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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 | |
---|---|---|---|---|---|---|---|---|
-0.18 | -1.11% | 16.02 | 16.25 | 16.00 | 16.17 | 476,089 | 23:00:05 |
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 2016 fiscal fourth quarter and twelve months ended 30 June 2016.
HighlightsCommentary
Ed Woodward, Executive Vice Chairman commented, “Our record Fiscal 2016 financial performance reflects the continued underlying strength of the business and the Club is on target to achieve record revenues in 2017, even without a contribution from the Champions League. This strong financial performance has enabled us to invest in our squad, team management and facilities to position us to challenge for, and win, trophies in the coming years.”
Outlook
For fiscal 2017, Manchester United expect:
Key Financials (unaudited)
£ million (except earnings per share) Twelve months ended30 June
Three months ended30 June
2016 2015 Change 2016 2015 Change Commercial revenue 268.3 196.9 36.3% 65.2 45.9 42.0% Broadcasting revenue 140.4 107.7 30.4% 47.7 40.8 16.9% Matchday revenue 106.6 90.6 17.7% 21.6 19.1 13.1% Total revenue 515.3 395.2 30.4% 134.5 105.8 27.1% Adjusted EBITDA* 191.9 120.3 59.5% 49.3 32.2 53.1% Operating profit 68.9 31.6 >100% 3.6 8.9 (59.6%) Profit/(loss) for the period (i.e. net income) 36.4 (0.9) - (0.9) (6.9) (87.0%) Basic earnings/(loss) per share 22.19 (0.55) - (0.58) (4.22) (86.3%) Adjusted profit for the period (i.e. adjusted net income)* 40.8 3.4 >100% 8.7 1.4 >100% Adjusted basic earnings per share (pence)* 24.91 2.09 >100% 5.31 0.85 >100% Net Debt* 260.9 255.2 2.2% 260.9 255.2 2.2%* Adjusted EBITDA, adjusted profit for the period, adjusted basic earnings per share and net debt 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 AnalysisCommercial
Commercial revenue for the year was £268.3 million, an increase of £71.4 million, or 36.3%, over the prior year.
For the quarter, commercial revenue was £65.2 million, an increase of £19.3 million, or 42.0%, over the prior year quarter.
Broadcasting
Broadcasting revenue for the year was £140.4 million, an increase of £32.7 million, or 30.4%, over the prior year, primarily due to participation in UEFA competitions.
Broadcasting revenue for the quarter was £47.7 million, an increase of £6.9 million, or 16.9%, over the prior year quarter, primarily due to domestic cup progression and UEFA competition wash-up payments.
Matchday
Matchday revenue for the year was £106.6 million, an increase of £16.0 million, or 17.7%, over the prior year, primarily due to participation in UEFA competitions plus domestic cup progression.
Matchday revenue for the quarter was £21.6 million, an increase of £2.5 million, or 13.1%, over the prior year quarter, primarily due to playing one more FAPL home game in the quarter plus domestic cup progression.
Other Financial InformationOperating expenses
Total operating expenses for the year were £436.6 million, an increase of £49.4 million, or 12.8%, over the prior year.
Employee benefit expenses
Employee benefit expenses for the year were £232.2 million, an increase of £29.6 million, or 14.6%, over the prior year, primarily due to renewals of existing player contracts, coupled with an uplift in annual player salaries due to participation in the UEFA Champions League.
Other operating expenses
Other operating expenses for the year were £91.2 million, an increase of £18.9 million, or 26.1%, over the prior year, primarily due to retail, merchandising, apparel and licensing costs now being recognized in-house, plus an increase in matchday costs as a result of playing eight additional home games in the current year.
Depreciation & amortization
Depreciation for the year was £10.1 million, a decrease of £0.2 million, or 1.9%, over the prior year. Amortization for the year was £88.0 million, a decrease of £11.7 million, or 11.7%, over the prior year quarter. The unamortized balance of players’ registrations at 30 June 2016 was £241.7 million.
Exceptional items
Exceptional costs for the year were £15.1 million, of which £8.4 million related to compensation to the former manager and certain members of the coaching staff for loss of office and £6.7 million related to a registrations’ impairment charge regarding a reduction in the carrying value of a player no longer considered to be a member of the first team playing squad. Exceptional costs for the prior year were £2.3 million.
