Manchester United plc 6-K, filed Jul 10, 2024
Manchester United plc (MANU)
About this 6-K
Manchester United plc filed this 6-K on July 10, 2024.
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 6-K
REPORT OF FOREIGN PRIVATE ISSUER
PURSUANT TO RULE 13A-16 OR 15D-16
UNDER THE SECURITIES EXCHANGE ACT OF 1934
For the month of July, 2024
Commission File Number: 001-35627
MANCHESTER UNITED PLC
(Translation of registrant’s name into English)
Old Trafford
Manchester M16 0RA
United Kingdom
(Address of principal executive offices)
Indicate by check mark whether the registrant files or will file annual reports under cover of Form 20-F or Form 40-F. Form 20-F x Form 40-F ¨
Indicate by check mark if the registrant is submitting the Form 6-K in paper as permitted by Regulation S-T Rule 101(b)(1). ¨
Indicate by check mark if the registrant is submitting the Form 6-K in paper as permitted by Regulation S-T Rule 101(b)(7). ¨
SIGNATURE
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.
Date: July 10, 2024
| MANCHESTER UNITED PLC | ||
| By: | /s/ Roger Bell | |
Name: Roger Bell | ||
| Title: Chief Financial Officer | ||
EXHIBIT INDEX
| Exhibit Number |
Description | |
| 99.1 | Press Release of Manchester United plc, dated July 10, 2024 |
Exhibit 99.1
 |  |
|
| CORPORATE RELEASE | 10 July 2024 |
Manchester United Plc Reports
Third Quarter Fiscal 2024 Results
Key Points
| · | The Men’s first team won the FA Cup final on 25 May and finished the 2023/24 season in eighth position; for the 2024/25 season the club has qualified for the UEFA Europa League |
| · | The Women’s team won the FA Cup final on 12 May and finished the 2023/24 Women’s Super League season in fifth position |
| · | The Under 18 Men’s team won the Premier League North title and the U18 Premier League Cup, while the Academy celebrated its 250th graduate to debut in the men’s first team |
| · | On 1 July, Dan Ashworth joined the club as Sporting Director and on 4 July, the club extended Erik ten Hag’s contract through June 2026 |
| · | Club continues to achieve record-breaking attendance and Matchday revenues, as well as record global memberships with 433K memberships sold for the 2023/24 season |
| · | For the upcoming 2024/25 season, the Club has raised general admission season ticket prices by 5%; season ticket and Executive Club memberships sold out in record time and with the second-lowest ever churn rate of less than 4% |
| · | Club achieved record-breaking sales of the adidas Stone Roses range, with the biggest ever launch day for non-kit product; new e-commerce platform launch with SCAYLE remains on plan for September; the new 2024/25 Home kit featuring new front-of-shirt sponsor, Snapdragon, launched on 1 July |
| · | On 3 July, the Club announced it would be commencing a proposed redundancy program, which will involve a formal legal consultation process and may reduce headcount by approximately 250 jobs |
| · | Planned summer maintenance projects include the expansion of rail seating, catering kiosk refurbishments, and hospitality suite upgrades, in addition to major improvements to the main building at the Carrington Training Complex |
| · | For fiscal 2024, the Company now expects approximate full year revenues of a record £660 million, in line with the previous guidance range of £635 million to £665 million; adjusted EBITDA for the full fiscal year 2024 is expected to be approximately £140 million, in line with previously provided guidance range of £125 million to £150 million |
Outlook
For fiscal 2024, the Company is revising its previously provided revenue guidance to an expected record of approximately £660 million, in line with the previously provided range of £635 million to £665 million. Adjusted EBITDA for the full fiscal year is now expected to be approximately £140 million for fiscal 2024, in line with previous guidance range 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 | |||||||||||||||
1
Key Financials (unaudited)
