 million, driven by pre-season tour.
- Matchday revenue increased by 13.3% to £21.3 million.
- Guidance for total revenue raised to £590-610 million and adjusted EBITDA to £125-140 million.
- Record global memberships reached 330,000.
- Net loss for the period was £26.5 million, a 71% increase from the previous year.
- Broadcasting revenue decreased by 19.2% to £35 million due to participation in UEFA Europa League instead of Champions League.
- Operating loss of £3.4 million, though improved by 66.7%.
- No semi-annual dividend payment approved for fiscal 2023.
-
15
Manchester United players are participating in the 2022 FIFA Men’s World Cup Finals and 12 players are with teams in the quarter-finals - Global memberships reached a record level and currently stand at 330,000 – the largest in world sport
- Club achieved record attendance for UEL group stage matches, reflecting high demand and the impact of new cup season tickets
- Increased commercial revenues were driven by successful return to normal summer tour activities and new partnerships
- New partnerships with Betfred, DXC, Qualcomm and Therabody were launched during the quarter
- In partnership with Tezos, the club announced the launch of its first digital collectibles on 14 November
-
On 22 November, the club announced its separation by mutual agreement with
Cristiano Ronaldo - On 22 November, the Company announced a process to explore strategic alternatives to enhance future growth and the Board will consider all options, including new investment into the club, a sale, or other transactions
-
For fiscal 2023, the Company raises its guidance to
£590 million to£610 million total revenues, and£125 million to£140 million adjusted EBITDA from a prior range of£580 million to£600 million total revenues and£100 million to£110 million adjusted EBITDA
Outlook
For fiscal 2023, the Company is raising its guidance and expects total revenues to be within a range of
Phasing of |
Quarter 1 |
Quarter 2 |
Quarter 3 |
Quarter 4 |
Total |
2022/23 season |
6* |
10 |
10 |
12* |
38 |
2021/22 season |
6 |
12 |
11 |
9 |
38 |
*Note: Two matches in
Key Financials (unaudited)
£ million (except loss per share) |
Three months ended 30 September |
|
|
|
2022 |
2021 |
Change |
Commercial revenue |
|
|
|
Broadcasting revenue |
35.0 |
43.3 |
( |
Matchday revenue |
21.3 |
18.8 |
|
Total revenue |
143.7 |
126.5 |
|
Adjusted EBITDA(1) |
23.6 |
11.2 |
|
Operating loss |
(3.4) |
(10.2) |
( |
|
|||
Loss for the period (i.e. net loss) |
(26.5) |
(15.5) |
|
Basic loss per share (pence) |
(16.26) |
(9.53) |
( |
Adjusted loss for the period (i.e. adjusted net loss)(1) |
(9.9) |
(12.5) |
( |
Adjusted basic loss per share (pence)(1) |
(6.08) |
(7.67) |
( |
|
|||
Non-current borrowings in USD (contractual currency)(2) |
|
|
|
(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 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) 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
Football
We continue to make meaningful progress in improving football operations and performance, including:
-
The men’s first team ended the first half of the 2022/23
Premier League season in 5th place under the leadership of new manager,Erik ten Hag -
The men’s first team advanced to the knockout playoff round of UEFA’s
Europa League competition againstBarcelona , with matches resuming inFebruary 2023 -
Manchester United Women are in 2nd place in the 2022/23 Women’s
Super League under the leadership of manager,Marc Skinner -
August 2022 marked 90 years since the inception of Manchester United’sYouth Development programme and we continue to extend our record of having an Academy graduate in every first team squad since 1937, spanning nearly 4,200 matches; Manchester United’s Academy was designated as the top English club in developing young players with 46 graduates in Europe’s 31 highest-ranked divisions -
15
Manchester United players are participating in the 2022 FIFA Men’sWorld Cup finals; matches began 20 November with the final to be held 18 December; 12 players are with teams in the quarter-finals -
During the winter break for the 2022 FIFA Men's
World Cup finals, remaining club players are participating in a winter training camp with friendly matches scheduled against La Liga sides, Cadiz CF on 07 December and Real Betis on 10 December
Strengthening engagement with fans remains an ongoing key strategic priority, and includes the following initiatives:
-
The Club held a third quarterly meeting of our Fans’
Advisory Board , attended by ChairmanJoel Glazer - The first Fans’ Forum meeting for the 2022/23 season was held 23 September
-
Reform of cup ticket policies, led by our
Fans' Advisory Board , has widened access to Cup matches at Old Trafford and contributed to record attendances for our UEL group stage matches - During the first quarter, 10 new official supporters’ clubs were formed, bringing the total to a record 275 clubs in 94 countries