Net finance costs
Net finance costs for the year were £20.0 million, a decrease of £15.2 million, or 43.2%, over the prior year, including the reduction in interest payable on the secured term loan facility and senior secured notes following the refinancing in June 2015.
Tax
The tax expense for the year was £12.5 million, compared to a credit of £2.7 million in the prior year.
Cash flows
Net cash generated from operating activities for the year was £186.1 million, an increase of £42.2 million over the prior year primarily related to a reduction in interest payments.
Net capital expenditure on property, plant and equipment for the year was £5.1 million, a decrease of £0.4 million over the prior year.
Net capital expenditure on intangible assets for the year was £99.7 million, an increase of £2.9 million over the prior year.
Net cash used in financing activities for the year was £20.5 million, an increase of £65.1 million compared to £44.6 million net cash generated from financing activities in the prior year which reflected the refinancing in June 2015.
Overall cash and cash equivalents (including the effects of exchange rate changes) increased by £73.4 million in the year.
Net Debt
Net Debt as of 30 June 2016 was £260.9 million, an increase of £5.7 million over the prior year primarily due to the impact of foreign exchange rate movements on our USD denominated debt (USD/GBP exchange rate moved from 1.5712 at 30 June 2015 to 1.3332 at 30 June 2016) offsetting the increase in cash outlined above.
Dividend
The Board of Directors recently approved replacing the previous quarterly cash dividend with a regular semi-annual cash dividend on the Company's outstanding Class A and Class B ordinary shares of $0.09 per share which will be paid in January and June 2017. The specific record, ex dividend, and payment dates with respect to each semi-annual cash dividend will be announced in future releases.
Conference Call InformationThe Company’s conference call to review fiscal 2016 and fourth quarter results will be broadcast live over the internet today, 12 September 2016 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 UnitedManchester 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 138-year heritage we have won 64 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 StatementThis 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).
Statement Regarding Unaudited Financial Information
The unaudited financial information set forth is preliminary and subject to adjustments. The audit of the financial statements and related notes to be included in our annual report on Form 20-F for the year ended 30 June 2016 is still in progress. Adjustments to the financial statements may be identified when audit work is completed, which could result in significant differences from this preliminary unaudited financial information.
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 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/(loss) 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 unhedged US dollar denominated borrowings, and fair value movements on derivative financial instruments, 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%; 2015: 35%). The normalized tax rate of 35% is management’s estimate of the tax rate likely to be applicable to the Group in the foreseeable future.
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 profit/(loss) for the period is presented in supplemental note 3.
3. Adjusted basic and diluted earnings per share
Adjusted basic and diluted earnings per share are 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.
4. Net debt
Net debt is calculated as non-current and current borrowings minus cash and cash equivalents.