Three months ended 31 March | Nine months ended 31 March | |||||||||||||||||||||||
| £ million (except loss per share) | 2024 | 2023 | Change | 2024 | 2023 | Change | ||||||||||||||||||
| Commercial revenue | 69.6 | 69.4 | 0.3 | % | 231.7 | 235.5 | (1.6 | )% | ||||||||||||||||
| Broadcasting revenue | 37.5 | 50.7 | (26.0 | )% | 183.3 | 144.5 | 26.9 | % | ||||||||||||||||
| Matchday revenue | 29.6 | 49.9 | (40.7 | )% | 104.5 | 101.1 | 3.4 | % | ||||||||||||||||
| Total revenue | 136.7 | 170.0 | (19.6 | )% | 519.5 | 481.1 | 8.0 | % | ||||||||||||||||
| Adjusted EBITDA(1) | 13.7 | 39.7 | (65.5 | )% | 128.3 | 111.7 | 14.9 | % | ||||||||||||||||
| Operating loss | (66.2 | ) | (4.7 | ) | (1,308.5 | )% | (36.9 | ) | (10.9 | ) | (238.5 | )% | ||||||||||||
| Loss for the period (i.e. net loss) | (71.4 | ) | (5.6 | ) | (1,175.0 | )% | (76.9 | ) | (25.8 | ) | (198.1 | )% | ||||||||||||
| Basic loss per share (pence) | (43.12 | ) | (3.40 | ) | (1,151.5 | )% | (46.87 | ) | (15.80 | ) | (196.6 | )% | ||||||||||||
| Adjusted loss for the period (i.e. adjusted net loss)(1) | (40.6 | ) | (12.1 | ) | (235.5 | )% | (29.9 | ) | (32.1 | ) | 6.9 | % | ||||||||||||
| Adjusted basic loss per share (pence)(1) | (24.47 | ) | (7.41 | ) | (230.2 | )% | (18.22 | ) | (19.66 | ) | 7.3 | % | ||||||||||||
| 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 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 31 March 2024 was £140.0 million and total current borrowings including accrued interest payable was £143.0 million.
2
Revenue Analysis
Commercial
Commercial revenue for the quarter was £69.6 million, an increase of £0.2 million, or 0.3%, over the prior year quarter.
| · | Sponsorship revenue was £40.7 million, a decrease of £0.3 million, or 0.7%, over the prior year quarter. |
| · | Retail, Merchandising, Apparel & Product Licensing revenue was £28.9 million, an increase of £0.5 million, or 1.8%, over the prior year quarter, due to the extension of our agreement with adidas, partially offset by lower Megastore sales resulting from fewer matches being played at Old Trafford in the quarter. |
Broadcasting
Broadcasting revenue for the quarter was £37.5 million, a decrease of £13.2 million, or 26.0%, over the prior year quarter, due to the men’s first team playing in fewer matches in the quarter, in both continental and domestic competitions.
Matchday
Matchday revenue for the quarter was £29.6 million, a decrease of £20.3 million, or 40.7%, over the prior year quarter, due to playing 9 fewer home matches in the current year quarter, compared to the prior year quarter.
Other Financial Information
Operating expenses
Total operating expenses for the quarter were £203.7 million, an increase of £27.0 million, or 15.3%, over the prior year quarter.
Employee benefit expenses
Employee benefit expenses for the quarter were £91.2 million, an increase of £6.2 million, or 7.3%, over the prior year quarter, primarily due to investment in the first team playing squad.
Other operating expenses
Other operating expenses for the quarter were £31.8 million, a decrease of £13.5 million, or 29.8%, over the prior year quarter. This is primarily due to decreased matchday costs associated with playing 9 fewer games in the quarter, compared to the prior year quarter.
Depreciation and amortization
Depreciation for the quarter was £4.1 million, compared to £3.5 million in the prior year quarter. Amortization for the quarter was £46.3 million, an increase of £3.4 million, or 7.9%, over the prior year quarter, due to investment in the first team playing squad. The unamortized balance of registrations on 31 March 2024 was £448.0 million.
Exceptional items
Exceptional items for the quarter were a cost of £30.3 million. This comprises of costs incurred in relation to the sale of 27.7% of the Group’s voting rights to Trawlers Limited, an entity wholly owned by Sir Jim Ratcliffe. This follows approval of the deal by the Football Association and the Premier League in the quarter. Exceptional items in the prior year quarter were £nil.
