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 2022 fiscal first quarter ended 30 September 2021.

Ed Woodward, Executive Vice Chairman, commented, “While these financial results today demonstrate our resilience through the pandemic, our top priority is success on the pitch. The manager, players and everyone at the club are determined to achieve that objective.”

Key Financials (unaudited)

COVID-19 Impact

Due to remaining summer restrictions on overseas travel, we did not undertake a first team overseas tour at the start of fiscal 2022, and instead we played four domestic games, two of which were held at Old Trafford. Whilst the nature of the ongoing pandemic may result in UK government restrictions being re-imposed in the future, the majority of such restrictions were lifted ahead of the start of the 2021/22 season, with Old Trafford stadium welcoming back fans at full capacity.

Revenue Analysis

Commercial

Commercial revenue for the quarter was £64.4 million, an increase of £4.7 million, or 7.9%, over the prior year quarter.

• Sponsorship revenue was £36.3 million, a decrease of £0.2 million, or 0.5%, over the prior year quarter.
• Retail, Merchandising, Apparel & Product Licensing revenue was £28.1 million, an increase of £4.9 million, or 21.1%, over the prior year quarter primarily due to increased Megastore footfall as a result of home games being played in front of a full capacity crowd, combined with the impact of new player signings. In the prior year quarter all home games were played behind closed doors.

Broadcasting

Broadcasting revenue for the quarter was £43.3 million, a decrease of £4.3 million, or 9.0%, over the prior year quarter, primarily due to playing four fewer home and away games across domestic competitions, due to the completion of the 2019/20 Premier League and FA Cup competitions during the prior year quarter. This is partially offset by the impact of playing two UEFA Champions League games in the current quarter compared to three UEFA Europa League games in the prior year quarter (relating to completion of the 2019/20 UEFA competition).

Matchday

Matchday revenue for the quarter was £18.8 million, an increase of £17.1 million, or 1005.9%, over the prior year quarter, due to all five home games being played in front of a full capacity crowd. All five home games in the prior year quarter were played behind closed doors.

Other Financial Information

Operating expenses

Total operating expenses for the quarter were £154.1 million, an increase of £30.6 million, or 24.8%, over the prior year quarter.

Employee benefit expenses

Employee benefit expenses for the quarter were £88.5 million, an increase of £16.6 million, or 23.1%, over the prior year quarter due to investment in the first team playing squad.

Other operating expenses

Other operating expenses for the quarter were £26.8 million, an increase of £10.5 million, or 64.4%, over the prior year quarter. This includes the impact of all home games being played in front of a full capacity crowd and costs related to the increased activity at the Old Trafford Megastore. In the prior year quarter all home games were played behind closed doors.

Depreciation and amortization

Depreciation for the quarter was £3.7 million, a decrease of £0.1 million, or 2.6%, over the prior year quarter. Amortization for the quarter was £35.1 million, an increase of £3.6 million, or 11.4%, over the prior year quarter. The unamortized balance of registrations at 30 September 2021 was £422.5 million.

Profit/(loss) on disposal of intangible assets

Profit on disposal of intangible assets for the quarter was £17.4 million, compared to a loss of £12.6 million for the prior year quarter.

Net finance (costs)/income

Net finance costs for the quarter were £9.6 million, compared to net finance income of £nil in the prior year quarter, primarily due to an unfavourable swing in unrealized foreign exchange movements in the current quarter compared to a favourable swing in the prior year quarter.

Income tax

The income tax credit for the quarter was £4.3 million, compared to an income tax expense of £3.2 million in the prior year quarter.

Cash flows

Overall cash and cash equivalents (including the effects of exchange rate movements) decreased by £12.0 million in the quarter to 30 September 2021 compared to the cash position at 30 June 2021.

Net cash inflow from operating activities for the quarter was £63.6 million, compared to net cash inflow from operating activities in the prior year quarter of £62.3 million.

Net capital expenditure on property, plant and equipment for the quarter was £3.7 million, an increase of £1.9 million over the prior year quarter.

Net capital expenditure on intangible assets for the quarter was £61.1 million, an increase of £9.5 million over the prior year quarter.

Net cash outflow from financing activities for the quarter was £11.1 million, an increase of £10.7 million over the prior year quarter. Current quarter cash outflow includes a semi-annual cash dividend of $0.09 per share paid on 30 July 2021.

Net debt

Net Debt as of 30 September 2021 was £439.7 million, compared to £440.6 million as of 30 September 2020. As of 30 September 2021, the Company had undrawn credit facilities of £140.0 million.

Dividend

A semi-annual cash dividend of $0.09 per share will be paid on 7 January 2022, to shareholders of record on 1 December 2021. The stock will begin to trade ex-dividend on 30 November 2021.

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 143-year football heritage we have won 66 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. Forward-looking statements include information concerning certain expectations and uncertainties related to the COVID-19 pandemic and 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/loss on disposal of intangible assets, 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), 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 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 foreign exchange losses/gains on unhedged US dollar denominated borrowings (including foreign exchange gains/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, subtracting/adding the actual tax credit/expense for the period, and adding the adjusted tax credit for the period (based on an normalized tax rate of 21%; 2020: 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% (2020: 21%) applicable during the financial year. 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 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.

4. Net debt

Net debt is calculated as non-current and current borrowings minus cash and cash equivalents.

Key Performance Indicators

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

3 Reconciliation of loss for the period to adjusted loss for the period and adjusted basic and diluted loss per share

4 Cash generated from operations

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