Manchester United PLC Reports Second Quarter Fiscal 2023 Results

Rhea-AI Summary

Manchester United (NYSE: MANU) reported its financial results for the second quarter of fiscal 2023, ending 31 December 2022, with a net profit of £6.3 million. The club's total revenue declined by 9.8% to £167.3 million, impacted by a 32.1% drop in broadcasting revenue due to the shift from UEFA Champions League to Europa League. However, commercial revenue surged by 22.2% to £78.7 million, driven by strong sponsorship growth. The club maintains its revenue guidance of £590-£610 million and adjusted EBITDA guidance of £125-£140 million for the fiscal year. Attendance and hospitality revenues reached record levels, marking a strong fan engagement.

Positive

• Commercial revenue increased by 22.2% to £78.7 million.
• Net profit of £6.3 million compared to a loss of £1.4 million in the prior year.
• Retention of revenue guidance at £590-£610 million for fiscal 2023.

Negative

• Total revenue decreased by 9.8% to £167.3 million.
• Broadcasting revenue fell by 32.1% due to UEFA Europa League participation.
• Matchday revenue declined by 13.6% with two fewer home games.

Key Points

• The men’s first team won the Carabao Cup on 26 February at Wembley for the 6^th time; the team also advances to the FA Cup Semi-finals
• For the 2022/23 domestic and European seasons to date, the men’s first team is currently in third place in the Premier League and has advanced to the UEFA Europa League Quarter-finals
• For the 2022/23 Women’s Super League season, the women’s team is currently in first place in the league and has advanced to the Semi-finals of the Women’s FA Cup
• Club continues to achieve record-breaking attendance and Matchday hospitality revenues, as well as record global memberships and record Museum & Tour visits; season to date 2022/23 ticket sales have surpassed the record set in 2016/17
• Club recently announced a return to the US for its Summer Tour 2023 with a first announced match against Wrexham AFC in San Diego at Snapdragon Stadium on 25 July
• For fiscal 2023, the Company reiterates its previous revenue guidance of £590 million to £610 million and its adjusted EBITDA guidance of £125 million to £140 million
• Company reports net profit for the second quarter of £6.3 million

MANCHESTER, England--(BUSINESS WIRE)-- 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 2023 fiscal second quarter ended 31 December 2022.

Outlook
For fiscal 2023, the Company reiterates its previous revenue guidance of £590 million to £610 million and its previous adjusted EBITDA guidance of £125 million to £140 million.

Phasing of Premier League games		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

Key Financials (unaudited)

£ million (except earnings/(loss) per share)	Three months ended 31 December			Six months ended 31 December
	2022	2021	Change	2022	2021	Change
Commercial revenue	78.7	64.4	22.2%	166.1	128.8	29.0%
Broadcasting revenue	58.7	86.4	(32.1%)	93.7	129.7	(27.8%)
Matchday revenue	29.9	34.6	(13.6%)	51.2	53.4	(4.1%)
Total revenue	167.3	185.4	(9.8%)	311.0	311.9	(0.3%)
Adjusted EBITDA(1)	48.3	57.9	(9.6%)	71.9	69.1	4.1%
Operating (loss)/profit	(2.9)	5.4	-	(6.3)	(4.8)	31.2%
Profit/(loss) for the period (i.e. net income/(loss))	6.3	(1.4)	-	(20.2)	(16.9)	19.5%
Basic earnings/(loss) per share (pence)	3.87	(0.86)	-	(12.39)	(10.39)	19.2%
Adjusted (loss)/profit for the period (i.e. adjusted net (loss)/income)(1)	(10.1)	7.4	-	(20.0)	(5.1)	292.2%
Adjusted basic (loss)/earnings per share (pence)(1)	(6.18)	4.54	-	(12.26)	(3.14)	290.4%
Non-current borrowings in USD (contractual currency)(2)	$650.0	$650.0	0.0%	$650.0	$650.0	0.0%

(1) Adjusted EBITDA, adjusted (loss)/profit for the period and adjusted basic (loss)/earnings 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 31 December 2022 was £200.0 million and total current borrowings including accrued interest payable was £206.2 million. Based on the club’s expected seasonal working capital cycle, it is anticipated that the club would be able to reduce the balance on the club’s facilities to zero at June 30, 2023.