3
Profit on disposal of intangible assets
Profit on disposal of intangible assets for the quarter was £0.8 million, compared to a profit of £1.9 million for the prior year quarter.
Net finance costs
Net finance costs for the quarter were £17.3 million, compared to £1.0 million in the prior year quarter. The movement was driven by an unfavourable swing in foreign exchange rates in the current quarter (loss on re-translation of £2.6 million), compared to a favourable swing in foreign exchange rates in the prior year quarter (gain on re-translation of £13.0 million).
Income tax
The income tax credit for the quarter was £12.1 million, compared to a credit of £0.1 million in the prior year quarter.
Cash flows
Overall cash and cash equivalents (including the effects of exchange rate movements) increased by £4.2 million in the quarter to 31 March 2024, compared to an increase of £42.7 million in the prior year quarter.
Net cash outflow from operating activities for the quarter was £15.1 million, compared to a net cash inflow in the prior year quarter of £54.1 million. This is primarily due to a reduction in broadcasting income as a result of 9 fewer home matches being played in the quarter, compared to the prior year quarter.
Net capital expenditure on property, plant and equipment for the quarter was £3.1 million, an increase of £0.3 million over the prior year quarter.
Net capital expenditure on intangible assets for the quarter was £15.8 million, an increase of £7.0 million over the prior year quarter.
Net cash inflow from financing activities for the quarter was £38.4 million, compared to a net cash outflow of £0.2 million in the prior year quarter. This is due to £158.5 million of proceeds from the issue of shares as part of the transaction agreement with Sir Jim Ratcliffe, partially offset by a £120.0 million repayment of our revolving facilities.
Balance sheet
Our USD non-current borrowings as of 31 March 2024 were $650 million, which was unchanged from 31 March 2023. As a result of the year-on-year change in the USD/GBP exchange rate from 1.2369 at 31 March 2023 to 1.2632 at 31 March 2024, our non-current borrowings when converted to GBP were £511.3 million, compared to £521.5 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 March 2024 were £143.0 million compared to £203.7 million at 31 March 2023.
4
As of 31 March 2024, cash and cash equivalents were £67.0 million compared to £73.7 million at the prior year quarter. This movement is detailed further in the Statement of Cash Flows on page 11 of this release.
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 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.
5
Non-IFRS Measures: Definitions and Use
| 1. | Adjusted EBITDA |
Adjusted EBITDA is defined as loss for the period before depreciation, amortization, exceptional items, 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 and exceptional items), 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 charges/credits related to exceptional items, foreign exchange gains/losses on unhedged US dollar denominated borrowings (including foreign exchange losses immediately reclassified from the hedging reserve following change in contract currency denomination of future revenues), and fair value movements on embedded foreign exchange derivatives and foreign currency options, adding/subtracting the actual tax expense/credit for the period, and subtracting/adding the adjusted tax expense/credit for the period (based on a normalized tax rate of 21%; 2023: 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% (2023: 21%) applicable during the financial year. A reconciliation of loss for the period to adjusted loss for the period is presented in supplemental note 3.
3. Adjusted basic and diluted loss per share
Adjusted basic and diluted loss per share are calculated by dividing the adjusted loss for the period by the weighted average number of ordinary shares in issue during the period. Adjusted diluted loss per share is calculated by adjusting the weighted average number of ordinary shares in issue during the period to assume conversion of all dilutive potential ordinary shares. There is one category of dilutive potential ordinary shares: share awards pursuant to the 2012 Equity Incentive Plan (the “Equity Plan”). Share awards pursuant to the Equity Plan are assumed to have been converted into ordinary shares at the beginning of the financial year. Adjusted basic and diluted loss per share are presented in supplemental note 3.
