UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 6-K
REPORT OF FOREIGN PRIVATE ISSUER
PURSUANT TO RULE 13A-16 OR 15D-16
UNDER THE SECURITIES EXCHANGE ACT OF 1934
For the month of July, 2024
Commission File Number: 001-35627
MANCHESTER UNITED PLC
(Translation of registrant’s name into English)
Old Trafford
Manchester M16 0RA
United Kingdom
(Address of principal executive offices)
Indicate by check mark whether the registrant files or will file annual
reports under cover of Form 20-F or Form 40-F. Form 20-F x Form 40-F
¨
Indicate by check mark if the registrant is submitting the Form 6-K
in paper as permitted by Regulation S-T Rule 101(b)(1). ¨
Indicate by check mark if the registrant is submitting the Form 6-K
in paper as permitted by Regulation S-T Rule 101(b)(7). ¨
THIS REPORT ON FORM 6-K IS HEREBY INCORPORATED
BY REFERENCE INTO THE FOLLOWING REGISTRATION STATEMENTS OF THE REGISTRANT:
THE REGISTRATION STATEMENT ON FORM F-3 (NO. 333-259817) ORIGINALLY FILED WITH THE SECURITIES AND EXCHANGE COMMISSION (“SEC”) ON SEPTEMBER 27, 2021, AS AMENDED, AND THE
REGISTRATION STATEMENT ON FORM S-8 (NO. 333- 183277) ORIGINALLY FILED WITH THE SEC ON AUGUST 13, 2012, AS AMENDED.
SIGNATURE
Pursuant to the requirements of the Securities Exchange Act of 1934,
the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.
Date: July 11, 2024
|
MANCHESTER UNITED PLC |
|
|
|
By: |
/s/ Roger Bell |
|
Name: Roger Bell |
|
Title: Chief Financial Officer |
EXHIBIT INDEX
Exhibit 99.1
Manchester United plc
Interim report (unaudited) for the three
and nine months
ended 31 March 2024
Contents
Management’s
discussion and analysis of financial condition and results of operations |
2 |
Interim
consolidated statement of profit or loss for the three and nine months ended 31 March 2024 and 2023 |
13 |
Interim
consolidated statement of comprehensive loss for the three and nine months ended 31 March 2024 and 2023 |
14 |
Interim
consolidated balance sheet as of 31 March 2024, 30 June 2023 and 31 March 2023 |
15 |
Interim
consolidated statement of changes in equity for the nine months ended 31 March 2024, the three months ended 30 June 2023
and the nine months ended 31 March 2023 |
17 |
Interim
consolidated statement of cash flows for the three and nine months ended 31 March 2024 and 2023 |
18 |
Notes
to the interim consolidated financial statements |
19 |
Manchester United plc
Management’s discussion and
analysis of financial condition and results of operations
GENERAL INFORMATION AND FORWARD-LOOKING
STATEMENTS
The
following Management’s discussion and analysis of financial condition and results of operations should be read in conjunction with
the interim consolidated financial statements and notes thereto included as part of this report. This report contains forward-looking
statements. You should not place undue reliance on such statements because they are subject to numerous risks and uncertainties relating
to Manchester United plc’s (“the Company”) 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 interim report 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 Annual
Report on Form 20-F for the year ended 30 June 2023, as filed with the Securities and Exchange Commission on 27 October 2023
(File No. 001-35627).
GENERAL
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 heritage we
have won 69 trophies, including a record 20 English league titles, enabling us to develop what we believe is one of the world’s
leading sports brands and a global community of 1.1 billion fans and 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. We attract leading global companies such as adidas, TeamViewer, Kohler, Tezos and Qualcomm that want access
and exposure to our community of followers and association with our brand.