Football

• The men’s first team won the Carabao Cup on 26 February at Wembley for the 6^th time
• The men’s first team advances to the Semi-finals of the FA Cup
• For the 2022/23 domestic and European seasons to date, the men’s first team is currently in third place in the Premier League and has advanced to the UEFA Europa League Quarter-finals
• In the January transfer window, the men’s first team signed Marcel Sabitzer, Wout Weghorst and Jack Butland on loan until the end of the 2022/23 season
• For the 2022/23 Women’s Super League season, the women’s team is currently placed first in the league and has advanced to the Semi-finals of the Women’s FA Cup
• In the January transfer window, the women’s team signed Jayde Riviere, Estelle Cascarino and Lisa Naalsund
• Club appointed David Harrison as Director of Football Operations
• Club recently announced a return to the US for its Summer Tour 2023 with a first announced match against Wrexham AFC in San Diego at Snapdragon Stadium on 25 July; information on additional tour matches in the US will be released in the upcoming weeks

Fan Engagement

• Club held quarterly meetings of the Fans’ Advisory Board and the Fans’ Forum
• Implemented the Premier League Fan Engagement Standard
• Following consultation with fan representatives, the Club committed to restore the Stretford End to all-general admission seating in time for the 2024/25 season
• During the quarter, fan supporters’ clubs reached a record 275 clubs in 94 countries
• Partnered with fan groups to commemorate 65^th anniversary of the Munich Air Disaster at events in Munich and Manchester attended by thousands of fans on 6 February
• Red and white scarves were gifted to the 33,000 United fans who travelled to the Carabao Cup Final at Wembley on 26 February

Facilities – Venue and Operations

• Record match attendance and match-by-match hospitality revenues were driven by strong pitch performance across all competitions; ticket sales for the current 2022/23 season have surpassed the record set in 2016/17 totalling a cumulative 2.3 million tickets sold
• Record sales of global memberships, including sell-out of a new Premium Membership tier; memberships currently stand at 360,000 for the 2022/23 season, the largest paid membership program in world sport; in February, the club also launched a dedicated Junior membership package tailored to a younger fanbase
• Continued exceptional demand for tickets, with over 145,000 individuals currently on the Season Ticket waiting list; 2023/24 renewals were launched in February, with prices of adult Season Tickets increasing by approximately 5%, following 11 consecutive seasons of frozen ticket pricing; ticket prices at Old Trafford – along with matchday food and beverage prices – remain among the most affordable in the Premier League
• Continued momentum in demand for women’s football with Leigh Sport Village ticket sales at the end of the second quarter approximately 60% higher than the entire 2021/22 season
• During the second quarter, Old Trafford hosted a third Women’s Super League fixture against Aston Villa on 3 December
• Old Trafford hosted the Rugby League World Cup final on 19 November

Partnerships

• On 15 December, the Club and its primary shirt sponsor, TeamViewer mutually agreed that Manchester United has the option to buy back the rights to the front of shirt sponsorship; TeamViewer will remain the primary shirt sponsor under the original financial terms during the interim period
• Club held an #ILoveUnited event in Kolkata, India, in October with a record-breaking fan attendance featuring activations from 15 global partners for the largest ever football screening in India
• On 5 March, Club held an #ILoveUnited event in Los Angeles with activations from 19 global partners
• Successfully launched a new global partnership with Doo Group
• Club attended the World Economic Forum in Davos

Digital Products & Experiences

• Club gained more than 3.5 million followers and generated more than 395 million digital interactions and 1.15 billion video views across all global social platforms in the second quarter
• Club launched its first digital collectibles in partnership with Tezos; the launch was the biggest in sport consisting of two ‘drops’ during December, including a sell-out for the first paid drop; more digital collectibles will be released throughout 2023
• Club launched a Discord community in November with a following of ~85,000 members, the biggest in football
• Record-breaking first year on TikTok for the Manchester United Women’s account; the first women’s team to reach 500k followers and 6 million video likes

Revenue Analysis

Commercial
Commercial revenue for the quarter was £78.7 million, an increase of £14.3 million, or 22.2%, over the prior year quarter.