6
Key Performance Indicators
| Three months ended | Nine months ended | |||||||||||||||
| 31 March | 31 March | |||||||||||||||
| 2024 | 2023 | 2024 | 2023 | |||||||||||||
| Revenue | ||||||||||||||||
| Commercial % of total revenue | 50.9 | % | 40.8 | % | 44.6 | % | 49.0 | % | ||||||||
| Broadcasting % of total revenue | 27.4 | % | 29.8 | % | 35.3 | % | 30.0 | % | ||||||||
| Matchday % of total revenue | 21.7 | % | 29.4 | % | 20.1 | % | 21.0 | % | ||||||||
| 2023/24 Season | 2022/23 Season | 2023/24 Season | 2022/23 Season | |||||||||||||
| Home Matches Played | ||||||||||||||||
| PL | 4 | 6 | 14 | 13 | ||||||||||||
| UEFA competitions | - | 2 | 3 | 5 | ||||||||||||
| Domestic Cups | 1 | 6 | 3 | 8 | ||||||||||||
| Away Matches Played | ||||||||||||||||
| PL | 5 | 4 | 15 | 13 | ||||||||||||
| UEFA competitions | - | 2 | 3 | 5 | ||||||||||||
| Domestic Cups | 3 | 2 | 3 | 2 | ||||||||||||
| Other | ||||||||||||||||
| Employees at period end | 1,144 | 1,243 | 1,144 | 1,243 | ||||||||||||
| Employee benefit expenses % of revenue | 66.7 | % | 50.0 | % | 53.2 | % | 50.8 | % |
Contacts
|
|
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 |
7
CONSOLIDATED STATEMENT OF PROFIT OR LOSS
(unaudited; in £ thousands, except per share and shares outstanding data)
Three months ended 31 March | Nine months ended 31 March | |||||||||||||||
| 2024 | 2023 | 2024 | 2023 | |||||||||||||
| Revenue from contracts with customers | 136,693 | 170,048 | 519,545 | 481,070 | ||||||||||||
| Operating expenses | (203,732 | ) | (176,675 | ) | (587,155 | ) | (507,959 | ) | ||||||||
| Profit on disposal of intangible assets | 790 | 1,949 | 30,670 | 15,969 | ||||||||||||
| Operating loss | (66,249 | ) | (4,678 | ) | (36,940 | ) | (10,920 | ) | ||||||||
| Finance costs | (18,377 | ) | (14,657 | ) | (53,720 | ) | (30,777 | ) | ||||||||
| Finance income | 1,057 | 13,656 | 1,506 | 10,903 | ||||||||||||
| Net finance costs | (17,320 | ) | (1,001 | ) | (52,214 | ) | (19,874 | ) | ||||||||
| Loss before income tax | (83,569 | ) | (5,679 | ) | (89,154 | ) | (30,794 | ) | ||||||||
| Income tax credit | 12,069 | 132 | 12,271 | 5,037 | ||||||||||||
| Loss for the period | (71,500 | ) | (5,547 | ) | (76,883 | ) | (25,757 | ) | ||||||||
| Basic earnings per share: | ||||||||||||||||
| Basic loss per share (pence) | (43.12 | ) | (3.40 | ) | (46.87 | ) | (15.80 | ) | ||||||||
| Weighted average number of ordinary shares used as the denominator in calculating basic loss per share (thousands) | 165,823 | 163,062 | 164,040 | 163,062 | ||||||||||||
| Diluted earnings per share: | ||||||||||||||||
| Diluted loss per share (pence) (1) | (43.12 | ) | (3.40 | ) | (46.87 | ) | (15.80 | ) | ||||||||
| Weighted average number of ordinary shares and potential ordinary shares used as the denominator in calculating diluted loss per share (thousands) (1) | 165,823 | 163,062 | 164,040 | 163,062 | ||||||||||||
(1) For the three and nine months ended 31 March 2024 and the three months and nine months ended 31 March 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.