RESULTS OF OPERATIONS
Three months ended 31 March 2024 as compared
to the three months ended 31 March 2023
| |
Three
months ended
31 March
(in £ millions) | | |
% Change | |
| |
2024 | | |
2023 | | |
2024 over
2023 | |
Revenue | |
| 136.7 | | |
| 170.0 | | |
| (19.6 | )% |
Commercial revenue | |
| 69.6 | | |
| 69.4 | | |
| 0.3 | % |
Broadcasting revenue | |
| 37.5 | | |
| 50.7 | | |
| (26.0 | )% |
Matchday revenue | |
| 29.6 | | |
| 49.9 | | |
| (40.7 | )% |
Total operating expenses | |
| (203.7 | ) | |
| (176.7 | ) | |
| (15.3 | )% |
Employee benefit expenses | |
| (91.2 | ) | |
| (85.0 | ) | |
| (7.3 | )% |
Other operating expenses | |
| (31.8 | ) | |
| (45.3 | ) | |
| 29.8 | % |
Depreciation | |
| (4.1 | ) | |
| (3.5 | ) | |
| (17.1 | )% |
Amortization | |
| (46.3 | ) | |
| (42.9 | ) | |
| (7.9 | )% |
Exceptional items | |
| (30.3 | ) | |
| - | | |
| - | |
Profit on disposal of intangible assets | |
| 0.8 | | |
| 2.0 | | |
| (60.0 | )% |
Net finance costs | |
| (17.3 | ) | |
| (1.0 | ) | |
| (1,630.0 | )% |
Income tax credit | |
| 12.1 | | |
| 0.1 | | |
| 12,000.0 | % |
Loss after tax | |
| (71.4 | ) | |
| (5.6 | ) | |
| (1,175.0 | )% |
Revenue
Total revenue for the three months ended 31 March 2024
was £136.7 million, a decrease of £33.3 million, or 19.6%, over the three months ended 31 March 2023, as a result
of a decrease in revenue in our Broadcasting and Matchday sectors, partially offset by an increase in revenue in our Commercial sector,
as described below.
Commercial revenue
Commercial
revenue for the three months ended 31 March 2024 was £69.6 million, an increase of £0.2 million, or 0.3%, over
the three months ended 31 March 2023.
| · | Sponsorship
revenue for the three months ended 31 March 2024 was £40.7 million, a decrease
of £0.3 million, or 0.7%, over the three months ended 31 March 2023. |
| · | Retail,
Merchandising, Apparel & Product Licensing revenue for the three months ended
31 March 2024 was £28.9 million, an increase of £0.5 million, or 1.8%, over
the three months ended 31 March 2023, due to the extension of our agreement with adidas,
partially offset by fewer matches being played at Old Trafford in the quarter. |
Broadcasting revenue
Broadcasting
revenue for the three months ended 31 March 2024 was £37.5 million, a decrease of £13.2 million, or 26.0%, over
the three months ended 31 March 2023, due to the men’s first team playing in fewer matches in the quarter, in both continental
and domestic competitions.
Matchday revenue
Matchday
revenue for the three months ended 31 March 2024 was £29.6 million, a decrease of £20.3 million, or 40.7%, over
the three months ended 31 March 2023, due to playing nine fewer home matches in the current year quarter, compared to the prior
year quarter.
Total operating expenses
Total
operating expenses (defined as employee benefit expenses, other operating expenses, depreciation and amortization and exceptional items)
for the three months ended 31 March 2024 were £203.7 million, an increase of £27.0 million, or 15.3%, over the
three months ended 31 March 2023.
Employee benefit expenses
Employee
benefit expenses for the three months ended 31 March 2024 were £91.2 million, an increase of £6.2 million, or 7.3%,
over the three months ended 31 March 2023, primarily due to investment in the first team playing squad.
Other operating expenses
Other
operating expenses for the three months ended 31 March 2024 were £31.8 million, a decrease of £13.5 million,
or 29.8%, over the 3 months ended 31 March 2023, primarily due to decreased matchday costs associated with playing nine fewer games
in the quarter, compared to the prior year quarter.
Depreciation
Depreciation for the three months ended 31 March 2024
was £4.1 million, compared to £3.5 million for the three months ended 31 March 2023.
Amortization
Amortization,
primarily of registrations, for the three months ended 31 March 2024 was £46.3 million, an increase of £3.4 million,
or 7.9%, over the three months ended 31 March 2023, due to investment in the first team playing squad. The unamortized balance
of registrations as of 31 March 2024 was £448.0 million.
Exceptional items
Exceptional items for the quarter were a cost
of £30.3 million. This comprises of 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. This follows approval of the deal by the Football Association and the Premier League
in the quarter. Exceptional items in the prior year quarter were £nil.
Profit on disposal of intangible assets
Profit
on disposal of intangible assets for the three months ended 31 March 2024 was £0.8 million, compared to £2.0
million for the three months ended 31 March 2023.