• Sponsorship revenue was £50.4 million, an increase of £15.2 million, or 43.2%, over the prior year quarter due to the impact of our training kit agreement with Tezos, together with a one-off sponsorship credit.
• Retail, Merchandising, Apparel & Product Licensing revenue was £28.3 million, a decrease of £0.9 million, or 3.1%, over the prior year quarter.

Broadcasting
Broadcasting revenue for the quarter was £58.7 million, a decrease of £27.7 million, or 32.1%, over the prior year quarter, primarily due to the men’s first team participating in the UEFA Europa League compared to the UEFA Champions League in the prior year.

Matchday
Matchday revenue for the quarter was £29.9 million, a decrease of £4.7 million, or 13.6%, over the prior year quarter, due to playing two less home games in the current year quarter compared to the prior year quarter.

Other Financial Information

Operating expenses
Total operating expenses for the quarter were £167.6 million, a decrease of £12.1 million, or 6.7%, over the prior year quarter.

Employee benefit expenses
Employee benefit expenses for the quarter were £77.3 million, a decrease of £20.4 million, or 20.9%, over the prior year quarter, as a result of squad turnover and the men’s first team not participating in the UEFA Champions League in the current year.

Other operating expenses
Other operating expenses for the quarter were £41.7 million, an increase of £11.9 million, or 39.9%, over the prior year quarter. This is primarily due to the impact of exchange rate fluctuations and rising energy and maintenance costs.

Depreciation and amortization
Depreciation for the quarter was £3.6 million, consistent with the prior year quarter. Amortization for the quarter was £45.0 million, an increase of £6.4 million, or 16.6%, over the prior year quarter, due to investment in the first team playing squad. The unamortized balance of registrations at 31 December 2022 was £445.1 million.

Loss on disposal of intangible assets
Loss on disposal of intangible assets for the quarter was £2.6 million, compared to a loss of £0.3 million for the prior year quarter.

Net finance income/(costs)
Net finance income for the quarter was £12.1 million, compared to net finance costs of £7.5 million in the prior year quarter, due to a favourable swing in unrealized foreign exchange movements in the current quarter compared to an unfavourable swing in the prior year quarter. Income for the current year quarter includes £22.0 million of unrealized non-cash foreign exchange net gains.

Income tax
The income tax expense for the quarter was £2.9 million, compared to an income tax credit of £0.7 million in the prior year quarter.

Cash flows
Overall cash and cash equivalents (including the effects of exchange rate movements) increased by £6.7 million in the quarter to 31 December 2022, compared to a decrease of £11.3 million in the prior year quarter.

Net cash outflow from operating activities for the quarter was £61.5 million, compared to £31.5 million in the prior year quarter.

Net capital expenditure on property, plant and equipment for the quarter was £2.7 million, an increase of £0.9 million over the prior year quarter.

Net capital expenditure on intangible assets for the quarter was £27.8 million, an increase of £11.0 million over the prior year quarter.

Net cash inflow from financing activities for the quarter was £99.4 million, compared to £39.5 million in the prior year quarter. This is due to a £100.0 million drawdown on the revolving credit facilities in the current quarter compared to a £40.0 million drawdown on the revolving credit facilities in the prior year quarter.

Balance sheet
Our USD non-current borrowings as of 31 December 2022 were $650 million, which was unchanged from 31 December 2021. As a result of the year-on-year change in the USD/GBP exchange rate from 1.3486 at 31 December 2021 to 1.2040 at 31 December 2022, our non-current borrowings when converted to GBP were £535.7 million, compared to £477.1 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 2022 were £206.2 million compared to £105.2 million at 31 December 2021.

