EX-99.1 2 a14-24630_1ex99d1.htm EX-99.1

Exhibit 99.1

 

 

·                       TOTAL REVENUES OF £88.7 MILLION

·                       EBITDA OF £20.3 MILLION

·                       PROFIT OF £8.9 MILLION

 

MANCHESTER, England. — 18 November 2014 — Manchester United (NYSE: MANU; the “Company” and the “Group”) — one of the most popular and successful sports teams in the world - today announced financial results for the 2015 fiscal first quarter ended 30 September 2014.

 

Highlights

 

·                  During the first quarter we signed the largest kit manufacturer sponsorship deal in sports with adidas - £750m over 10 years with retail, e-commerce and licensing reverting to Manchester United from 01 August 2015.

 

·                  Five additional sponsorship deals announced in the quarter —  Nissin and Abengoa (global), Association of Football Federations of Azerbaijan - AFFA (regional), Maybank and Gloops (renewals of regional).

 

·                  Signed a number of leading players including Blind, Di Maria, Rojo, and Falcao on loan after signing Herrera and Shaw earlier in the window.

 

·                  Played five tour matches across the US to a cumulative stadium audience of more than 360,000

·                  Record US attendance of 109,318 at ‘The Big House’ in Michigan.

 

Commentary

 

Ed Woodward, Executive Vice Chairman, commented, “While we recognize that the 2014/15 fiscal year financial results will reflect our absence from the Champions League, we signed the largest kit sponsorship deal in the history of sport in the first quarter and, with that concluded, we are excited to focus our efforts on the meaningful growth opportunities in sponsorship, digital media and retail and merchandising.”

 

Outlook

 

For fiscal 2015, Manchester United continues to expect:

·                  Revenue to be £385m to £395m.

·                  Adjusted EBITDA to be £90m to £95m.

 



 

Key Financials (unaudited)

 

 

 

Three months ended
30 September

 

 

 

£ million (except adjusted diluted earnings per share)

 

2014

 

2013

 

Change

 

Commercial revenue

 

56.8

 

59.9

 

(5.2

)%

Broadcasting revenue

 

16.8

 

19.3

 

(13.0

)%

Matchday revenue

 

15.1

 

19.3

 

(21.8

)%

Total revenue

 

88.7

 

98.5

 

(9.9

)%

Adjusted EBITDA*

 

20.3

 

22.2

 

(8.6

)%

 

 

 

 

 

 

 

 

Profit/(loss) for the period (i.e. net income)

 

8.9

 

(0.3

)

N/A

 

Adjusted profit for the period (i.e. adjusted net income)*

 

4.2

 

2.2

 

90.9

%

Adjusted diluted earnings per share (pence)*

 

2.59

 

1.37

 

89.1

%

 

 

 

 

 

 

 

 

Gross debt

 

362.2

 

361.0

 

0.3

%

Cash and cash equivalents

 

90.3

 

83.6

 

8.0

%

 


* Adjusted EBITDA, adjusted profit for the period and adjusted diluted earnings per share are non-IFRS measures. See “Non-IFRS Measures: Definitions and Use” below 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.

 

Revenue Analysis

 

Commercial

 

Commercial revenue for the quarter was £56.8 million, a decrease of £3.1 million, or 5.2%, over the prior year quarter.

·                  Sponsorship revenue for the quarter was £46.3 million, an increase of £1.1 million, or 2.4%, over the prior year quarter primarily due to an increase in shirt and other sponsorships, partially offset by reduced tour revenue.

·                  Retail, Merchandising, Apparel & Product Licensing revenue for the quarter was £7.8 million, a decrease of £2.9 million, or 27.1%, over the prior year quarter, primarily due to reduced Nike guaranteed revenue due to non-participation in the UEFA Champions League in the current season.

·                  Mobile & Content revenue for the quarter was £2.7 million, a decrease of £1.3 million over the prior year quarter, due to the expiration of a few of our mobile partnerships.