8
CONSOLIDATED BALANCE SHEET
(unaudited; in £ thousands)
| As of | ||||||||||||
31 March 2024 | 30 June 2023 | 31 March 2023 | ||||||||||
| ASSETS | ||||||||||||
| Non-current assets | ||||||||||||
| Property, plant and equipment | 254,908 | 253,282 | 242,730 | |||||||||
| Right-of-use assets | 7,913 | 8,760 | 2,952 | |||||||||
| Investment properties | 19,783 | 19,993 | 20,063 | |||||||||
| Intangible assets | 877,283 | 812,382 | 843,307 | |||||||||
| Deferred tax assets | 11,010 | - | - | |||||||||
| Trade receivables | 24,694 | 22,303 | 21,485 | |||||||||
| Derivative financial instruments | 667 | 7,492 | 15,102 | |||||||||
| 1,196,258 | 1,124,212 | 1,145,639 | ||||||||||
| Current assets | ||||||||||||
| Inventories | 3,757 | 3,165 | 2,645 | |||||||||
| Prepayments | 17,235 | 16,487 | 16,595 | |||||||||
| Contract assets – accrued revenue | 53,887 | 43,332 | 62,873 | |||||||||
| Trade receivables | 37,673 | 31,167 | 60,321 | |||||||||
| Other receivables | 1,835 | 9,928 | 2,031 | |||||||||
| Income tax receivable | - | 5,317 | 4,410 | |||||||||
| Derivative financial instruments | 1,539 | 8,317 | 5,894 | |||||||||
| Cash and cash equivalents | 66,994 | 76,019 | 73,733 | |||||||||
| 182,920 | 193,732 | 228,502 | ||||||||||
| Total assets | 1,379,178 | 1,317,944 | 1,374,141 | |||||||||
9
CONSOLIDATED BALANCE SHEET (continued)
(unaudited; in £ thousands)
| As of | ||||||||||||
31 March 2024 | 30 June 2023 | 31 March 2023 | ||||||||||
| EQUITY AND LIABILITIES | ||||||||||||
| Equity | ||||||||||||
| Share capital | 55 | 53 | 53 | |||||||||
| Share premium | 227,361 | 68,822 | 68,822 | |||||||||
| Treasury shares | (21,305 | ) | (21,305 | ) | (21,305 | ) | ||||||
| Merger reserve | 249,030 | 249,030 | 249,030 | |||||||||
| Hedging reserve | (308 | ) | 4,002 | 1,993 | ||||||||
| Accumulated losses | (271,628 | ) | (196,652 | ) | (194,085 | ) | ||||||
| 183,205 | 103,950 | 104,508 | ||||||||||
| Non-current liabilities | ||||||||||||
| Deferred tax liabilities | - | 3,304 | 1,939 | |||||||||
| Contract liabilities - deferred revenue | 6,834 | 6,659 | 3,842 | |||||||||
| Trade and other payables | 188,581 | 161,141 | 155,903 | |||||||||
| Borrowings | 511,296 | 507,335 | 521,482 | |||||||||
| Lease liabilities | 7,603 | 7,844 | 2,367 | |||||||||
| Derivative financial instruments | 3,648 | 748 | 1,303 | |||||||||
| Provisions | - | 93 | 91 | |||||||||
| 717,962 | 687,124 | 686,927 | ||||||||||
| Current liabilities | ||||||||||||
| Contract liabilities - deferred revenue | 102,643 | 169,624 | 130,081 | |||||||||
| Trade and other payables | 218,042 | 236,472 | 235,508 | |||||||||
| Income tax liabilities | 851 | - | - | |||||||||
| Borrowings | 142,960 | 105,961 | 203,665 | |||||||||
| Lease liabilities | 730 | 1,036 | 792 | |||||||||
| Derivative financial instruments | 1,830 | 931 | 48 | |||||||||
| Provisions | 10,955 | 12,846 | 12,612 | |||||||||
| 478,011 | 526,870 | 582,706 | ||||||||||
| Total equity and liabilities | 1,379,178 | 1,317,944 | 1,374,141 | |||||||||
10
CONSOLIDATED STATEMENT OF CASH FLOWS
(unaudited; in £ thousands)
Three months ended 31 March | Nine months ended 31 March | |||||||||||||||
2024 £’000 | 2023 £’000 | 2024 £’000 | 2023 £’000 | |||||||||||||
| Cash flows from operating activities | ||||||||||||||||
| Cash (used in)/generated from operations (see supplemental Note 4) | (2,584 | ) | 65,208 | (14,725 | ) | 12,194 | ||||||||||
