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Share Name | Share Symbol | Market | Type |
---|---|---|---|
Manchester United Plc | NYSE:MANU | NYSE | Common Stock |
Price Change | % Change | Share Price | High Price | Low Price | Open Price | Shares Traded | Last Trade | |
---|---|---|---|---|---|---|---|---|
0.11 | 0.68% | 16.23 | 16.33 | 16.05 | 16.15 | 188,789 | 01:00:00 |
TOTAL REVENUES OF £95.0 MILLION
ADJUSTED EBITDA OF £25.4 MILLION
RAISED EBITDA GUIDANCE TO £103 TO £110 MILLION FROM £90 TO £95 MILLION
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 third quarter and nine months ended 31 March 2015.
Highlights
Commentary
Ed Woodward, Executive Vice Chairman commented, “Our commercial revenues were up year over year and we are raising EBITDA guidance for fiscal year 2015 from £90-£95 million to £103-£110 million.
As the season approaches its conclusion, we are pleased with the team’s performance in Louis van Gaal’s first season as manager and are well positioned to achieve a top four finish in the Premier League and to return to European football next year. As we look forward to next season, on the playing side we expect to be challenging for trophies in all competitions and on the commercial side we are excited by the numerous opportunities for further growth, including the first year of our ten year partnership with adidas. ”
Outlook
For fiscal 2015, Manchester United expect:
31 March
Nine months ended31 March
2015 2014 Change 2015 2014 Change Commercial revenue 47.8 42.8 11.7% 151.0 145.0 4.1% Broadcasting revenue 21.7 35.6 (39.0%) 66.9 101.8 (34.3%) Matchday revenue 25.5 37.1 (31.3%) 71.5 90.1 (20.6%) Total revenue 95.0 115.5 (17.7%) 289.4 336.9 (14.1%) Adjusted EBITDA* 25.4 40.0 (36.5%) 88.1 113.2 (22.2%) (Loss)/profit for the period (i.e. net income) (2.9) 11.0 - 6.0 29.7 (79.8%) Adjusted (loss)/profit for the period (i.e. adjusted net income)* (7.1) 13.0 - 1.5 35.0 (95.7%) Adjusted diluted (loss)/earnings per share (pence)* (4.34) 7.93 - 0.91 21.49 (95.8%) Gross debt** 395.4 351.7 12.4% 395.4 351.7 12.4% Cash and cash equivalents 11.2 34.3 (67.3%) 11.2 34.3 (67.3%)* Adjusted EBITDA, adjusted (loss)/profit for the period and adjusted diluted (loss)/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.
** Gross debt increased primarily because of movements in USD/GBP exchange rate from 1.6662 at 31 March 2014 to 1.4861 at 31 March 2015.
Revenue Analysis
Commercial
Commercial revenue for the third quarter was £47.8 million, an increase of £5.0 million, or 11.7%, over the prior year quarter.
Broadcasting
Broadcasting revenue for the third quarter was £21.7 million, a decrease of £13.9 million, or 39.0%, over the prior year quarter, primarily due to five fewer FAPL live broadcast games and two fewer FAPL home games in the current quarter, and non-participation in the UEFA Champions League.
Matchday
Matchday revenue for the third quarter was £25.5 million, a decrease of £11.6 million, or 31.3%, over the prior year quarter, primarily due to two fewer FAPL home games in the current quarter and non-participation in the UEFA Champions League.
Other Financial Information
Operating expenses
Total operating expenses for the third quarter were £99.0 million, an increase of £7.5 million, or 8.2%, over the prior year quarter.
Staff costs
Staff costs for the third quarter were £50.2 million, a decrease of £3.2 million, or 6.0%, over the prior year quarter.
Other operating expenses
Other operating expenses for the third quarter were £19.4 million, a decrease of £2.7 million, or 12.2%, over the prior year quarter, primarily due to non-participation in the UEFA Champions League.
Depreciation & amortization
Depreciation for the third quarter was £2.5 million, an increase of £0.3 million, or 13.6%, over the prior year quarter. Amortization for the third quarter was £25.7 million, an increase of £11.9 million, or 86.2%, over the prior year quarter. The unamortized balance of players’ registrations at 31 March 2015 was £237.0 million.
Exceptional items
Exceptional items for the third quarter were £1.2 million being the present value of the additional contributions the Club is expected to pay to remedy the revised deficit of the Football League pension scheme as per the latest triennial actuarial valuation at 31 August 2014. Exceptional items for the prior year quarter were £nil.
Net finance costs
Net finance costs for the third quarter were £5.8 million, a decrease of £0.1 million, or 1.7%, over the prior year quarter.
Tax
The tax credit for the third quarter was £8.5 million, compared to an expense of £9.5 million in the prior year quarter.
Cash flows
Net cash used in operating activities for the third quarter was £15.0 million, an increase of £2.4 million over the prior year quarter.
Capital expenditure on property, plant and equipment for the third quarter was £0.3 million, a decrease of £1.4 million over the prior year quarter.