Net finance costs
Net
finance costs for the three months ended 31 March 2024 were £17.3 million, compared to net finance costs of £1.0
million for the three months ended 31 March 2023. The movement was driven by an unfavorable swing in foreign exchange rates in the
current quarter (loss on re-translation of £2.6 million), compared to a favorable swing in foreign exchange rates in the prior
year quarter (gain on re-translation of £13.0 million).
Income tax
The
income tax credit for the three months ended 31 March 2024 was £12.1 million, compared to a credit of £0.1 million
for the three months ended 31 March 2023. The current year estimated weighted average annual tax rate of 14.52% is driven by costs
not deductible in the UK associated with the strategic review, which reduces carried forward losses.
Nine months ended 31 March 2024 as compared
to the nine months ended 31 March 2023
| |
Nine
months ended
31 March
(in £ millions) | | |
% Change | |
| |
2024 | | |
2023 | | |
2024 over
2023 | |
Revenue | |
| 519.5 | | |
| 481.1 | | |
| 8.0 | % |
Commercial revenue | |
| 231.7 | | |
| 235.5 | | |
| (1.6 | )% |
Broadcasting revenue | |
| 183.3 | | |
| 144.5 | | |
| 26.9 | % |
Matchday revenue | |
| 104.5 | | |
| 101.1 | | |
| 3.4 | % |
Total operating expenses | |
| (587.1 | ) | |
| (508.0 | ) | |
| (15.6 | )% |
Employee benefit expenses | |
| (276.5 | ) | |
| (244.6 | ) | |
| (13.0 | )% |
Other operating expenses | |
| (114.7 | ) | |
| (124.8 | ) | |
| 8.1 | % |
Depreciation | |
| (12.4 | ) | |
| (10.6 | ) | |
| (17.0 | )% |
Amortization | |
| (143.6 | ) | |
| (128.0 | ) | |
| (12.2 | )% |
Exceptional items | |
| (39.9 | ) | |
| - | | |
| - | |
Profit on disposal of intangible assets | |
| 30.6 | | |
| 16.0 | | |
| 91.3 | % |
Net finance costs | |
| (52.2 | ) | |
| (19.9 | ) | |
| (162.3 | )% |
Income tax credit | |
| 12.3 | | |
| 5.0 | | |
| 146.0 | % |
Loss after tax | |
| (76.9 | ) | |
| (25.8 | ) | |
| (198.1 | )% |
Revenue
Total revenue for the nine months ended 31 March 2024
was £519.5 million, an increase of £38.4 million, or 8.0%, over the nine months ended 31 March 2023, as a
result of an increase in revenue in our Broadcasting and Matchday sectors, partially offset by a decrease in revenue in our Commercial
sector, as described below.
Commercial revenue
Commercial
revenue for the nine months ended 31 March 2024 was £231.7 million, a decrease of £3.8 million, or 1.6%, over
the nine months ended 31 March 2023.
| · | Sponsorship
revenue for the nine months ended 31 March 2024 was £136.0 million, a decrease
of £13.2 million, or 8.8%, over the nine months ended 31 March 2023, primarily
due to a one-off sponsorship credit in the prior year period. |
| · | Retail,
Merchandising, Apparel & Product Licensing revenue for the nine months ended
31 March 2024 was £95.7 million, an increase of £9.4 million, or 10.9%,
over the nine months ended 31 March 2023, primarily due to the extension of our agreement
with adidas. |
Broadcasting revenue
Broadcasting revenue for the nine months ended
31 March 2024 was £183.3 million, an increase of £38.8 million, or 26.8%, over the nine months ended 31 March 2023,
primarily due to the men’s first team participating in the UEFA Champions League in current year compared to the UEFA Europa League
in the prior year.
Matchday revenue
Matchday
revenue for the nine months ended 31 March 2024 was £104.5 million, an increase of £3.4 million, or 3.4%, over
the nine months ended 31 March 2023, primarily due to strong matchday and hospitality performance associated with participating
in the UEFA Champions League rather than the UEFA Europa League, partially offset by playing six fewer home matches in the current year.
Total operating expenses
Total operating expenses (defined as employee
benefit expenses, other operating expenses, depreciation, and amortization and exceptional items) for the nine months ended 31 March 2024
were £587.1 million, an increase of £79.1 million, or 15.6%, over the nine months ended 31 March 2023.
