Manchester United Plc Reports Third Quarter Fiscal 2025 Results

Business Wire

a day ago

MANCHESTER, England--(BUSINESS WIRE)--Manchester United (NYSE: MANU; the 'Company,' the 'Group' and the 'Club') today announced financial results for the 2025 fiscal third quarter ended 31 March 2025.
Management Commentary
Omar Berrada, Chief Executive Officer, commented, 'We were proud to reach the final of the UEFA Europa League, but ultimately, we were disappointed to finish as runner-up in Bilbao. We had a difficult season in the Premier League, which we all know fell below our standards and we have a clear expectation of improvement next season. We have been pleased with the performance of our women's team, with a third placed league finish, enabling us to qualify for the UEFA Champions League and once again reaching the FA Cup Final. We followed this by reaching the final of the inaugural World Sevens Series. We extended the contract of Head Coach, Marc Skinner, reflecting the excellent work he has done with the team this season.
'We remain focused on infrastructure, with the redevelopment of our Carrington Training Complex continuing and on track, which will be the heart of our club, providing world class facilities for all our teams and our staff. We have also announced our aspiration to pursue a new 100,000 seat stadium, sitting at the heart of the regeneration of the Old Trafford area, which would be a catalyst for growth and investment in our local community. We are continuing to work with all the relevant stakeholders, including central Government, to support their vision for growth.'
Outlook
For fiscal 2025, the Company tightens its revenue guidance to £660m to £670m and expects to be at the higher end of this range. The Company also raises its Adjusted EBITDA guidance to between £180 million and £190 million. The club remains committed to, and in compliance with, both the Premier League's Profit and Sustainability Rules and UEFA's Financial Fair Play Regulations.
Key Financials (unaudited)
(1)
Adjusted EBITDA, adjusted loss for the period and adjusted basic 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 March 2025 was £210.0 million and total current borrowings including accrued interest payable was £212.3 million.
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Revenue Analysis
Commercial
Commercial revenue for the quarter was £74.7 million, an increase of £5.1 million, or 7.3%, over the prior year quarter.
Sponsorship revenue was £42.5 million, an increase of £1.8 million, or 4.4%, over the prior year quarter, primarily due to the new Qualcomm front of shirt sponsorship agreement, partially offset by other changes in our commercial agreements.
Retail, Merchandising, Apparel & Product Licensing revenue was £32.2 million, an increase of £3.3 million, or 11.4%, over the prior year quarter, primarily due to the launch of our new e-commerce model in partnership with SCAYLE.
Broadcasting
Broadcasting revenue for the quarter was £41.3 million, an increase of £3.8 million, or 10.1%, over the prior year quarter, primarily due to the men's first team playing 4 additional matches in UEFA competitions in the current year quarter, partially offset by 1 less match played in domestic cup competitions versus the prior year quarter.
Matchday
Matchday revenue for the quarter was £44.5 million, an increase of £14.9 million, or 50.3%, over the prior year quarter, due to playing 4 more home matches compared to the prior year quarter, alongside strong demand for our hospitality offering.
Other Financial Information
Operating expenses
Total operating expenses for the quarter were £162.1 million, a decrease of £41.6 million, or 20.4%, over the prior year quarter.
Employee benefit expenses
Employee benefit expenses for the quarter were £71.2 million, a decrease of £20.0 million, or 21.9%, over the prior year quarter. This is primarily due to the impact of transactions made during the January transfer window, the men's first team participating in the UEFA Europa League rather than the UEFA Champions League in the prior year and reduced non-playing staff costs as a result of the club's restructuring process.
Other operating expenses
Other operating expenses for the quarter were £38.1 million, an increase of £6.3 million, or 19.8%, over the prior year quarter. This is primarily due to increased matchday costs associated with playing 4 more home games in the quarter, compared to the prior year quarter and additional costs associated with our new e-commerce model, partially offset by a reduction in costs as a result of the company's focus on improving operating efficiency.
Depreciation and amortization
Depreciation for the quarter was £4.2 million, compared to £4.1 million in the prior year quarter. Amortization for the quarter was £45.9 million, a decrease of £0.4 million, or 0.9%, over the prior year quarter. The unamortized balance of registrations on 31 March 2025 was £513.7 million.
Exceptional items
Exceptional items for the quarter were a cost of £2.7 million, as a result of compensation for loss of office costs incurred in relation to the restructuring of the club's operations. Exceptional items for the prior year quarter were a cost of £30.3 million. This comprised costs incurred in relation to the sale of 27.7% of the Group's voting rights to Trawlers Limited, an entity wholly owned by Sir Jim Ratcliffe. These voting rights have been subsequently transferred from Trawlers Limited to INEOS Limited.
Profit on disposal of intangible assets
Profit on disposal of intangible assets for the quarter was £2.3 million, compared to a profit of £0.8 million for the prior year quarter.
Net finance costs
Net finance costs for the quarter were £3.8 million, compared to £17.3 million in the prior year quarter. The movement was primarily driven by a favourable swing in foreign exchange rates in the current quarter (gain on re-translation of £7.3 million), compared to an unfavourable swing in foreign exchange rates in the prior year quarter (loss on re-translation of £2.6 million).