Net player and other intangible assets capital expenditure for the third quarter was £11.0 million, a decrease of £12.3 million over the prior year quarter.
Conference Call Information
The Company’s conference call to review third quarter fiscal 2015 results will be broadcast live over the internet today, 14 May 2015 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 137-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, new media & mobile, 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 (loss)/profit for the period (i.e. adjusted net income)
Adjusted (loss)/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/adding the adjusted tax expense/credit for the period (based on an normalized tax rate of 35%; 2014: 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 (loss)/profit for the period to adjusted (loss)/profit for the period is presented in supplemental note 3.
3. Adjusted basic and diluted (loss)/earnings per share
Adjusted basic and diluted (loss)/earnings per share are calculated by dividing the adjusted (loss)/profit for the period by the weighted average number of ordinary shares in issue during the period. Adjusted diluted (loss)/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 (loss)/earnings per share are presented in supplemental note 3.
Key Performance Indicators Three months ended Nine months ended 31 March 31 March 2015 2014 2015 2014 Commercial % of total revenue 50.3% 37.1% 52.2% 43.0% Broadcasting % of total revenue 22.8% 30.8% 23.1% 30.2% Matchday % of total revenue 26.9% 32.1% 24.7% 26.8% Home Matches Played FAPL 5 7 15 16 UEFA competitions - 1 - 4 Domestic Cups 2 2 2 4 Away Matches Played UEFA competitions - 1 - 4 Domestic Cups 3 1 4 2 Other Employees at period end 791 875 791 875 Staff costs % of revenue 52.8% 46.2% 51.2% 46.9% 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 19CONSOLIDATED INCOME STATEMENT
(unaudited; in £ thousands, except per share and shares outstanding data)
Three months ended31 March
Nine months ended31 March
2015 2014 2015 2014 Revenue 94,970 115,495 289,401 336,943 Operating expenses (98,976) (91,499) (284,864) (269,422) (Loss)/profit on disposal of players’ registrations (1,556) 2,361 18,204 4,203 Operating (loss)/profit (5,562) 26,357 22,741 71,724 Finance costs (5,904) (5,959) (18,381) (21,562) Finance income 37 36 136 143 Net finance costs (5,867) (5,923) (18,245) (21,419) (Loss)/profit before tax (11,429) 20,434 4,496 50,305 Tax credit/(expense) 8,555 (9,520) 1,519 (20,644) (Loss)/profit for the period (2,874) 10,914 6,015 29,661 Basic (loss)/earnings per share: Basic (loss)/earnings per share (pence) (1.75) 6.66 3.67 18.11 Weighted average number of ordinary shares outstanding (thousands) 163,797 163,812 163,794 163,815 Diluted (loss)/earnings per share: Diluted (loss)/earnings per share (pence) (1.75) 6.66 3.66 18.11 Weighted average number of ordinary shares outstanding (thousands) 164,140 163,812 164,140 163,815
CONSOLIDATED BALANCE SHEET
(unaudited; in £ thousands)
As of31 March
2015
As of30 June
2014
As of31 March
2014
ASSETS Non-current assets Property, plant and equipment 252,494 254,859 255,332 Investment property 13,587 13,671 13,700 Goodwill 421,453 421,453 421,453 Players’ registrations and other intangible assets 237,760 204,572 161,769 Derivative financial instruments 1,323 - 791 Trade and other receivables 1,000 41 141 Deferred tax asset 147,284 129,631 128,368 1,074,901 1,024,227 981,554 Current assets Derivative financial instruments 1,354 - 317 Trade and other receivables 107,716 125,119 77,014 Current tax receivable 124 - - Cash and cash equivalents 11,204 66,365 34,344 120,398 191,484 111,675 Total assets 1,195,299 1,215,711 1,093,229CONSOLIDATED BALANCE SHEET (continued)
(unaudited; in £ thousands)
As of31 March
2015
As of30 June
2014
As of31 March
2014
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 (6,566) 25,918 21,156 Retained earnings 161,872 154,828 160,431 473,210 498,650 499,491 Non-current liabilities Derivative financial instruments 4,087 1,602 1,919 Trade and other payables 39,827 42,464 27,941 Borrowings 392,480 326,803 339,679 Deferred revenue 24,464 15,631 14,440 Deferred tax liabilities 26,569 28,837 29,140 487,427 415,337 413,119 Current liabilities Derivative financial instruments 2,340 875 1,072 Current tax liabilities 1,753 2,999 3,147 Trade and other payables 118,135 102,232 76,468 Borrowings 2,950 15,005 11,991 Deferred revenue 109,484 180,613 87,941 234,662 301,724 180,619 Total equity and liabilities 1,195,299 1,215,711 1,093,229CONSOLIDATED STATEMENT OF CASH FLOWS
(unaudited; in £ thousands)
Three months ended
31 March
Nine months ended31 March