Facilities - Venue and Operations
In addition to record ticket sales for the 2022/23 season, in the first quarter Venue and Operations further achieved:
- Global memberships continue to sell at record levels including sell-out of a new Premium Membership tier; at the end of the first quarter global members totalled 288,000 and memberships currently stand at 330,000 members to date, the largest membership program in world sport
-
Experienced continued momentum for Women’s football with
Leigh Sport Village ticket sales at the end of the first quarter approximately25% higher than the entire 2021/22 season - A return to normal pre-season Tour operations generated exceptionally high Tour revenues in July with over 350,000 fans in attendance across three continents, four countries and five cities
-
Old
Trafford hosted a third Women’sSuper League fixture against Aston Villa on 3 December and recently hosted the PremierLeague International Cup on 11 November and the Rugby League World Cup final 19 November
Partnerships
A strong quarter of new or renewed partnership deals included:
-
Club held its second in-person #ILoveUnited event since the onset of the pandemic in
Kolkata, India , inOctober 2022 with a record-breaking 7,300 fans in attendance featuring activations from 15 global partners; the event was 16 times oversubscribed and was the largest ever football screening inIndia - Successfully launched a new partnership with DXC as our sleeve partner which reached a combined media audience of 2.15 billion people and was our most visible sleeve partner launch, delivering over 92 million video views in the first 30 days
- Successfully launched new global partnerships with Betfred, Qualcomm and Therabody
Digital Products & Experiences
Content-led digital fan engagement continues to connect our club with our fans around the world.
- Club achieved all-time record-breaking kit launches in the first quarter including the highest number of units sold for Home & Away kits in a first week
- The re-launch of the Manchester United App was bolstered by strong usage during the summer Tour with the highest ever MAUs, the five biggest Matchday DAUs, and the highest ever monthly downloads
- Over 2.5 million users watched Tour match content in July via our Club app and website across 220 markets contributing to record breaking engagement and video views
- Club gained more than 7 million followers and generated more than 491 million digital interactions and 2.1 billion video views across all global social platforms in the first quarter
- Club announced the launch of its first digital collectibles on 14 November in partnership with Tezos; with the first ‘drop’ planned for December
- MUTV now available in over 70 countries through TV partners with recent renewals; MUTV app is also now available on Samsung, LG and Android TVs in addition to Apple TV, Xbox, Amazon Fire and Roku
Revenue Analysis
Commercial
Commercial revenue for the quarter was
-
Sponsorship revenue was
£57.8 million , an increase of£21.5 million , or59.2% , over the prior year quarter, primarily due to the men’s first team pre-season tour which took place in July. There was no tour in the prior year quarter due to COVID-19 travel restrictions. -
Retail, Merchandising, Apparel &
Product Licensing revenue was£29.6 million , an increase of£1.5 million , or5.3% , over the prior year quarter, primarily due to an increase in e-commerce sales.
Broadcasting
Broadcasting revenue for the quarter was
Matchday
Matchday revenue for the quarter was
Other Financial Information
Operating expenses
Total operating expenses for the quarter were
Employee benefit expenses
Employee benefit expenses for the quarter were
Other operating expenses
Other operating expenses for the quarter were
Depreciation and amortization
Depreciation for the quarter was
Profit on disposal of intangible assets
Profit on disposal of intangible assets for the quarter was
Net finance costs
Interest paid in the quarter was
Income tax
The income tax credit for the quarter was
Cash flows
Overall cash and cash equivalents (including the effects of exchange rate movements) decreased by
Net cash outflow from operating activities for the quarter was
Net capital expenditure on property, plant and equipment for the quarter was
Net capital expenditure on intangible assets for the quarter was
Net cash outflow from financing activities for the quarter was
Balance sheet
Our USD non-current borrowings as of
In addition to non-current borrowings, the Group maintains a revolving credit facility which varies based on seasonal flow of funds. Current borrowings at
As of
Dividend
On 15 November, the Board of Directors did not approve the payment of the semi-annual dividend for fiscal 2023.