As of 31 December 2022, cash and cash equivalents were £31.0 million compared to £87.4 million at the prior year quarter, primarily due to 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 145-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. 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.

Non-IFRS Measures: Definitions and Use

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

Key Performance Indicators

	Three months ended		Six months ended
	31 December		31 December
	2022	2021	2022	2021
Revenue
Commercial % of total revenue	47.0%	34.7%	53.4%	41.3%
Broadcasting % of total revenue	35.1%	46.6%	30.1%	41.6%
Matchday % of total revenue	17.9%	18.7%	16.5%	17.1%
	2022/23 Season	2021/22 Season	2022/23 Season	2021/22 Season
Home Matches Played
PL	4	6	7	9
UEFA competitions	2	2	3	3
Domestic Cups	2	-	2	1
Away Matches Played
PL	6	6	9	9
UEFA competitions	2	2	3	3
Domestic Cups	-	-	-	-
Other
Employees at period end	1,233	1,184	1,233	1,184
Employee benefit expenses % of revenue	46.2%	52.7%	51.3%	59.7%

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
		2022			2021			2022			2021
Revenue from contracts with customers		167,368			185,440			311,022			311,901
Operating expenses		(167,640	)		(179,717	)		(331,284	)		(333,820	)
(Loss)/profit on disposal of intangible assets		(2,588	)		(318	)		14,020			17,158
Operating loss		(2,860	)		5,405			(6,242	)		(4,761	)
Finance costs (1)		(26,277	)		(7,473	)		(21,956	)		(22,591	)
Finance income (1)		38,392			1			3,083			5,465
Net finance income/(costs)		12,115			(7,472	)		(18,873	)		(17,126	)
Profit/(loss) before income tax		9,255			(2,067	)		(25,115	)		(21,887	)
Income tax (expense)/credit		(2,949	)		665			4,905			4,946
Profit/(loss) for the period		6,306			(1,402	)		(20,210	)		(16,941	)
Basic earnings/(loss) per share:
Basic earnings/(loss) per share (pence)		3.87			(0.86	)		(12.39	)		(10.39	)
Weighted average number of ordinary shares used as the denominator in calculating basic earnings/(loss) per share (thousands)		163,062			163,003			163,062			162,999
Diluted earnings/(loss) per share:
Diluted earnings/(loss) per share (pence) (2)		3.85			(0.86	)		(12.39	)		(10.39	)
Weighted average number of ordinary shares and potential ordinary shares used as the denominator in calculating diluted earnings/(loss) per share (thousands) (2)		163,605			163,003			163,062			162,999

(1) Each element of finance costs and finance income is split based on its position in both the 3 months ended 31 December 2022 and the 6 months ended 31 December 2022. In the current year, exchange rate fluctuations have resulted in costs and income for the 3 months ended 31 December 2022 that are greater than the total net position across the 6 months ended 31 December 2022.

(2) For the six months ended 31 December 2022 and three and six months ended 31 December 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.

CONSOLIDATED BALANCE SHEET
(unaudited; in £ thousands)
		As of
		31 December 2022		30 June 2022		31 December 2021
ASSETS
Non-current assets
Property, plant and equipment		243,434		242,661		245,845
Right-of-use assets		3,353		4,072		3,747
Investment properties		20,133		20,273		20,413
Intangible assets		871,529		743,278		812,252
Trade receivables		21,224		29,757		41,024
Derivative financial instruments		22,189		16,462		4,434
		1,181,862		1,056,503		1,127,715
Current assets
Inventories		3,272		2,200		2,876
Prepayments		26,087		15,534		20,852
Contract assets – accrued revenue		53,505		36,239		69,828
Trade receivables		116,409		49,210		54,063
Other receivables		2,426		1,569		1,110
Income tax receivable		4,479		4,590		834
Derivative financial instruments		7,876		6,597		1,146
Cash and cash equivalents		31,045		121,223		87,434
		245,099		237,162		238,143
Total assets		1,426,961		1,293,665		1,365,858