Employee benefit expenses
Employee benefit expenses for the nine months
ended 31 March 2024 were £276.5 million, an increase of £31.9 million, or 13.0%, over the nine months ended
31 March 2023, as a result of investment in the first team playing squad.
Other operating expenses
Other
operating expenses for the nine months ended 31 March 2024 were £114.7 million, a decrease of £10.1 million,
or 8.1%, over the nine months ended 31 March 2023. This is primarily due to decreased matchday costs associated with playing
six fewer home matches in the current year.
Depreciation
Depreciation for the nine months ended 31 March 2024
was £12.4 million, an increase of £1.8 million, or 17.0%, over the nine months ended 31 March 2023.
Amortization
Amortization, primarily of players’ registrations,
for the nine months ended 31 March 2024 was £143.6 million, an increase of £15.6 million, or 12.2%, over the
nine months ended 31 March 2023, due to increased investment in the first team playing squad. The unamortized balance of registrations
as of 31 March 2024 was £448.0 million.
Exceptional items
Exceptional
items for the nine months ended 31 March 2024 were £39.9 million. This comprises of 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.
Profit on disposal of intangible assets
Profit on disposal of intangible assets for the
nine months ended 31 March 2024 was £30.6 million, compared to a profit of £16.0 million for the nine months ended 31
March 2023.
Net finance costs
Net finance costs for the nine months ended 31
March 2024 were £52.2 million, compared to net finance costs of £19.9 million for the nine months ended 31 March 2023,
primarily due to an unfavorable swing in foreign exchange rates in the current year (loss on re-translation of £3.1 million), compared
to a favorable swing in the prior year (gain on re-translation of £10.3 million). The increase in net finance costs is also a result
of increased interest costs on our revolving facilities and a change in the valuation of closing derivative financial instruments.
Income tax
The income tax credit for the nine months ended
31 March 2024 was £12.3 million, compared to a credit of £5.0 for the nine months ended 31 March 2023. The current
year estimated weighted average annual tax rate of 14.52% is driven by costs not deductible in the UK associated with the strategic review,
which reduces carried forward losses.
LIQUIDITY AND CAPITAL RESOURCES
Our
primary cash requirements stem from the payment of transfer fees for the acquisition of players’ registrations, capital expenditures
for the improvement of facilities at Old Trafford and the Carrington training ground (“Carrington”), payment of interest
on our borrowings, employee benefit expenses, other operating expenses and dividends on our Class A ordinary shares and Class B
ordinary shares. Historically, we have met these cash requirements through a combination of operating cash flow and proceeds from the
transfer fees from the sale of players’ registrations. Our existing borrowings primarily consist of our secured term loan facility,
our senior secured notes and outstanding drawdowns under our revolving facilities. We manage our cash flow interest rate risk where appropriate
using interest rate swaps. Such interest rate swaps have the economic effect of converting a portion of variable rate borrowings from
floating to fixed rates. We have US dollar borrowings that we use to hedge our US dollar commercial revenue exposure. We continue to
evaluate our financing options and may, from time to time, take advantage of opportunities to repurchase or refinance all or a portion
of our existing indebtedness to the extent such opportunities arise. As of 31 March 2024, we had cash resources of £67.0 million
and all funds are held as cash and cash equivalents and therefore available on demand. As of 31 March 2024, we also had access to
an undrawn revolving facility of £160 million. However, we cannot assure you that our cash generated from operations, cash and
cash equivalents or cash available under our revolving facilities will be sufficient to meet our long-term future needs. We cannot assure
you that we could obtain additional financing on favorable terms or at all, including as a result of changes or volatility in the credit
or capital markets, which affect our ability to borrow money or raise capital.