About
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
Non-IFRS Measures: Definitions and Use
1. Adjusted EBITDA
Adjusted EBITDA is defined as loss for the period before depreciation, amortization, profit on disposal of intangible assets, net finance costs, 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), 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 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
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
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 |
|||
|
2022 |
2021 |
||
|
|
|
|
|
Revenue |
|
|
||
Commercial % of total revenue |
|
|
||
Broadcasting % of total revenue |
|
|
||
Matchday % of total revenue |
|
|
||
|
|
|
|
|
|
2022/23 Season |
2021/22 Season |
||
Home Matches Played |
|
|
|
|
PL |
3 |
3 |
||
|
1 |
1 |
||
Domestic Cups |
- |
1 |
||
Away Matches Played |
|
|
|
|
PL |
3 |
3 |
||
|
1 |
1 |
||
Domestic Cups |
- |
- |
||
|
|
|
|
|
Other |
|
|
||
Employees at period end |
1,205 |
1,044 |
||
Employee benefit expenses % of revenue |
|
|
||
CONSOLIDATED STATEMENT OF PROFIT OR LOSS
(unaudited; in £ thousands, except per share and shares outstanding data)
|
Three months ended 30 September |
|
|
2022 |
2021 |
Revenue from contracts with customers |
143,654 |
126,461 |
Operating expenses |
(163,644) |
(154,103) |
Profit on disposal of intangible assets |
16,608 |
17,476 |
Operating loss |
(3,382) |
(10,166) |
Finance costs |
(49,730) |
(15,964) |
Finance income |
18,742 |
6,310 |
Net finance costs |
(30,988) |
(9,654) |
Loss before income tax |
(34,370) |
(19,820) |
Income tax credit |
7,854 |
4,281 |
Loss for the period |
(26,516) |
(15,539) |
|
|
|
Basic and diluted loss per share: |
|
|
Basic and diluted loss per share (pence) (1) |
(16.26) |
(9.53) |
Weighted average number of ordinary shares used as the denominator in calculating basic and diluted loss per share (thousands) (1) |
163,062 |
162,996 |
(1) For the three months ended
CONSOLIDATED BALANCE SHEET
(unaudited; in £ thousands)
|
As of |
||
|
30 September 2022 |
30 June 2022 |
30 September 2021 |
ASSETS |
|
|
|
Non-current assets |
|
|
|
Property, plant and equipment |
244,642 |
242,661 |
247,298 |
Right-of-use assets |
3,677 |
4,072 |
3,955 |
Investment properties |
20,203 |
20,273 |
20,483 |
Intangible assets |
920,941 |
743,278 |
848,859 |
Deferred tax asset |
644 |
- |
- |
Trade receivables |
19,325 |
29,757 |
42,736 |
Derivative financial instruments |
36,683 |
16,462 |
5,121 |
|
1,246,115 |
1,056,503 |
1,168,452 |
Current assets |
|
|
|
Inventories |
3,752 |
2,200 |
2,771 |
Prepayments |
30,912 |
15,534 |
25,781 |
Contract assets – accrued revenue |
46,139 |
36,239 |
35,357 |
Trade receivables |
51,224 |
49,210 |
46,715 |
Other receivables |
1,929 |
1,569 |
1,261 |
Income tax receivable |
4,547 |
4,590 |
1,108 |
Derivative financial instruments |
12,137 |
6,597 |
1,308 |
Cash and cash equivalents |
24,277 |
121,223 |
98,666 |
|
174,917 |
237,162 |
212,967 |
Total assets |
1,421,032 |
1,293,665 |
1,381,419 |
CONSOLIDATED BALANCE SHEET (continued)
(unaudited; in £ thousands)
|
As of |
||
|
30 September 2022 |
30 June 2022 |
30 September 2021 |
EQUITY AND LIABILITIES |
|
|
|
Equity |
|
|
|
Share capital |
53 |
53 |
53 |
Share premium |
68,822 |
68,822 |
68,822 |
|
(21,305) |
(21,305) |
(21,305) |
Merger reserve |
249,030 |
249,030 |
249,030 |
Hedging reserve |
659 |
950 |
(10,606) |
Retained deficit |
(196,029) |
(170,042) |
(39,325) |
|
101,230 |
127,508 |
246,669 |
Non-current liabilities |
|
|
|
Deferred tax liabilities |
- |
7,402 |
30,814 |
Contract liabilities - deferred revenue |
20,382 |
16,697 |
16,829 |
Trade and other payables |
172,977 |
102,347 |
105,246 |
Borrowings |
577,367 |
530,365 |
476,156 |
Lease liabilities |
2,588 |
2,869 |
2,996 |
Derivative financial instruments |
- |
49 |
4,820 |
Provisions |
11,706 |
11,586 |
4,373 |
|
785,020 |
671,315 |
641,234 |
Current liabilities |
|
|
|
Contract liabilities - deferred revenue |
171,344 |
165,847 |
189,675 |
Trade and other payables |
258,443 |
220,587 |
233,713 |
Income tax liabilities |
- |
- |
6,093 |
Borrowings |
102,892 |
105,757 |
62,247 |
Lease liabilities |
1,000 |
1,561 |
943 |