2015 2014 2015 2014 Cash flows from operating activities Cash (used in)/generated from operations (see supplemental note 4) (3,189) (3,970) 45,732 30,693 Interest paid (10,907) (8,830) (24,136) (22,794) Debt finance costs relating to borrowings - - (824) (123) Interest received 368 36 457 143 Tax (paid)/refund (1,271) 175 (2,281) (1,071) Net cash (used in)/generated from operating activities (14,999) (12,589) 18,948 6,848 Cash flows from investing activities Purchases of property, plant and equipment (293) (1,679) (4,086) (8,557) Proceeds from sale of property, plant and equipment - - - 50 Purchases of players’ registrations and other intangible assets (14,406) (24,815) (101,272) (62,102) Proceeds from sale of players’ registrations 3,447 1,500 20,163 8,556 Net cash used in investing activities (11,252) (24,994) (85,195) (62,053) Cash flows from financing activities Proceeds from borrowings - - 4,704 - Repayment of borrowings (102) (97) (301) (284) Net cash (used in)/generated from financing activities (102) (97) 4,403 (284) Net decrease in cash and cash equivalents (26,353) (37,680) (61,844) (55,489) Cash and cash equivalents at beginning of period 37,115 72,144 66,365 94,433 Foreign exchange gains/(losses) on cash and cash equivalents 442 (120) 6,683 (4,600) Cash and cash equivalents at end of period 11,204 34,344 11,204 34,344SUPPLEMENTAL 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 for the period to adjusted EBITDA
Three months ended31 March
Nine months ended31 March
2015£’000
2014£’000
2015£’000
2014£’000
(Loss)/profit for the period (2,874) 10,914 6,015 29,661 Adjustments: Tax (credit)/expense (8,555) 9,520 (1,519) 20,644 Net finance costs 5,867 5,923 18,245 21,419 Loss/(profit) on disposal of players’ registrations 1,556 (2,361) (18,204) (4,203) Exceptional items 1,275 - 2,336 293 Amortization 25,708 13,841 73,931 39,163 Depreciation 2,469 2,206 7,365 6,274 Adjusted EBITDA 25,446 40,043 88,169 113,2513 Reconciliation of (loss)/profit for the period to adjusted (loss)/profit for the period and adjusted basic and diluted (loss)/earnings per share
Three months ended31 March
Nine months ended31 March
2015
£’000
2014£’000
2015£’000
2014£’000
(Loss)/profit for the period (2,874) 10,914 6,015 29,661 Exceptional items 1,275 - 2,336 293 Foreign exchange losses/(gains) on US dollar denominated bank accounts 468 - (530) 2,712 Fair value movement on derivative financial instruments (1,511) 90 (3,997) 1,640 Ineffectiveness of cash flow hedges 234 (543) - (791) Tax (credit)/expense (8,555) 9,520 (1,519) 20,644 Adjusted (loss)/profit before tax (10,963) 19,981 2,305 54,159Adjusted tax credit/(expense) (using a normalised tax rate of 35% (2014: 35%))
3,837 (6,993) (807) (18,956) Adjusted (loss)/profit for the period (i.e. adjusted net income) (7,126) 12,988 1,498 35,203 Adjusted basic (loss)/earnings per share: Adjusted basic (loss)/earnings per share (pence) (4.35) 7.93 0.91 21.49 Weighted average number of ordinary shares outstanding (thousands) 163,797 163,812 163,794 163,815 Adjusted diluted (loss)/earnings per share: Adjusted diluted (loss)/earnings per share (pence) (4.34) 7.93 0.91 21.49 Weighted average number of ordinary shares outstanding (thousands) 164,140 163,812 164,140 163,8154 Cash generated from operations
Three months ended31 March
Nine months ended31 March
2015£’000
2014£’000
2015£’000
2014£’000
(Loss)/profit for the period (2,874) 10,914 6,015 29,661 Tax (credit)/expense (8,555) 9,520 (1,519) 20,644 (Loss)/profit before tax (11,429) 20,434 4,496 50,305 Depreciation 2,469 2,206 7,365 6,274 Impairment - - - 293 Amortization 25,708 13,841 73,931 39,163 Loss/(profit) on disposal of players’ registrations 1,556 (2,361) (18,204) (4,203) Net finance costs 5,867 5,923 18,245 21,419 Profit on disposal of property, plant and equipment - - 5 (43) Equity-settled share-based payments 322 377 1,029 918 Foreign exchange losses/(gains) on operating activities 438 97 (530) 469 Other fair value losses/(gains) on derivative financial instruments 3,131 (58) 4,342 (184) Reclassified from hedging reserve (1,383) (260) (3,774) (778) (Increase)/decrease in trade and other receivables (22,468) (7,594) 29,930 (11,535) Decrease in trade and other payables and deferred revenue (7,400) (36,575) (71,103) (69,930) Decrease in provisions - - - (1,475) Cash (used in)/generated from operations (3,189) (3,970) 45,732 30,693
Investor Relations:Samanta Stewart, +44 207 054 5928ir@manutd.co.ukorMedia:Philip Townsend, +44 161 868 8148Manchester United plcphilip.townsend@manutd.co.ukorSard Verbinnen & CoJim Barron / Michael Henson,+ 1 212 687 8080JBarron@SARDVERB.com
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