 

Broadcasting

 

Broadcasting revenue for the quarter was £16.8 million, a decrease of £2.5 million, or 13.0%, over the prior year quarter, primarily due to non-participation in the UEFA Champions League in the current season.

 

Matchday

 

Matchday revenue for the quarter was £15.1 million, a decrease of £4.2 million, or 21.8%, over the prior year quarter, primarily as a result of non-participation in the UEFA Champions League and one fewer domestic cup home game.

 



 

Other Financial Information

 

Operating expenses

 

Total operating expenses for the quarter were £92.8 million, an increase of £2.6 million, or 2.9%, over the prior year quarter.

 

Employee benefit expenses

 

Employee benefit expenses for the quarter were £49.4 million, a decrease of £3.5 million, or 6.6%, over the prior year quarter due primarily to lower player wages.

 

Other operating expenses

 

Other operating expenses for the quarter were £19.0 million, a decrease of £4.4 million, or 18.8%, over the prior year quarter due to a reduction in domestic cup gate-share costs, as a result of playing one less home cup game, and favourable movements in foreign exchange.

 

Depreciation & amortization

 

Depreciation for the quarter was £2.3 million, an increase of £0.3 million, or 15.0%, over the prior year quarter. Amortization for the quarter was £21.2 million, an increase of £9.3 million, or 78.2%, over the prior year quarter. The unamortized balance of players’ registrations at 30 September 2014 was £291.7 million.

 

Profit on disposal of players’ registrations

 

Profit on disposal of players’ registrations for the quarter was £18.3 million compared to £1.0 million in the prior year quarter.

 

Net finance costs

 

Net finance costs for the quarter were £6.1 million, a decrease of £3.7 million, or 37.8%, over the prior year quarter. The decrease was primarily due to a £3.0 million foreign exchange loss on retranslation of US dollar bank accounts in the prior year quarter.

 

We started hedging the foreign exchange risk on a portion of contracted future US dollar revenues using our US dollar borrowings, net of a portion of our US dollar cash as the hedging instrument from the prior second quarter. As a result, foreign exchange gains or losses arising on re-translation of our US dollar borrowings and a portion of our US dollar cash balances are now initially recognized in other comprehensive income, rather than being recognized in the income statement immediately.

 

Tax

 

The tax credit for the quarter was £0.8 million, compared to a credit of £0.2 million in the prior year quarter.

 

Cash flows

 

Net cash generated from operating activities for the quarter was £72.9 million, an increase of £49.7 million over the prior year quarter, primarily due to favourable movements in working capital.

 

Capital expenditure on property, plant and equipment for the quarter was £1.9 million, a decrease of £2.2 million over the prior year quarter.

 

Net player capital expenditure for the quarter was £55.9 million, an increase of £29.1 million over the prior year quarter.

 



 

Net cash generated from financing activities for the quarter was £4.6 million, compared to net cash used of £0.1 million in the prior year quarter.

 

Conference Call Information

 

The Company’s conference call to review first quarter fiscal 2015 results will be broadcast live over the internet today, 18 November 2014 at 8:00 a.m. Eastern Time and will be available on Manchester United’s investor relations website at http://ir.manutd.com. Thereafter, a replay of the webcast will be available for thirty days.

 

About Manchester United

 

Manchester United is one of the most popular and successful sports team in the world, playing one of the most popular spectator sports on Earth.

 

Through our 136-year heritage we have won 62 trophies, enabling us to develop the world’s leading sports brand and a global community of 659 million followers. Our large, passionate community provides Manchester United with a worldwide platform to generate significant revenue from multiple sources, including sponsorship, merchandising, product licensing, mobile & content, broadcasting and matchday.

 

Cautionary Statement

 

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 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).

 

Non-IFRS Measures: Definitions and Use

 

1.                  Adjusted EBITDA

 

Adjusted EBITDA is defined as profit for the period before depreciation, amortization, profit on disposal of players’ registrations, exceptional items, net finance costs, and tax.

 

We believe 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), 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 profit for the period to adjusted EBITDA is presented in supplemental note 2.