| Interest paid | (13,082 | ) | (11,054 | ) | (31,838 | ) | (25,277 | ) | ||||||||
| Interest received | 281 | 130 | 853 | 207 | ||||||||||||
| Tax refunded/(paid) | 268 | (220 | ) | 5,524 | (612 | ) | ||||||||||
| Net cash (outflow)/inflow from operating activities | (15,117 | ) | 54,064 | (40,186 | ) | (13,488 | ) | |||||||||
| Cash flows from investing activities | ||||||||||||||||
| Payments for property, plant and equipment | (3,109 | ) | (2,717 | ) | (14,949 | ) | (9,816 | ) | ||||||||
| Payments for intangible assets | (18,453 | ) | (14,824 | ) | (186,395 | ) | (144,716 | ) | ||||||||
| Proceeds from sale of intangible assets | 2,684 | 6,098 | 36,266 | 19,831 | ||||||||||||
| Net cash outflow from investing activities | (18,878 | ) | (11,443 | ) | (165,078 | ) | (134,701 | ) | ||||||||
| Cash flows from financing activities | ||||||||||||||||
| Proceeds from issue of shares | 158,542 | - | 158,542 | - | ||||||||||||
| Proceeds from borrowings | - | - | 160,000 | 100,000 | ||||||||||||
| Repayment of borrowings | (120,000 | ) | - | (120,000 | ) | - | ||||||||||
| Principal elements of lease payments | (180 | ) | (153 | ) | (680 | ) | (1,602 | ) | ||||||||
| Net cash inflow/(outflow) from financing activities | 38,362 | (153 | ) | 197,862 | 98,398 | |||||||||||
| Effects of exchange rate movements on cash and cash equivalents | (182 | ) | 220 | (1,623 | ) | 2,301 | ||||||||||
| Net increase/(decrease) in cash and cash equivalents | 4,185 | 42,688 | (9,025 | ) | (47,490 | ) | ||||||||||
| Cash and cash equivalents at beginning of period | 62,809 | 31,045 | 76,019 | 121,223 | ||||||||||||
| Cash and cash equivalents at end of period | 66,994 | 73,733 | 66,994 | 73,733 | ||||||||||||
11
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 loss for the period to adjusted EBITDA |
Three months ended 31 March | Nine months ended 31 March | |||||||||||||||
2024 £’000 | 2023 £’000 | 2024 £’000 | 2023 £’000 | |||||||||||||
| Loss for the period | (71,500 | ) | (5,547 | ) | (76,883 | ) | (25,757 | ) | ||||||||
| Adjustments: | ||||||||||||||||
| Income tax credit | (12,069 | ) | (132 | ) | (12,271 | ) | (5,037 | ) | ||||||||
| Net finance costs | 17,320 | 1,001 | 52,214 | 19,874 | ||||||||||||
| Profit on disposal of intangible assets | (790 | ) | (1,949 | ) | (30,670 | ) | (15,969 | ) | ||||||||
| Exceptional items | 30,340 | - | 39,935 | - | ||||||||||||
| Amortization | 46,262 | 42,922 | 143,602 | 128,032 | ||||||||||||
| Depreciation | 4,144 | 3,467 | 12,399 | 10,554 | ||||||||||||
| Adjusted EBITDA | 13,707 | 39,762 | 128,326 | 111,697 | ||||||||||||
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| 3 | Reconciliation of loss for the period to adjusted loss for the period and adjusted basic and diluted loss per share |
Three months ended 31 March | Nine months ended 31 March | |||||||||||||||
2024 £’000 | 2023 £’000 | 2024 £’000 | 2023 £’000 | |||||||||||||
| Loss for the period | (71,500 | ) | (5,547 | ) | (76,883 | ) | (25,757 | ) | ||||||||
| Exceptional items | 30,340 | - | 39,935 | - | ||||||||||||
| Foreign exchange losses/(gains) on unhedged US dollar denominated borrowings | 2,641 | (12,997 | ) | 3,062 | (10,294 | ) | ||||||||||
| Fair value movement on embedded foreign exchange derivatives | (777 | ) | 3,390 | 8,332 | 498 | |||||||||||