Income tax
The income tax credit for the quarter was £0.4 million, compared to a credit of £12.1 million in the prior year quarter.
Cash flows
Overall cash and cash equivalents (including the effects of exchange rate movements) decreased by £22.5 million in the quarter to 31 March 2025, compared to an increase of £4.2 million in the prior year quarter.
Net cash inflow from operating activities for the quarter was £22.3 million, compared to a net cash outflow in the prior year quarter of £15.1 million. This is primarily due to increased matchday and broadcasting income compared to the prior year quarter, in addition to a reduced cost base, as described above.
Net capital expenditure on property, plant and equipment for the quarter was £16.9 million, an increase of £13.9 million over the prior year quarter, due to the improvement works taking place to our Carrington training facility.
Net capital expenditure on intangible assets for the quarter was £31.3 million, an increase of £15.5 million over the prior year quarter due to investment in the first team playing squad.
Net cash outflow from financing activities for the quarter was £0.1 million, compared to a net cash inflow of £38.4 million in the prior year quarter. The prior year quarter saw £158.5 million of proceeds from the issue of shares as part of the transaction agreement with Trawlers Limited, partially offset by a £120.0 million repayment of our revolving facilities.
Balance sheet
Our USD non-current borrowings as of 31 March 2025 were $650 million, which was unchanged from 31 March 2024. As a result of the year-on-year change in the USD/GBP exchange rate from 1.2632 at 31 March 2024 to 1.2913 at 31 March 2025, our non-current borrowings when converted to GBP were £500.9 million, compared to £511.3 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 March 2025 were £212.3 million compared to £143.0 million at 31 March 2024.
As of 31 March 2025, cash and cash equivalents were £73.2 million compared to £67.0 million at the prior year quarter. This movement is detailed further in the Statement of Cash Flows on page 11 of this release.
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 147-year football heritage we have won 69 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 loss for the period before depreciation, amortization, exceptional items, profit on disposal of intangible assets, 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 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/credits related to exceptional items, foreign exchange gains/losses on unhedged US dollar denominated borrowings (including foreign exchange 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 and foreign currency options, adding/subtracting the actual tax expense/credit for the period, and subtracting/adding the adjusted tax expense/credit for the period (based on a normalized tax rate of 21%; 2024: 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% (2024: 21%) applicable during the financial year. A reconciliation of loss for the period to adjusted loss 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.
(1)
For the three and nine months ended 31 March 2025 and the three and nine months ended 31 March 2024, 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.
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CONSOLIDATED BALANCE SHEET
(unaudited; in £ thousands)
As of
31 March
2025
30 June
2024
31 March
2024
ASSETS
Non-current assets
Property, plant and equipment
280,008
256,118
254,908
Right-of-use assets
7,394
8,195
7,913
Investment properties
19,503
19,713
19,783
Intangible assets
942,507
837,564
877,283
Deferred tax assets
25,336
17,607
11,010
Trade receivables
47,679
27,930
24,694
Derivative financial instruments
191
380
667
1,322,618
1,167,507
1,196,258
Current assets
Inventories
12,003
3,543
3,757
Prepayments
19,460
18,759
17,235
Contract assets – accrued revenue
40,882
39,778
53,887
Trade receivables
123,122
36,999
37,673
Other receivables
1,696
2,735
1,835
Derivative financial instruments
21
1,917
1,539
Cash and cash equivalents
73,211
73,549
66,994
270,395
177,280
182,920
Total assets
1,593,013
1,344,787
1,379,178
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CONSOLIDATED BALANCE SHEET (continued)
(unaudited; in £ thousands)
As of
31 March
2025
30 June
2024
31 March
2024
EQUITY AND LIABILITIES
Equity
Share capital
56
55
55
Share premium
307,345
227,361
227,361
Treasury shares
(21,305)
(21,305)
(21,305)
Merger reserve
249,030
249,030
249,030
Hedging reserve
(550)
(1,000)
(308)
Accumulated losses
(337,161)
(309,251)
(271,628)
197,415
144,890
183,205
Non-current liabilities
Contract liabilities - deferred revenue
6,234
5,347
6,834
Trade and other payables
181,866
175,894
188,581
Borrowings
500,883
511,047
511,296
Lease liabilities
7,752
7,707
7,603
Derivative financial instruments
3,272
4,911
3,648
700,007
704,906
717,962
Current liabilities
Contract liabilities - deferred revenue
171,472
198,628
102,643