 



 

2.                   Adjusted profit for the period (i.e. adjusted net income)

 

Adjusted profit for the period is calculated, where appropriate, by adjusting for charges/credits related to exceptional items, foreign exchange gains/losses on US dollar denominated bank accounts, fair value movements on derivative financial instruments, and hedge ineffectiveness on cash flow hedges, adding/subtracting the actual tax expense/credit for the period, and subtracting the adjusted tax expense for the period (based on an normalized tax rate of 35%; 2013: 35%). The normalized tax rate of 35% is management’s estimate of the tax rate likely to be applicable to the Group in the long-term.

 

We believe that 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 charges/credits related to ‘one-off’ transactions and then to apply a ‘normalized’ tax rate (for both the current and prior periods) of the US federal income tax rate of 35%. A reconciliation of profit for the period to adjusted profit for the period is presented in supplemental note 3.

 

3.                   Adjusted basic and diluted earnings per share

 

Adjusted basic and diluted earnings per share is calculated by dividing the adjusted profit for the period by the weighted average number of ordinary shares in issue during the period. Adjusted diluted earnings 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. We have 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 earnings per share are presented in supplemental note 3.

 



 

Key Performance Indicators

 

 

 

Three months ended

 

 

 

30 September

 

 

 

2014

 

2013

 

Commercial % of total revenue

 

64.0

%

60.8

%

Broadcasting % of total revenue

 

19.0

%

19.6

%

Matchday % of total revenue

 

17.0

%

19.6

%

Home Matches Played

 

 

 

 

 

FAPL

 

3

 

3

 

UEFA competitions

 

 

1

 

Domestic Cups

 

 

1

 

Away Matches Played

 

 

 

 

 

UEFA competitions

 

 

 

Domestic Cups

 

1

 

 

 

 

 

 

 

 

Other

 

 

 

 

 

Employees at period end

 

837

 

810

 

Staff costs % of revenue

 

55.7

%

53.7

%

 

Phasing of Premier League home
games

 

Quarter 1

 

Quarter 2

 

Quarter 3

 

Quarter 4

 

Total

 

2014/15 season*

 

3

 

7

 

5

 

4

 

19

 

2013/14 season

 

3

 

6

 

7

 

3

 

19

 

2012/13 season

 

3

 

7

 

5

 

4

 

19

 

 


*Subject to changes in broadcasting scheduling

 

Contacts

 

Investor Relations:
Samanta Stewart
+44 207 054 5928
ir@manutd.co.uk

Media: Philip Townsend
Manchester United plc
+44 161 868 8148
philip.townsend@manutd.co.uk

 

 

 

Jim Barron / Michael Henson
Sard Verbinnen & Co + 1 212 687 8080

 



 

CONSOLIDATED INCOME STATEMENT

(unaudited; in £ thousands, except per share and shares outstanding data)

 

 

 

Three months ended
 30 September

 

 

 

2014

 

2013

 

Revenue

 

88,670

 

98,521

 

Operating expenses

 

(92,751

)

(90,208

)

Profit on disposal of players’ registrations

 

18,328

 

996

 

Operating profit

 

14,247

 

9,309

 

Finance costs

 

(6,238

)

(9,838

)

Finance income

 

101

 

59

 

Net finance costs

 

(6,137

)

(9,779

)

Profit/(loss) before tax

 

8,110

 

(470

)

Tax credit

 

834

 

177

 

Profit/(loss) for the period

 

8,944

 

(293

)

 

 

 

 

 

 

Basic earnings/(loss) per share:

 

 

 

 

 

Basic earnings/(loss) per share (pence)

 

5.46

 

(0.18

)

Weighted average number of ordinary shares outstanding (thousands)

 

163,788

 

163,819

 

Diluted earnings/(loss) per share:

 

 

 

 

 

Diluted earnings/(loss) per share (pence)

 

5.45

 

(0.18

)

Weighted average number of ordinary shares outstanding (thousands)

 