| Income tax credit | (12,069 | ) | (132 | ) | (12,271 | ) | (5,037 | ) | ||||||||
| Adjusted loss before income tax | (51,365 | ) | (15,286 | ) | (37,825 | ) | (40,590 | ) | ||||||||
| Adjusted income tax credit (using a normalized tax rate of 21% (2023: 21%)) | 10,787 | 3,210 | 7,943 | 8,524 | ||||||||||||
| Adjusted loss for the period (i.e. adjusted net loss) | (40,578 | ) | (12,076 | ) | (29,882 | ) | (32,066 | ) | ||||||||
| Adjusted basic loss per share: | ||||||||||||||||
| Adjusted loss per share (pence) | (24.47 | ) | (7.41 | ) | (18.22 | ) | (19.66 | ) | ||||||||
| Weighted average number of ordinary shares used as the denominator in calculating adjusted basic loss per share (thousands) | 165,823 | 163,062 | 164,040 | 163,062 | ||||||||||||
| Adjusted diluted loss per share: | ||||||||||||||||
Adjusted diluted loss per share (pence) (1) | (24.47 | ) | (7.41 | ) | (18.22 | ) | (19.66 | ) | ||||||||
| Weighted average number of ordinary shares and potential ordinary shares used as the denominator in calculating adjusted diluted loss per share (thousands) (1) | 165,823 | 163,062 | 164,040 | 163,062 | ||||||||||||
(1) For the three and nine months ended 31 March 2024 and the three and nine months ended 31 March 2023, potential ordinary shares are anti-dilutive, as their inclusion in the adjusted diluted loss per share calculation would reduce the loss per share, and hence have been excluded.
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| 4 | Cash generated from operations |
Three months ended 31 March | Nine months ended 31 March | |||||||||||||||
2024 £’000 | 2023 £’000 | 2024 £’000 | 2023 £’000 | |||||||||||||
| Loss for the period | (71,500 | ) | (5,547 | ) | (76,883 | ) | (25,757 | ) | ||||||||
| Income tax credit | (12,069 | ) | (132 | ) | (12,271 | ) | (5,037 | ) | ||||||||
| Loss before income tax | (83,569 | ) | (5,679 | ) | (89,154 | ) | (30,794 | ) | ||||||||
| Adjustments for: | ||||||||||||||||
| Depreciation | 4,144 | 3,467 | 12,399 | 10,554 | ||||||||||||
| Amortization | 46,262 | 42,922 | 143,602 | 128,032 | ||||||||||||
| Profit on disposal of intangible assets | (790 | ) | (1,949 | ) | (30,670 | ) | (15,969 | ) | ||||||||
| Net finance costs | 17,320 | 1,001 | 52,214 | 19,874 | ||||||||||||
| Non-cash employee benefit expense – equity-settled share-based payments | 431 | 559 | 1,907 | 1,714 | ||||||||||||
| Foreign exchange losses on operating activities | 411 | 980 | 888 | 4,947 | ||||||||||||
| Reclassified from hedging reserve | 2 | 284 | - | (246 | ) | |||||||||||
| Changes in working capital: | ||||||||||||||||
| Inventories | 267 | 627 | (592 | ) | (445 | ) | ||||||||||
| Prepayments | 9,522 | 9,304 | (1,311 | ) | (1,624 | ) | ||||||||||
| Contract assets – accrued revenue | 7,932 | (9,368 | ) | (10,555 | ) | (26,634 | ) | |||||||||
| Trade receivables | 41,849 | 51,766 | (2,506 | ) | 3,679 | |||||||||||
| Other receivables | 230 | 395 | 8,093 | (462 | ) | |||||||||||
| Contract liabilities – deferred revenue | (48,225 | ) | (33,905 | ) | (66,806 | ) | (48,621 | ) | ||||||||
| Trade and other payables | 1,980 | 5,104 | (29,859 | ) | (31,870 | ) | ||||||||||
| Provisions | (350 | ) | (300 | ) | (2,375 | ) | 59 | |||||||||
| Cash (used in)/generated from operations | (2,584 | ) | 65,208 | (14,725 | ) | 12,194 | ||||||||||
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