Trade and other payables
298,435
249,030
218,042
Income tax liabilities
1,022
427
851
Borrowings
212,318
35,574
142,960
Lease liabilities
836
934
730
Derivative financial instruments
4,333
2,603
1,830
Provisions
7,175
7,795
10,955
695,591
494,991
478,011
Total equity and liabilities
1,593,013
1,344,787
1,379,178
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CONSOLIDATED STATEMENT OF CASH FLOWS
(unaudited; in £ thousands)
Three months ended
31 March
Nine months ended
31 March
2025
2024
2025
2024
Cash flows from operating activities
Cash generated from/(used in) operations (see supplemental Note 4)
34,767
(2,584
)
2,168
(14,725
)
Interest paid
(12,952
)
(13,082
)
(31,723
)
(31,838
)
Interest received
667
281
2,423
853
Tax (paid)/refunded
(165
)
268
(464
)
5,524
Net cash inflow/(outflow) from operating activities
22,317
(15,117
)
(27,596
)
(40,186
)
Cash flows from investing activities
Payments for property, plant and equipment
(16,856
)
(3,109
)
(34,091
)
(14,949
)
Payments for intangible assets
(36,063
)
(18,453
)
(239,720
)
(186,395
)
Proceeds from sale of intangible assets
4,803
2,684
44,141
36,266
Net cash outflow from investing activities
(48,116
)
(18,878
)
(229,670
)
(165,078
)
Cash flows from financing activities
Proceeds from issue of shares
-
158,542
79,985
158,542
Proceeds from borrowings
30,000
-
230,000
160,000
Repayment of borrowings
(30,000
)
(120,000
)
(50,000
)
(120,000
)
Principal elements of lease payments
(102
)
(180
)
(293
)
(680
)
Net cash (outflow)/inflow from financing activities
(102
)
38,362
259,692
197,862
Effects of exchange rate movements on cash and cash equivalents
3,570
(182
)
(2,764
)
(1,623
)
Net (decrease)/increase in cash and cash equivalents
(22,331
)
4,185
(338
)
(9,025
)
Cash and cash equivalents at beginning of period
95,542
62,809
73,549
76,019
Cash and cash equivalents at end of period
73,211
66,994
73,211
66,994
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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
Three months ended
31 March
Nine months ended
31 March
2025
£'000
2024
£'000
2025
£'000
2024
£'000
Loss for the period
(2,710
)
(71,500
)
(29,126
)
(76,883
)
Adjustments:
Exceptional items
2,658
30,340
25,833
39,935
Foreign exchange (gains)/losses on unhedged US dollar denominated borrowings
(7,285
)
2,641
(8,033
)
3,062
Fair value movement on embedded foreign exchange derivatives
348
(777
)
2,079
8,332
Income tax credit
(347
)
(12,069
)
(6,820
)
(12,271
)
Adjusted loss before income tax
(7,336
)
(51,365
)
(16,067
)
(37,825
)
Adjusted income tax credit (using a normalized tax rate of 21% (2024: 21%))
1,834
10,787
4,017
7,943
Adjusted loss for the period (i.e. adjusted net loss)
(5,502
)
(40,578
)
(12,050
)
(29,882
)
Adjusted basic loss per share:
Adjusted loss per share (pence)
(3.19
)
(24.47
)
(7.07
)
(18.22
)
Weighted average number of ordinary shares used as the denominator in calculating adjusted basic loss per share (thousands)
172,353
165,823
170,459
164,040
Adjusted diluted loss per share:
Adjusted diluted loss per share (pence) (1)
(3.19
)
(24.47
)
(7.07
)
(18.22
)
Weighted average number of ordinary shares and potential ordinary shares used as the denominator in calculating adjusted diluted loss per share (thousands) (1)
172,353
165,823
170,459
164,040
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(1)
For the three and nine months ended 31 March 2025 and the three and nine months ended 31 March 2024, potential ordinary shares are anti-dilutive, as their inclusion in the adjusted diluted loss per share calculation would reduce the loss per share, and hence have been excluded.
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4 Cash generated from operations
Three months ended
31 March
Nine months ended
31 March
2025
£'000
2024
£'000
2025
£'000
2024
£'000
Loss for the period
(2,710
)
(71,500
)
(29,126
)
(76,883
)
Income tax credit
(347
)
(12,069
)
(6,820
)
(12,271
)
Loss before income tax
(3,057
)
(83,569
)
(35,946
)
(89,154
)
Adjustments for:
Depreciation
4,254
4,144
12,803
12,399
Amortization
45,867
46,262
148,560
143,602
Profit on disposal of intangible assets
(2,271
)
(790
)
(38,662
)
(30,670
)
Net finance costs
3,764
17,320
32,731
52,214
Non-cash employee benefit expense – equity-settled share-based payments
419
431
1,216
1,907
Foreign exchange losses on operating activities
2,883
411
2,731
888
Reclassified from hedging reserve
(1,067
)
2
1,876
-
Changes in working capital:
Inventories
1,420
267
(8,460
)
(592
)
Prepayments
7,806
9,522
(1,607
)
(1,311
)
Contract assets – accrued revenue
18,965
7,932
(1,104
)
(10,555
)
Trade receivables
(38,112
)
41,849
(87,355
)
(2,506
)
Other receivables
326
230
1,039
8,093
Contract liabilities – deferred revenue
7,836
(48,225
)
(26,269
)
(66,806
)
Trade and other payables
(13,876
)
1,980
1,044
(29,859
)
Provisions
(390
)
(350
)
(429
)
(2,375
)
Cash generated from/(used in) operations
34,767
(2,584
)
2,168
(14,725
)
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