164,127

 

163,819

 

 



 

CONSOLIDATED BALANCE SHEET

(unaudited; in £ thousands)

 

 

 

As of
30 September
2014

 

As of
30 June
2014

 

As of
30 September
2013

 

ASSETS

 

 

 

 

 

 

 

Non-current assets

 

 

 

 

 

 

 

Property, plant and equipment

 

254,338

 

254,859

 

256,244

 

Investment property

 

13,643

 

13,671

 

14,051

 

Goodwill

 

421,453

 

421,453

 

421,453

 

Players’ registrations and other intangible assets

 

292,496

 

204,572

 

144,680

 

Derivative financial instruments

 

1,155

 

 

 

Trade and other receivables

 

 

41

 

241

 

Deferred tax asset

 

133,038

 

129,631

 

139,434

 

 

 

1,116,123

 

1,024,227

 

976,103

 

Current assets

 

 

 

 

 

 

 

Derivative financial instruments

 

74

 

 

882

 

Trade and other receivables

 

71,571

 

125,119

 

64,292

 

Cash and cash equivalents

 

90,266

 

66,365

 

83,602

 

 

 

161,911

 

191,484

 

148,776

 

Total assets

 

1,278,034

 

1,215,711

 

1,124,879

 

 



 

CONSOLIDATED BALANCE SHEET (continued)

(unaudited; in £ thousands)

 

 

 

As of
30 September
2014

 

As of
30 June
2014

 

As of
30 September
2013

 

EQUITY AND LIABILITIES

 

 

 

 

 

 

 

Equity

 

 

 

 

 

 

 

Share capital

 

52

 

52

 

52

 

Share premium

 

68,822

 

68,822

 

68,822

 

Merger reserve

 

249,030

 

249,030

 

249,030

 

Hedging reserve

 

15,509

 

25,918

 

16,342

 

Retained earnings

 

164,102

 

154,828

 

129,949

 

 

 

497,515

 

498,650

 

464,195

 

Non-current liabilities

 

 

 

 

 

 

 

Derivative financial instruments

 

1,498

 

1,602

 

1,649

 

Trade and other payables

 

47,137

 

42,464

 

18,014

 

Borrowings

 

359,445

 

326,803

 

353,476

 

Deferred revenue

 

15,291

 

15,631

 

18,023

 

Provisions

 

 

 

845

 

Deferred tax liabilities

 

26,022

 

28,837

 

14,913

 

 

 

449,393

 

415,337

 

406,920

 

Current liabilities

 

 

 

 

 

 

 

Derivative financial instruments

 

650

 

875

 

571

 

Current tax liabilities

 

1,976

 

2,999

 

5,472

 

Trade and other payables

 

140,250

 

102,232

 

72,929

 

Borrowings

 

2,731

 

15,005

 

7,571

 

Deferred revenue

 

185,519

 

180,613

 

166,757

 

Provisions

 

 

 

464

 

 

 

331,126

 

301,724

 

253,764

 

Total equity and liabilities

 

1,278,034

 

1,215,711

 

1,124,879

 

 



 

CONSOLIDATED STATEMENT OF CASH FLOWS

(unaudited; in £ thousands)

 

 

 

Three months ended
30 September

 

 

 

2014

 

2013

 

Cash flows from operating activities

 

 

 

 

 

Cash generated from operations (see supplemental note 4)

 

83,342

 

32,770

 

Interest paid

 

(8,729

)

(9,146

)

Debt finance costs paid relating to borrowings

 

(866

)

(19

)

Interest received

 

49

 

59

 

Income tax paid

 

(887

)

(487

)

Net cash generated from operating activities

 

72,909

 

23,177

 

Cash flows from investing activities

 

 

 

 

 

Purchases of property, plant and equipment

 

(1,942

)

(4,093

)

Purchases of players’ registrations

 

(71,302

)

(33,450

)

Proceeds from sale of players’ registrations

 

15,443

 

6,655

 

Net cash used in investing activities

 

(57,801

)