Key Performance Indicators Twelve months ended Three months ended 30 June 30 June 2016 2015 2016 2015 Commercial % of total revenue 52.1% 49.8% 48.5% 43.4% Broadcasting % of total revenue 27.2% 27.3% 35.5% 38.6% Matchday % of total revenue 20.7% 22.9% 16.0% 18.0% Home Matches Played FAPL 19 19 5 4 UEFA competitions 6 - - - Domestic Cups 4 2 - - Away Matches Played UEFA competitions 6 - - - Domestic Cups 5 4 3 - Other Employees at period end 810 778 810 778 Employee benefit expenses % of revenue 45.1% 51.4% 45.7% 51.7% Phasing of Premier League home games Quarter 1 Quarter 2 Quarter 3 Quarter 4 Total 2016/17 season* 3 7 4 5 19 2015/16 season 4 5 5 5 19*Subject to changes in broadcasting scheduling
CONSOLIDATED INCOME STATEMENT (unaudited; in £ thousands, except per share and shares outstanding data)Twelve months ended 30 June
Three months ended 30 June
2016 2015 2016 2015 Revenue 515,345 395,178 134,575 105,777 Operating expenses (436,709 ) (387,179 ) (126,131 ) (102,315 ) (Loss)/profit on disposal of intangible assets (9,786 ) 23,649 (4,948 ) 5,445 Operating profit 68,850 31,648 3,496 8,907 Finance costs (20,459 ) (35,419 ) (7,534 ) (17,038 ) Finance income 442 204 152 68 Net finance costs (20,017 ) (35,215 ) (7,382 ) (16,970 ) Profit/(loss) before tax 48,833 (3,567 ) (3,886 ) (8,063 ) Tax (expense)/credit (12,462 ) 2,672 2,929 1,153 Profit/(loss) for the period 36,371 (895 ) (957 ) (6,910 ) Basic earnings/(loss) per share: Basic earnings/(loss) per share (pence) 22.19 (0.55 ) (0.58 ) (4.22 ) Weighted average number of ordinary shares outstanding (thousands) 163,890 163,795 163,892 163,798 Diluted earnings/(loss) per share: Diluted earnings/(loss) per share (pence)
22.13
(0.55
)1
(4.21
) Weighted average number of ordinary shares outstanding (thousands) 164,319 164,132 164,319 164,132(1) For the three months ended 30 June 2016, 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 of30 June
2016
As of30 June
2015
ASSETS Non-current assets Property, plant and equipment 245,714 250,626 Investment property 13,447 13,559 Intangible assets 665,634 660,397 Derivative financial instruments 3,760 - Trade and other receivables 11,223 3,836 Deferred tax asset 145,461 133,640 1,085,239 1,062,058 Current assets Inventories 926 - Derivative financial instruments 7,888 27 Trade and other receivables 128,657 83,627 Tax receivable - 124 Cash and cash equivalents 229,194 155,752 366,665 239,530 Total assets 1,451,904 1,301,588 CONSOLIDATED BALANCE SHEET (continued) (unaudited; in £ thousands) As of30 June
2016
As of30 June
2015
EQUITY AND LIABILITIES Equity Share capital 52 52 Share premium 68,822 68,822 Merger reserve 249,030 249,030 Hedging reserve (32,989) 4,729 Retained earnings 173,367 155,285 458,282 477,918 Non-current liabilities Derivative financial instruments 10,637 2,769 Trade and other payables 41,450 48,078 Borrowings 484,528 410,482 Deferred revenue 38,899 21,583 Deferred tax liabilities 14,364 17,311 589,878 500,223 Current liabilities Derivative financial instruments 2,800 2,966 Tax liabilities 6,867 2,105 Trade and other payables 199,669 131,283 Borrowings 5,564 485 Deferred revenue 188,844 186,608 403,744 323,447 Total equity and liabilities 1,451,904 1,301,588 CONSOLIDATED STATEMENT OF CASH FLOWS (unaudited; in £ thousands)Twelve months ended 30 June
Three months ended 30 June
2016 2015 2016 2015 Cash flows from operating activities Cash generated from operations (see supplemental note 4) 200,864 195,021 155,263 149,289 Interest paid (13,219 ) (42,624 ) (1,682 ) (18,488 ) Debt finance costs relating to borrowings - (6,508 ) - (5,684 ) Interest received 487 502 241 45 Tax paid (2,040 ) (2,466 ) (142 ) (185 ) Net cash generated from operating activities 186,092 143,925 153,680 124,977 Cash flows from investing activities Payments for property, plant and equipment (5,101 ) (5,466 ) (4,318 ) (1,380 ) Proceeds from sale of property, plant and equipment 19 - - - Payments for intangible assets (138,095 ) (117,446 ) (25,155 ) (16,174 ) Proceeds from sale of intangible assets 38,357 20,649 1,628 486 Net cash used in investing activities (104,820 ) (102,263 ) (27,845 ) (17,068 ) Cash flows from financing activities Proceeds from borrowings - 272,539 - 267,835 Repayment of borrowings (371 ) (227,950 ) (94 ) (227,649 ) Dividends paid (20,084 ) - (5,080 ) - Net cash (used in)/generated from financing activities (20,455 ) 44,589 (5,174 ) 40,186 Net increase in cash and cash equivalents 60,817 86,251 120,661 148,095 Cash and cash equivalents at beginning of period 155,752 66,365 104,202 11,204 Effects of exchange rate changes on cash and cash equivalents 12,625 3,136 4,331 (3,547 ) Cash and cash equivalents at end of period 229,194 155,752 229,194 155,752SUPPLEMENTAL 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
