Key Points

• Club announced the completion of the minority investment by Sir Jim Ratcliffe which includes an additional $300 million of primary investment, $200 million of which was received upon completion
• Club announced the appointment of Omar Berrada as CEO
• Club achieved record 2Q revenues of £225.8 million driven primarily by UEFA Champions League participation benefit and continued strong Matchday momentum with record attendance for all teams
• Both the Men and Women’s first teams advanced to the quarterfinals of the Men and Women’s FA Cup competitions with matches scheduled for mid-March
• The Men’s first team loaned out a total of 11 players in the January transfer window, while the Women’s team loaned out two players
• Club announced a new partnership with SCAYLE to provide a best-in-class e-commerce experience beginning Fiscal 2025
• On 8 March, the Club announced the creation of a task force to explore options for stadium development at Old Trafford and regeneration of the surrounding area
• Club announced a return to the USA for Summer Tour 2024 with matches scheduled for Los Angeles, California on 27 July and Columbia, South Carolina on 3 August with an additional US match to be announced

Manchester United (NYSE: MANU; the “Company,” the “Group” and the “Club”) – one of the most popular and successful sports teams in the world – today announced financial results for the 2024 fiscal second quarter ended 31 December 2023.

Cliff Baty, Chief Financial Officer, said: “We delivered strong revenues during the first half of the fiscal year and have reiterated our guidance for record revenues for the full fiscal year. This is an exciting time at Manchester United following the completion of Sir Jim Ratcliffe’s investment, and we are all focused on working together with our new co-owners to drive the club forward and deliver success on the pitch.”

Outlook

For fiscal 2024, the Company reiterates its previous revenue guidance of £635 million to £665 million and its previous adjusted EBITDA guidance of £125 million to £150 million.

Key Financials (unaudited)

⁽¹⁾ Adjusted EBITDA, adjusted profit/(loss) for the period and adjusted basic earnings/(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 December 2023 was £260.0 million and total current borrowings including accrued interest payable was £266.8 million.

Revenue Analysis

Commercial

Commercial revenue for the quarter was £71.8 million, a decrease of £6.9 million, or 8.8%, over the prior year quarter.

• Sponsorship revenue was £39.2 million, a decrease of £11.2 million, or 22.2%, over the prior year quarter, primarily due to a one off sponsorship credit in the prior year quarter.
• Retail, Merchandising, Apparel & Product Licensing revenue was £32.6 million, an increase of £4.3 million, or 15.2%, over the prior year quarter, due to the extension of our contract with Adidas and strong megastore performance.

Broadcasting

Broadcasting revenue for the quarter was £106.4 million, an increase of £47.6 million, or 81.0%, over the prior year quarter, primarily due to the men’s first team participating in the UEFA Champions League compared to the UEFA Europa League in the prior year.

Matchday

Matchday revenue for the quarter was £47.6 million, an increase of £17.7 million, or 59.2%, over the prior year quarter, primarily due to playing two more home games in the current year quarter compared to the prior year quarter and the men’s first team participating in the UEFA Champions League rather than the UEFA Europa League.

Other Financial Information

Operating expenses

Total operating expenses for the quarter were £198.7 million, an increase of £31.1 million, or 18.6%, over the prior year quarter.

Employee benefit expenses

Employee benefit expenses for the quarter were £95.1 million, an increase of £17.8 million, or 23.0%, over the prior year quarter, as a result of the men’s first team participating in the UEFA Champions League in the current year, compared to the UEFA Europa League in the prior year.

Other operating expenses

Other operating expenses for the quarter were £39.3 million, a decrease of £2.4 million, or 5.8%, over the prior year quarter.

Depreciation and amortization

Depreciation for the quarter was £4.2 million, compared to £3.6 million in the prior year quarter. Amortization for the quarter was £50.5 million, an increase of £5.5 million, or 12.2%, over the prior year quarter, due to investment in the first team playing squad. The unamortized balance of registrations at 31 December 2023 was £494.2 million.

Exceptional items

Exceptional items for the quarter were a cost of £9.6 million. This comprises of costs incurred in relation to the Group’s strategic review and agreed sale of 25% of Class B shares and up to 25% of Class A shares to Sir Jim Ratcliffe. Exceptional items in the prior year quarter were £nil. Further exceptional items have been recognized in the third quarter of fiscal 2024, after Premier League and Football Association approval of the deal was received.

Profit on disposal of intangible assets

Profit on disposal of intangible assets for the quarter was £0.4 million, compared to a loss of £2.6 million for the prior year quarter.

Net finance (costs)/income

Net finance costs for the quarter were £0.3 million, compared to net finance income of £12.1 million in the prior year quarter, primarily due to a lower gain on re-translation of unhedged USD borrowings.

Income tax

The income tax expense for the quarter was £6.8 million, compared to an income tax expense of £2.9 million in the prior year quarter.

Cash flows

Overall cash and cash equivalents (including the effects of exchange rate movements) decreased by £18.0 million in the quarter to 31 December 2023, compared to an increase of £6.7 million in the prior year quarter.

Net cash outflow from operating activities for the quarter was £46.6 million, compared to £61.5 million in the prior year quarter.

Net capital expenditure on property, plant and equipment for the quarter was £2.8 million, an increase of £0.1 million over the prior year quarter.

Net capital expenditure on intangible assets for the quarter was £35.7 million, an increase of £5.8 million over the prior year quarter.