CONSOLIDATED BALANCE SHEET (continued)
(unaudited; in £ thousands)
		As of
		31 December 2022			30 June 2022			31 December 2021
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		2,249			950			(9,561	)
Retained deficit		(189,097	)		(170,042	)		(40,294	)
		109,752			127,508			246,745
Non-current liabilities
Deferred tax liabilities		2,413			7,402			30,422
Contract liabilities - deferred revenue		7,274			16,697			24,610
Trade and other payables		160,495			102,347			102,553
Borrowings		535,654			530,365			477,052
Lease liabilities		2,475			2,869			2,994
Derivative financial instruments		519			49			3,908
Provisions		89			11,586			4,589
		708,919			671,315			646,128
Current liabilities
Contract liabilities - deferred revenue		160,554			165,847			155,931
Trade and other payables		227,772			220,587			207,346
Income tax liabilities		-			-			2,131
Borrowings		206,246			105,757			105,185
Lease liabilities		804			1,561			763
Derivative financial instruments		-			32			859
Provisions		12,914			1,058			770
		608,290			494,842			472,985
Total equity and liabilities		1,426,961			1,293,665			1,365,858

CONSOLIDATED STATEMENT OF CASH FLOWS
(unaudited; in £ thousands)
		Three months ended 31 December						Six months ended 31 December
		2022			2021			2022			2021
Cash flows from operating activities
Cash (used in)/generated from operations (see supplemental note 4)		(56,633	)		(25,567	)		(53,014	)		46,120
Interest paid		(4,595	)		(2,161	)		(14,223	)		(9,953	)
Interest received		59			1			77			3
Tax paid		(340	)		(3,766	)		(392	)		(4,101	)
Net cash (outflow)/inflow from operating activities		(61,509	)		(31,493	)		(67,552	)		32,069
Cash flows from investing activities
Payments for property, plant and equipment		(2,706	)		(1,874	)		(7,099	)		(5,502	)
Payments for intangible assets		(29,868	)		(18,715	)		(129,892	)		(90,915	)
Proceeds from sale of intangible assets		2,071			1,932			13,733			13,015
Net cash outflow from investing activities		(30,503	)		(18,657	)		(123,258	)		(83,402	)
Cash flows from financing activities
Proceeds from borrowings		100,000			40,000			100,000			40,000
Principal elements of lease payments		(571	)		(432	)		(1,449	)		(848	)
Dividends paid		-			-			-			(10,669	)
Net cash inflow from financing activities		99,429			39,568			98,551			28,483
Net increase/(decrease) in cash and cash equivalents		7,417			(10,582	)		(92,259	)		(22,850	)
Cash and cash equivalents at beginning of period		24,277			98,666			121,223			110,658
Effects of exchange rate changes on cash and cash equivalents		(649	)		(650	)		2,081			(374	)
Cash and cash equivalents at end of period		31,045			87,434			31,045			87,434

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
		2022 £’000			2021 £’000			2022 £’000			2021 £’000
Profit/(loss) for the period		6,306			(1,402	)		(20,210	)		(16,941	)
Adjustments:
Income tax expense/(credit)		2,949			(665	)		(4,905	)		(4,946	)
Net finance (income)/costs		(12,115	)		7,472			18,873			17,126
Loss/(profit) on disposal of intangible assets		2,588			318			(14,020	)		(17,158	)
Exceptional items		-			9,992			-			9,992
Amortization		44,971			38,653			85,110			73,787
Depreciation		3,609			3,579			7,087			7,270
Adjusted EBITDA		48,308			57,947			71,935			69,130

3 Reconciliation of profit for the period to adjusted (loss)/profit for the period and adjusted basic and diluted (loss)/earnings per share