Twelve months ended 30 June
Three months ended 30 June
2016 £’000
2015£’000
2016 £’000
2015£’000
Profit/(loss) for the period 36,371 (895 ) (957 ) (6,910 ) Adjustments: Tax expense/(credit) 12,462 (2,672 ) (2,929 ) (1,153 ) Net finance costs 20,017 35,215 7,382 16,970 Loss/(profit) on disposal of intangible assets 9,786 (23,649 ) 4,948 (5,445 ) Exceptional items 15,135 2,336 15,135 - Amortization 88,009 99,687 23,059 25,756 Depreciation 10,079 10,324 2,588 2,959 Adjusted EBITDA 191,859 120,346 49,226 32,1773 Reconciliation of profit/(loss) for the period to adjusted profit for the period and adjusted basic and diluted earnings per share
Twelve months ended 30 June
Three months ended 30 June
2016 £’000
2015£’000
2016 £’000
2015£’000
Profit/(loss) for the period 36,371 (895 ) (957 ) (6,910 ) Exceptional items 15,135 2,336 15,135 - Accelerated amortisation of issue discount and debt finance costs - 3,773 - 3,773 Premium on redemption of senior secured notes - 3,552 - 3,552 Foreign exchange losses on unhedged US dollar denominated borrowings 4,136 288 3,164 288 Fair value movement on derivative financial instruments (5,288 ) (1,115 ) (1,025 ) 2,596 Tax expense/(credit) 12,462 (2,672 ) (2,929 ) (1,153 ) Adjusted profit before tax 62,816 5,267 13,388 2,146 Adjusted tax expense (using a normalised tax rate of 35% (2015: 35%)) (21,986 ) (1,843 ) (4,686 ) (751 ) Adjusted profit for the period (i.e. adjusted net income) 40,830 3,424 8,702 1,395 Adjusted basic earnings per share: Adjusted basic earnings per share (pence) 24.91 2.09 5.31 0.85 Weighted average number of ordinary shares outstanding (thousands) 163,890 163,795 163,892 163,798 Adjusted diluted earnings per share: Adjusted diluted earnings per share (pence) 24.85 2.09 5.30 0.85 Weighted average number of ordinary shares outstanding (thousands) 164,319 164,132 164,319 164,1324 Cash generated from operations
Twelve months ended30 June
Three months ended30 June
2016 £’000
2015£’000
2016 £’000
2015£’000
Profit/(loss) for the period 36,371 (895 ) (957 ) (6,910 ) Tax expense/(credit) 12,462 (2,672 ) (2,929 ) (1,153 ) Profit/(loss) before tax 48,833 (3,567 ) (3,886 ) (8,063 ) Depreciation 10,079 10,324 2,588 2,959 Impairment charges 6,693 - 6,693 - Amortization 88,009 99,687 23,059 25,756 Loss/(profit) on disposal of intangible assets 9,786 (23,649 ) 4,948 (5,445 ) Net finance costs 20,017 35,215 7,382 16,970 Loss on disposal of property, plant and equipment 126 5 116 - Equity-settled share-based payments 1,795 1,352 625 323 Net exchange differences 570 (584 ) (1,364 ) (54 ) Other fair value (gains)/losses on derivative financial instruments (8,230 ) 5,498 (2,601 ) 1,156 Reclassified from hedging reserve 1,382 (4,713 ) 374 (939 ) (Increase)/decrease in inventories (926 ) - 367 - (Increase)/decrease in trade and other receivables (31,741 ) 58,503 (33,515 ) 28,573 Increase in trade and other payables and deferred revenue 54,471 16,950 150,477 88,053 Cash generated from operations 200,864 195,021 155,263 149,289
View source version on businesswire.com: http://www.businesswire.com/news/home/20160912005660/en/
Investor Relations:Samanta Stewart, +44 207 054 5928ir@manutd.co.ukorMedia:Manchester United plcPhilip Townsend, +44 161 868 8148philip.townsend@manutd.co.ukorSard Verbinnen & CoJim Barron / Michael Henson, + 1 212 687 8080JBarron@SARDVERB.com
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