Our business ordinarily generates a significant
amount of cash from our Matchday revenues and commercial contractual arrangements at or near the beginning of our fiscal year, with a
steady flow of other cash received throughout the fiscal year. In addition, we ordinarily generate a significant amount of our cash through
advance receipts, including season tickets (which include general admission season tickets and seasonal hospitality tickets), most of
which are received prior to the end of June for the following season. Our Broadcasting revenue from the Premier League and UEFA
is paid periodically throughout the season, with primary payments made in late summer, December, January and the end of the football
season. Our sponsorship and other commercial revenue tends to be paid either quarterly or annually in advance. However, while we typically
have a high cash balance at the beginning of each fiscal year, this is largely attributable to deferred revenue, the majority of which
falls under current liabilities in the consolidated balance sheet, and this deferred revenue is amortized through the statement of profit
or loss over the course of the fiscal year. Over the course of a year, we use our cash on hand to pay employee benefit expenses, other
operating expenses, interest payments and other liabilities as they become due. This typically results in negative working capital movement
at certain times during the year. In the event it ever became necessary to access additional operating cash, we also have access to cash
through our revolving facilities. As of 31 March 2024, we had £140 million of outstanding loans under our revolving facilities
and access to undrawn revolving facilities of £160 million.
We
also maintain a mixture of long-term debt and capacity under our revolving facilities in order to ensure that we have sufficient
funds available for short-term working capital requirements and for investment in the playing squad and other capital projects.
Our cost base is more evenly spread throughout
the fiscal year than our cash inflows. Employee benefit expenses and fixed costs constitute the majority of our cash outflows and are
generally paid throughout the 12 months of the fiscal year.
In addition, transfer windows for acquiring and
disposing of registrations occur in January and the summer. During these periods, we may require additional cash to meet our acquisition
needs for new players and we may generate additional cash through the sale of existing registrations. Depending on the terms of the agreement,
transfer fees may be paid or received by us in multiple installments, resulting in deferred cash paid or received. Although we have not
historically drawn on our revolving facilities during the summer transfer window, if we seek to acquire players with values substantially
in excess of the values of players we seek to sell, we may be required to utilize cash available from our revolving facilities to meet
our cash needs.
Acquisition and disposal of registrations also
affects our trade receivables and payables, which affects our overall working capital. Our trade receivables include transfer fees receivable
from other football clubs, whereas our trade payables include transfer fees and other associated costs payable to other football clubs
in relation to the acquisition of registrations.
Cash Flow
The following table summarizes our cash flows
for the nine months ended 31 March 2024 and 2023:
| |
Nine
months ended 31 March
(in £ millions) | |
| |
2024 | | |
2023 | |
Cash flow from operating activities | |
| | | |
| | |
Cash (used in)/generated from operations | |
| (14.7 | ) | |
| 12.2 | |
Net interest paid | |
| (31.0 | ) | |
| (25.1 | ) |
Tax refunded/(paid) | |
| 5.5 | | |
| (0.6 | ) |
Net cash outflow from operating activities | |
| (40.2 | ) | |
| (13.5 | ) |
Cash flow from investing activities | |
| | | |
| | |
Payments for property, plant and equipment | |
| (14.9 | ) | |
| (9.8 | ) |
Payments for intangible assets | |
| (186.4 | ) | |
| (144.7 | ) |
Proceeds from sale of intangible assets | |
| 36.3 | | |
| 19.8 | |
Net cash outflow from investing activities | |
| (165.0 | ) | |
| (134.7 | ) |
Cash flow from financing activities | |
| | | |
| | |
Proceeds from issue of shares | |
| 158.5 | | |
| - | |
Proceeds from borrowings | |
| 160.0 | | |
| 100.0 | |
Repayment of borrowings | |
| (120.0 | ) | |
| - | |
Principal elements of lease payments | |
| (0.7 | ) | |
| (1.6 | ) |
Net cash inflow from financing activities | |
| 197.8 | | |
| 98.4 | |
Net decrease in cash and cash equivalents (1) | |
| (7.4 | ) | |
| (49.8 | ) |
(1) Excludes the effects of exchange rate movements on cash and cash equivalents.
Net cash outflow from operating activities
Cash (used in)/generated from operations represents
our operating results and net movements in our working capital. Our working capital is generally impacted by the timing of cash received
from the sale of tickets and hospitality and other Matchday revenues, broadcasting revenues from the Premier League and UEFA and sponsorship
and other commercial revenues. Cash used in operations for the nine months ended 31 March 2024 was £14.7 million, compared
to cash generated from operations of £12.2 million for the nine months ended 31 March 2023.