Net cash inflow from financing activities for the quarter was £59.7 million, compared to £99.4 million in the prior year quarter. This is due to a £60.0 million drawdown on the revolving credit facilities in the current quarter compared to a £100.0 million drawdown on the revolving credit facilities in the prior year quarter.

Balance sheet

Our USD non-current borrowings as of 31 December 2023 were $650 million, which was unchanged from 31 December 2022. As a result of the year-on-year change in the USD/GBP exchange rate from 1.2040 at 31 December 2022 to 1.2746 at 31 December 2023, our non-current borrowings when converted to GBP were £506.5 million, compared to £535.7 million at the prior year quarter.

In addition to non-current borrowings, the Group maintains a revolving credit facility which varies based on seasonal flow of funds. Current borrowings at 31 December 2023 were £266.8 million compared to £206.2 million at 31 December 2022.

As of 31 December 2023, cash and cash equivalents were £62.8 million compared to £31.0 million at the prior year quarter, primarily due to the drawdowns on our revolving facilities, offset by investment in the first team playing squad.

About Manchester United

Manchester United is one of the most popular and successful sports teams in the world, playing one of the most popular spectator sports on Earth. Through our 146-year football heritage we have won 67 trophies, enabling us to develop what we believe is one of the world’s leading sports and entertainment brands with a global community of 1.1 billion fans and followers. Our large, passionate, and highly engaged fan base provides Manchester United with a worldwide platform to generate significant revenue from multiple sources, including sponsorship, merchandising, product licensing, broadcasting and matchday initiatives which in turn, directly fund our ability to continuously reinvest in the club.

Cautionary Statements

This press release contains forward‑looking statements. You should not place undue reliance on such statements because they are subject to numerous risks and uncertainties relating to the Company’s operations and business environment, all of which are difficult to predict and many are beyond the Company’s control. These statements often include words such as “may,” “might,” “will,” “could,” “would,” “should,” “expect,” “plan,” “anticipate,” “intend,” “seek,” “believe,” “estimate,” “predict,” “potential,” “continue,” “contemplate,” “possible” or similar expressions. The forward-looking statements contained in this press release are based on our current expectations and estimates of future events and trends, which affect or may affect our businesses and operations. You should understand that these statements are not guarantees of performance or results. They involve known and unknown risks, uncertainties and assumptions. Although the Company believes that these forward-looking statements are based on reasonable assumptions, you should be aware that many factors could affect its actual financial results or results of operations and could cause actual results to differ materially from those in these forward-looking statements. These factors are more fully discussed in the “Risk Factors” section and elsewhere in the Company’s Registration Statement on Form F-1, as amended (File No. 333-182535) and the Company’s Annual Report on Form 20-F (File No. 001-35627) as supplemented by the risk factors contained in the Company’s other filings with the Securities and Exchange Commission.

Non-IFRS Measures: Definitions and Use

1. Adjusted EBITDA

Adjusted EBITDA is defined as profit/(loss) for the period before depreciation, amortization, profit/(loss) on disposal of intangible assets, exceptional items, net finance (costs)/income, 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/(loss) on disposal of intangible assets and exceptional items), capital structure (primarily finance (costs)/income), and items outside the control of our management (primarily taxes). Adjusted EBITDA has limitations as an analytical tool, and you should not consider it in isolation, or as a substitute for an analysis of our results as reported under IFRS as issued by the IASB. A reconciliation of profit/(loss) for the period to adjusted EBITDA is presented in supplemental note 2.

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

Adjusted loss for the period is calculated, where appropriate, by adjusting for charges related to exceptional items, foreign exchange gains/(losses) on unhedged US dollar denominated borrowings and fair value movements on embedded foreign exchange derivatives, adding/subtracting the actual tax expense/credit for the period, and adding/subtracting the adjusted tax credit/expense for the period (based on an normalized tax rate of 21%; 2022: 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% (2022: 21%) applicable during the financial year. A reconciliation of profit/(loss) for the period to adjusted loss for the period is presented in supplemental note 3.

3. Adjusted basic and diluted earnings/(loss) per share

Adjusted basic and diluted earnings/(loss) per share are calculated by dividing the adjusted loss for the period by the weighted average number of ordinary shares in issue during the period. Adjusted diluted loss per share is calculated by adjusting the weighted average number of ordinary shares in issue during the period to assume conversion of all dilutive potential ordinary shares. There is one category of dilutive potential ordinary shares: share awards pursuant to the 2012 Equity Incentive Plan (the “Equity Plan”). Share awards pursuant to the Equity Plan are assumed to have been converted into ordinary shares at the beginning of the financial year. Adjusted basic and diluted loss per share are presented in supplemental note 3.

Key Performance Indicators

⁽¹⁾ Each element of finance income is split based on its position in both the 3 months ended 31 December 2023 and the 6 months ended 31 December 2023. In the current year, exchange rate fluctuations have resulted in income for the 3 months ended 31 December 2023 that is greater than the total net position across the 6 months ended 31 December 2023.

⁽²⁾ For the six months ended 31 December 2023 and 31 December 2022, 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.

SUPPLEMENTAL NOTES

1 General information

Manchester United plc (the “Company”) and its subsidiaries (together the “Group”) is a men’s and women’s professional football club together with related and ancillary activities. The Company incorporated under the Companies Law (as amended) of the Cayman Islands.

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

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

⁽¹⁾ For the three and six months ended 31 December 2022 potential ordinary shares are anti-dilutive, as their inclusion in the diluted loss per share calculation would reduce the loss per share, and hence have been excluded.

4 Cash used in operations

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