(30,888

)

Cash flows from financing activities

 

 

 

 

 

Proceeds from borrowings

 

4,704

 

 

Repayment of borrowings

 

(97

)

(91

)

Net cash generated from/(used in) financing activities

 

4,607

 

(91

)

Net increase/(decrease) in cash and cash equivalents

 

19,715

 

(7,802

)

Cash and cash equivalents at beginning of period

 

66,365

 

94,433

 

Foreign exchange gains/(losses) on cash and cash equivalents

 

4,186

 

(3,029

)

Cash and cash equivalents at end of period

 

90,266

 

83,602

 

 



 

SUPPLEMENTAL NOTES

 

1                                         General information

 

Manchester United plc (the “Company”) and its subsidiaries (together the “Group”) is a professional football club together with related and ancillary activities. The Company incorporated under the Companies Law (2011 Revision) of the Cayman Islands, as amended and restated from time to time.

 

2                               Reconciliation of profit/(loss) for the period to adjusted EBITDA

 

 

 

Three months ended
30 September

 

 

 

2014
£’000

 

2013
£’000

 

Profit/(loss) for the period

 

8,944

 

(293

)

Adjustments:

 

 

 

 

 

Tax credit

 

(834

)

(177

)

Net finance costs

 

6,137

 

9,779

 

Profit on disposal of players’ registrations

 

(18,328

)

(996

)

Exceptional items

 

876

 

 

Amortization

 

21,177

 

11,904

 

Depreciation

 

2,336

 

1,983

 

Adjusted EBITDA

 

20,308

 

22,200

 

 



 

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

 

 

 

Three months ended
30 September

 

 

 

2014
£’000

 

2013
£’000

 

Profit/(loss) for the period

 

8,944

 

(293

)

Exceptional items

 

876

 

 

Foreign exchange (gains)/losses on US dollar denominated bank accounts

 

(695

)

3,029

 

Fair value movement on derivative financial instruments recognized in net finance costs

 

(1,324

)

884

 

Hedge ineffectiveness of cash flow hedges

 

(435

)

 

Tax credit

 

(834

)

(177

)

Adjusted profit before tax

 

6,532

 

3,443

 

Adjusted tax expense (using a normalised US statutory rate of 35%)

 

(2,286

)

(1,205

)

Adjusted profit for the period (i.e. adjusted net income)

 

4,246

 

2,238

 

 

 

 

 

 

 

Adjusted basic earnings per share:

 

 

 

 

 

Adjusted basic earnings per share (pence)

 

2.59

 

1.37

 

Weighted average number of ordinary shares outstanding (thousands)

 

163,788

 

163,819

 

Adjusted diluted earnings per share:

 

 

 

 

 

Adjusted diluted earnings per share (pence)

 

2.59

 

1.37

 

Weighted average number of ordinary shares outstanding (thousands)

 

164,127

 

163,819

 

 



 

4                               Cash generated from operations

 

 

 

Three months ended
30 September

 

 

 

2014
£’000

 

2013
£’000

 

Profit/(loss) for the period

 

8,944

 

(293

)

Tax credit

 

(834

)

(177

)

Profit/(loss) on ordinary activities before tax

 

8,110

 

(470

)

Depreciation

 

2,336

 

1,983

 

Amortization

 

21,177

 

11,904

 

Profit on disposal of players’ registrations

 

(18,328

)

(996

)

Net finance costs

 

6,137

 

9,779

 

Loss on disposal of property, plant and equipment

 

4

 

 

Equity-settled share-based payments

 

330

 

383

 

Foreign exchange gains on operating activities

 

(639

)

 

Other fair value losses/(gains) on derivative financial instruments

 

634

 

(160

)

Reclassified from hedging reserve

 

(1,195

)

(188

)

Decrease in trade and other receivables

 

64,508

 

10

 

Increase in trade and other payables and deferred revenue

 

268

 

10,685

 

Decrease in provisions

 

 

(160

)

Cash generated from operations

 

83,342

 

32,770