Additional
changes in net cash outflow from operating activities generally reflect our finance costs. We currently pay fixed rates of interest
on our senior secured notes and variable rates of interest on our secured term loan facility. We use interest rate swaps to manage the
cash flow interest rate risk. Such swaps have the economic effect of converting a portion of interest from variable rates to a fixed
rate. Drawdowns from our revolving facilities are also subject to variable rates of interest. Net cash outflow from operating activities
for the nine months ended 31 March 2024 was £40.2 million, compared to a net cash outflow of £13.5 million for
the nine months ended 31 March 2023.
Net cash outflow from investing activities
Capital expenditure for the acquisition of intangible
assets as well as for improvements to property, principally at Old Trafford and Carrington, are funded through cash flow generated from
operations, proceeds from the sale of intangible assets and, if necessary, from our revolving facilities. Capital expenditure on the
acquisition, disposal and trading of intangible assets tends to vary significantly from year to year depending on the requirements of
our men’s first team, overall availability of players, our assessment of their relative value and competitive demand for players
from other clubs. By contrast, capital expenditure on the purchase of property, plant and equipment tends to remain relatively stable
as we continue to make improvements at Old Trafford and Carrington.
Net cash outflow from investing activities for
the nine months ended 31 March 2024 was £165.0 million, an increase of £30.3 million from £134.7 million for the
nine months ended 31 March 2023.
For the nine months ended 31 March 2024,
net capital expenditure on property, plant and equipment was £14.9 million, an increase of £5.1 million from £9.8 million
for the nine months ended 31 March 2023.
For the nine months ended 31 March 2024,
net capital expenditure on intangible assets was £150.1 million, an increase of £25.2 million from £124.9 million
for the nine months ended 31 March 2023.
Net cash inflow from financing activities
Net
cash inflow from financing activities for the nine months ended 31 March 2024 was £197.8 million, compared to net cash
inflow of £98.4 million for the nine months ended 31 March 2023. This is due to a £40.0 million drawdown on the revolving
facilities in the current year compared to a £100.0 million drawdown on the revolving facilities in the prior year and proceeds
from the issue of shares to Trawlers Limited of £158.5 million.
Indebtedness
Our primary sources of indebtedness consist of
our senior secured notes, our secured term loan facility and our revolving facilities. As part of the security for our senior secured
notes, our secured term loan facility and our revolving facilities, substantially all of our assets are subject to liens and mortgages.
Description of principal indebtedness
Senior secured notes
Our wholly owned subsidiary, Manchester United
Football Club Limited, issued $425 million in aggregate principal amount of 3.79% senior secured notes. As of 31 March 2024, the
sterling equivalent of £334.7 million (net of unamortized issue costs of £1.7 million) was outstanding. The outstanding
principal amount was $425.0 million. The senior secured notes mature on 25 June 2027.
The
senior secured notes are guaranteed by Red Football Limited, Red Football Junior Limited, Manchester United Limited and MU Finance Limited
and secured against substantially all of the assets of those entities and Manchester United Football Club Limited. These entities
are wholly owned subsidiaries of Manchester United plc.
The
note purchase agreement governing the senior secured notes contains a financial maintenance covenant requiring us to maintain consolidated
profit for the period before depreciation, amortization of, and profit/(loss) on disposal of, intangible assets, exceptional items,
net finance costs, and tax (“EBITDA”) of not less than £65 million for each 12 month testing period. We are
able to claim certain dispensations from complying with the consolidated EBITDA floor up to twice (in non-consecutive financial years)
during the life of the senior secured notes if we fail to qualify for the first-round group stages (or its equivalent from time to time)
of the UEFA Champions League. The impact of IFRS 16 is excluded for the purpose of covenant compliance testing. The covenant is tested
on a quarterly basis and we were in compliance as at 31 March 2024.
The note purchase agreement governing the senior
secured notes contains events of default typical for securities of this type, as well as customary covenants and restrictions on the activities
of Red Football Limited and each of Red Football Limited’s subsidiaries, including, but not limited to, the incurrence of additional
indebtedness; dividends or distributions in respect of capital stock or certain other restricted payments or investments; entering into
agreements that restrict distributions from restricted subsidiaries; the sale or disposal of assets, including capital stock of restricted
subsidiaries; transactions with affiliates; the incurrence of liens; and mergers, consolidations or the sale of substantially all of Red
Football Limited’s assets. The covenants in the note purchase agreement governing the senior secured notes are subject to certain
thresholds and exceptions described in the note purchase agreement governing the senior secured notes.
