TMCnet News
Manchester United plc 2019 Second Quarter ResultsManchester 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 2019 fiscal second quarter ended 31 December 2018. Highlights
Commentary Ed Woodward, Executive Vice Chairman, commented, "The appointment of Ole and Mike as caretaker manager and assistant manager, working with Kieran, Michael and Emilio, has had a positive impact throughout the club. We are delighted with the improvement in the team's performances since December and we look forward to a strong finish to the 18/19 season." Outlook For fiscal 2019, Manchester United continues to expect:
Key Financials (unaudited)
Revenue Analysis Commercial Commercial revenue for the quarter was £65.9 million, an increase of £0.6 million, or 0.9%, over the prior year quarter.
Broadcasting Broadcasting revenue for the quarter was £103.7 million, an increase of £28.5 million, or 37.9%, over the prior year quarter, primarily due to the new UEFA Champions League broadcasting rights agreement and playing one additional UEFA Champions League game. Matchday Matchday revenue for the quarter was £39.0 million, an increase of £2.1 million, or 5.7%, over the prior year quarter, primarily due to playing one additional UEFA Champions League home game. Other Financial Information Operating expenses Total operating expenses for the quarter were £160.3 million, an increase of £24.1 million, or 17.7%, over the prior year quarter. Employee benefit expenses Employee benefit expenses for the quarter were £77.9 million, an increase of £8.2 million, or 11.8%, over the prior year quarter, primarily due to investment in the first team playing squad. Other operating expenses Other operating expenses for the quarter were £26.4 million, a decrease of £0.1 million, or 0.4%, over the prior year quarter. Depreciation & amortization Depreciation for the quarter was £3.0 million, an increase of £0.3 million, or 11.1%, over the prior year quarter. Amortization for the quarter was £33.4 million, a decrease of £3.9 million, or 10.5%, over the prior year quarter. The unamortized balance of registrations at 31 December 2018 was £309.1 million. Exceptional items Exceptional items for the quarter were £19.6 million, relating to compensation to the former manager and certain members of the coaching staff for loss of office. Exceptional items for the prior year quarter were £nil. (Loss)/profit on disposal of intangible assets Loss on disposal of intangible assets for the quarter was £4.3 million, compared to a profit of £1.0 million in the prior year quarter. Net finance costs Net finance costs for the quarter were £6.3 million, an increase of £1.9 million, or 43.2%, over the prior year quarter, primarily due to unrealized, non-cash foreign exchange losses on unhedged USD borrowings compared to gains in the prior year quarter. Tax Tax expense for the quarter was £10.9 million, compared to £57.5 million in the prior year quarter. The US federal corporate income tax rate reduced from 35% to 21% following the enactment of US tax reform on 22 December 2017. This necessitated a re-measurement of the then existing US deferred tax position in the period to 31 December 2017. As a result the prior year quarter included a non-cash tax accounting write off of £49.0 million. Cash flows Net cash used in operating activities for the quarter was £42.4 million, a decrease of £2.0 million over the prior year quarter. Net capital expenditure on property, plant and equipment for the quarter was £2.4 million, a decrease of £1.7 million over the prior year quarter. Net capital expenditure on intangible assets for the quarter was £16.2 million, an increase of £4.4 million over the prior year quarter. Overall cash and cash equivalents (including the effects of exchange rate changes) decreased by £57.1 million in the quarter, compared to a decrease of £60.9 million in the prior year quarter. Net debt Net debt as of 31 December 2018 was £317.7 million, a decrease of £10.9 million over the year. The gross USD debt principal remains unchanged. Dividend A semi-annual cash dividend of $0.09 per share was paid on 4 January 2019. A further semi-annual cash dividend of $0.09 per share will be paid on 5 June 2019, to shareholders of record on 26 April 2019. The stock will begin to trade ex-dividend on 25 April 2019. Conference Call Information The Company's conference call to review second quarter fiscal 2019 results will be broadcast live over the internet today, 14 February 2019 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 teams in the world, playing one of the most popular spectator sports on Earth. Through our 141-year heritage we have won 66 trophies, enabling us to develop what we believe is one of the world's leading sports brands 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, 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 intangible assets, exceptional items, net finance costs, 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 on disposal of intangible assets and exceptional items), 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 embedded foreign exchange derivatives, adding/subtracting the actual tax expense/credit for the period, and subtracting the adjusted tax expense for the period (based on a normalized tax rate of 21%; 2017: 35%). 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) equivalent to the US federal corporate income tax rate of 21% (2017: 35%). A reconciliation of profit/(loss) 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 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. 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 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
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
(1) Comparative amounts have been restated - see supplemental note 5 for further details. 3 Reconciliation of profit/(loss) for the period to adjusted profit for the period and adjusted basic and diluted earnings per share
(1) Comparative amounts have been restated - see supplemental note 5 for further details. 4 Cash (used in)/generated from operations
(1) Comparative amounts have been restated - see supplemental note 5 for further details. 5 Restatement of prior periods following implementation of IFRS 15 The Group adopted IFRS 15 'Revenue from contracts with customers' with effect from 1 July 2018. The implementation of IFRS 15 had an impact on the Group's financial statements as at 1 July 2018 and consequently prior year amounts have been restated. The table below shows the retrospective impact on revenue for the four quarters ended 30 June 2018. Note 34 to the interim consolidated financial statements for the three and six months ended 31 December 2018 contains tables and notes which explain how the restatement affected the consolidated income statement, consolidated statement of comprehensive income, consolidated balance sheet, and consolidated statement of cash flows. Commercial revenue IFRS 15 focuses on the identification and satisfaction of performance obligations and includes specific guidance on the methods for measuring progress towards complete satisfaction of a performance obligation therefore revenue on certain commercial contracts is recognized earlier under IFRS 15. The effect of the retrospective application is an increase in cumulative revenue recognized over the financial years up to and including the year ended 30 June 2018 including a reduction to the amount of revenue recognized during the financial year ended 30 June 2018 only. Broadcasting revenue Following adoption of IFRS 15, certain performance obligations are satisfied over time as each Premier League match (home and away) is played - accordingly revenue is recognized evenly as each Premier League match (home and away) is played. Broadcasting merit awards were previously recognized one share in the first quarter with the remainder being recognized when they were known at the end of each football season. Merit awards represent variable consideration and therefore, following adoption of IFRS 15, are estimated using the most likely amount method based on management's estimate of where the Club's finishing position will be at the end of each season. Broadcasting equal share payments were previously recognized evenly as each Premier League home match was played. Note, these changes only affect the amount of broadcasting revenue recognized in each quarter, they do not affect the amount of broadcasting revenue recognized for the financial year as a whole. Matchday revenue Adoption of IFRS 15 has no impact on the recognition of matchday revenue.
View source version on businesswire.com: https://www.businesswire.com/news/home/20190214005343/en/ |
|||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