		Three months ended 31 December						Six months ended 31 December
		2022 £’000			2021 £’000			2022 £’000			2021 £’000
Profit/(loss) for the period		6,306			(1,402	)		(20,210	)		(16,941	)
Exceptional items		-			9,992			-			9,992
Foreign exchange (gains)/losses on unhedged US dollar denominated borrowings		(37,737	)		591			2,703			10,560
Fair value loss/(gain) on embedded foreign exchange derivatives		15,720			846			(2,892	)		(5,136	)
Income tax expense/(credit)		2,949			(665	)		(4,905	)		(4,946	)
Adjusted (loss)/profit before income tax		(12,762	)		9,362			(25,304	)		(6,471	)
Adjusted income tax credit/(expense) (using a normalized tax rate of 21% (2021: 21%))		2,680			(1,966	)		5,314			1,359
Adjusted (loss)/profit for the period (i.e. adjusted net (loss)/income)		(10,082	)		7,396			(19,990	)		(5,112	)
Adjusted basic (loss)/earnings per share:
Adjusted basic (loss)/earnings per share (pence)		(6.18	)		4.54			(12.26	)		(3.14	)
Weighted average number of ordinary shares used as the denominator in calculating adjusted basic (loss)/earnings per share (thousands)		163,062			163,003			163,062			162,999
Adjusted diluted (loss)/earnings per share:
Adjusted diluted (loss)/earnings per share (pence)(1)		(6.18	)		4.52			(12.26	)		(3.14	)
Weighted average number of ordinary shares and potential ordinary shares used as the denominator in calculating adjusted diluted (loss)/earnings per share (thousands) (1)		163,062			163,504			163,062			162,999

(1) For the three and six months ended 31 December 2022 and the six months ended 31 December 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.

4 Cash (used in)/generated from operations

		Three months ended 31 December						Six months ended 31 December
		2022 £’000			2021 £’000			2022 £’000			2021 £’000
Profit/(loss) for the period		6,306			(1,402	)		(20,210	)		(16,941	)
Income tax expense/(credit)		2,949			(665	)		(4,905	)		(4,946	)
Profit/(loss) before income tax		9,255			(2,067	)		(25,115	)		(21,887	)
Adjustments for:
Depreciation		3,609			3,579			7,087			7,270
Amortization		44,971			38,653			85,110			73,787
Loss/(profit) on disposal of intangible assets		2,588			318			(14,020	)		(17,158	)
Net finance (income)/costs		(12,115	)		7,472			18,873			17,126
Non-cash employee benefit expense – equity-settled share-based payments		626			433			1,155			968
Foreign exchange losses/(gains) on operating activities		5,140			(398	)		3,967			(302	)
Reclassified from hedging reserve		(367	)		90			(530	)		30
Changes in working capital:
Inventories		480			(105	)		(1,072	)		(796	)
Prepayments		4,638			4,776			(10,928	)		(13,751	)
Contract assets – accrued revenue		(7,366	)		(34,471	)		(17,266	)		(29,284	)
Trade receivables		(64,070	)		(5,832	)		(48,087	)		(5,541	)
Other receivables		(497	)		151			(857	)		(650	)
Contract liabilities – deferred revenue		(23,898	)		(25,963	)		(14,716	)		39,615
Trade and other payables		(19,821	)		(12,532	)		(36,974	)		(3,864	)
Provisions		194			329			359			557
Cash (used in)/generated from operations		(56,633	)		(25,567	)		(53,014	)		46,120

 

View source version on businesswire.com: https://www.businesswire.com/news/home/20230327005683/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

Source: Manchester United PLC

FAQ

What are Manchester United's latest financial results for Q2 2023?

Manchester United reported a net profit of £6.3 million for the second quarter of fiscal 2023, with total revenue declining by 9.8% to £167.3 million.

How did Manchester United's commercial revenue perform?

Commercial revenue increased by 22.2% to £78.7 million, driven by a strong sponsorship growth.

What is Manchester United's revenue guidance for fiscal 2023?

The club reaffirms its revenue guidance at £590 million to £610 million and adjusted EBITDA guidance of £125 million to £140 million.

How has Manchester United's broadcasting revenue changed?

Broadcasting revenue decreased by 32.1% to £58.7 million due to the team's participation in the UEFA Europa League.

What impact did attendance have on Manchester United's financial results?

Attendance and matchday hospitality revenues reached record levels, contributing positively to fan engagement.