Derivative financial instruments |
- |
32 |
188 |
Provisions |
1,103 |
1,058 |
657 |
|
534,782 |
494,842 |
493,516 |
Total equity and liabilities |
1,421,032 |
1,293,665 |
1,381,419 |
CONSOLIDATED STATEMENT OF CASH FLOWS
(unaudited; in £ thousands)
|
Three months ended 30 September |
|
|
2022 |
2021 |
Cash flow from operating activities |
|
|
Cash generated from operations (see supplemental note 4) |
3,619 |
71,687 |
Interest paid |
(9,628) |
(7,792) |
Interest received |
18 |
2 |
Tax paid |
(52) |
(335) |
Net cash (outflow)/inflow from operating activities |
(6,043) |
63,562 |
Cash flow from investing activities |
|
|
Payments for property, plant and equipment |
(4,393) |
(3,628) |
Payments for intangible assets |
(100,024) |
(72,200) |
Proceeds from sale of intangible assets |
11,662 |
11,083 |
Net cash outflow from investing activities |
(92,755) |
(64,745) |
Cash flow from financing activities |
|
|
Principal elements of lease payments |
(878) |
(416) |
Dividends paid |
- |
(10,669) |
Net cash outflow from financing activities |
(878) |
(11,085) |
Net decrease in cash and cash equivalents |
(99,676) |
(12,268) |
Cash and cash equivalents at beginning of period |
121,223 |
110,658 |
Effect of exchange rate changes on cash and cash equivalents |
2,730 |
276 |
Cash and cash equivalents at end of period |
24,277 |
98,666 |
SUPPLEMENTAL NOTES
1 General information
2 Reconciliation of loss for the period to adjusted EBITDA
|
Three months ended 30 September |
|
|
2022 £’000 |
2021 £’000 |
Loss for the period |
(26,516) |
(15,539) |
Adjustments: |
|
|
Income tax credit |
(7,854) |
(4,281) |
Net finance costs |
30,988 |
9,654 |
Profit on disposal of intangible assets |
(16,608) |
(17,476) |
Amortization |
40,139 |
35,134 |
Depreciation |
3,478 |
3,691 |
Adjusted EBITDA |
23,627 |
11,183 |
3 Reconciliation of loss for the period to adjusted loss for the period and adjusted basic and diluted loss per share
|
Three months ended 30 September |
||
|
2022 £’000 |
2021 £’000 |
|
Loss for the period |
(26,516) |
(15,539) |
|
Foreign exchange losses on unhedged US dollar denominated borrowings |
40,440 |
9,969 |
|
Fair value movement on embedded foreign exchange derivatives |
(18,612) |
(5,982) |
|
Income tax credit |
(7,854) |
(4,281) |
|
Adjusted loss before income tax |
(12,542) |
(15,833) |
|
Adjusted income tax credit (using a normalized tax rate of |
2,634 |
3,325 |
|
Adjusted loss for the period (i.e. adjusted net loss) |
(9,908) |
(12,508) |
|
|
|
|
|
Adjusted basic and diluted loss per share: |
|
|
|
Adjusted basic and diluted loss per share (pence) (1) |
(6.08) |
(7.67) |
|
Weighted average number of ordinary shares used as the denominator in calculating basic and diluted loss per share (thousands) (1) |
163,062 |
162,996 |
|
(1) For the three months ended
4 Cash generated from operations
|
Three months ended 30 September |
|
|
2022 £’000 |
2021 £’000 |
Loss for the period |
(26,516) |
(15,539) |
Income tax credit |
(7,854) |
(4,281) |
Loss before income tax |
(34,370) |
(19,820) |
Adjustments for: |
|
|
Depreciation |
3,478 |
3,691 |
Amortization |
40,139 |
35,134 |
Profit on disposal of intangible assets |
(16,608) |
(17,476) |
Net finance costs |
30,988 |
9,654 |
Non-cash employee benefit expense - equity-settled share-based payments |
529 |
535 |
Foreign exchange (gains)/losses on operating activities |
(1,173) |
96 |
Reclassified from hedging reserve |
(163) |
(60) |
Changes in working capital: |
|
|
Inventories |
(1,552) |
(691) |
Prepayments |
(15,566) |
(18,527) |
Contract assets – accrued revenue |
(9,900) |
5,187 |
Trade receivables |
15,983 |
291 |
Other receivables |
(360) |
(801) |
Contract liabilities – deferred revenue |
9,182 |
65,578 |
Trade and other payables |
(17,153) |
8,668 |
Provisions |
165 |
228 |
Cash generated from operations |
3,619 |
71,687 |
View source version on businesswire.com: https://www.businesswire.com/news/home/20221205005840/en/
Investor Relations:
Head of Investor Relations
+44 738 491 0828
Corinna.Freedman@manutd.co.uk
Media Relations:
Director of Media Relations & Public Affairs
+44 161 676 7770
andrew.ward@manutd.co.uk
Source:
FAQ
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