The senior secured notes may be redeemed in part,
in an amount not less than 5% of the aggregate principal amount of the senior secured notes then outstanding, or in full, at any time
at 100% of the principal amount plus a “make-whole” premium of an amount equal to the discounted value (based on the US Treasury
rate) of the remaining interest payments due on the senior secured notes up to 25 June 2027.
Secured term loan facility
Our
wholly-owned subsidiary, Manchester United Football Club Limited, has a secured term loan facility with Bank of America Merrill Lynch
International Designated Activity Company as lender. As of 31 March 2024, the sterling equivalent of £176.6 million (net
of unamortized issue costs of £1.5 million) was outstanding. The outstanding principal amount was $225.0 million. The remaining
balance of the secured term loan facility is repayable on 6 August 2029, although the Group has the option to repay the secured term
loan facility at any time before then.
Loans under the secured term loan facility bear
interest at a rate per annum equal to the Secured Overnight Financing Rate (SOFR) plus the applicable margin. The applicable margin, if
no event of default has occurred and is continuing, means the following:
Total net leverage ratio (as defined in the secured term loan facility agreement) |
|
Margin %
(per annum) |
|
Greater than 3.5 |
|
|
1.75 |
|
Greater than 2.0 but less than or equal to 3.5 |
|
|
1.50 |
|
Less than or equal to 2.0 |
|
|
1.25 |
|
While any event of default is continuing, the
applicable margin shall be the highest level set forth above.
Our secured term loan facility is guaranteed by
Red Football Limited, Red Football Junior Limited, Manchester United Limited, MU Finance Limited and Manchester United Football Club Limited
and secured against substantially all of the assets of those entities. These entities are wholly owned subsidiaries of Manchester United
plc.
The
secured term loan facility contains a financial maintenance covenant requiring us to maintain consolidated profit for the period before
depreciation, amortization of, and profit/(loss) on disposal of, intangible assets, exceptional items, net finance costs, and tax (“EBITDA”)
of not less than £65 million for each 12 month testing period. We are able to claim certain dispensations from complying
with the consolidated EBITDA floor up to twice (in non-consecutive financial years) during the life of the secured term loan facility
if we fail to qualify for the first round group stages (or its equivalent from time to time) of the UEFA Champions League. The impact
of IFRS 16 is excluded for the purpose of covenant compliance testing. The covenant is tested on a quarterly basis and we were in compliance
as at 31 March 2024.
The secured term loan facility contains events
of default typical in facilities of this type, as well as typical covenants including restrictions on incurring additional indebtedness,
paying dividends or making other distributions or repurchasing or redeeming our stock, selling assets, including capital stock of restricted
subsidiaries, entering into agreements restricting our subsidiaries’ ability to pay dividends, consolidating, merging, selling or
otherwise disposing of all or substantially all of our assets, entering into sale and leaseback transactions, entering into transactions
with our affiliates and incurring liens. Certain events of default and covenants in the secured term loan facility are subject to certain
thresholds and exceptions described in the agreement governing the secured term loan facility.
Revolving facilities
Our
revolving facilities agreement originally dated 22 May 2015 (as amended on 7 October 2015, amended and restated on 4 April 2019,
4 March 2021 and 10 December 2021) (the “initial revolving facility”) allows Manchester United Football Club Limited
(or any direct or indirect subsidiary of Red Football Limited that becomes a borrower thereunder) to borrow up to £150 million
from a syndicate of lenders with Bank of America Europe Designated Activity Company as agent and security trustee. As of 31 March 2024,
we had £100 million in outstanding loans and £50 million in borrowing capacity under our revolving facilities agreement.
The
revolving facilities agreement contains a financial maintenance covenant consistent with the note purchase agreement and secured term
loan- facility. The initial revolving facility is scheduled to expire on 4 April 2025. Any amount still outstanding at that
time will be due in full immediately on the applicable expiry date.
Our
revolving facility agreement originally dated 14 October 2020 (as amended and restated on 4 March 2021, 13 December 2021
and 26 April 2022) (the “new revolving facility”) allows Manchester United Football Club Limited (or any direct or indirect
subsidiary of Red Football Limited that becomes a borrower thereunder) to borrow up to £75 million from Santander UK plc as original
lender and with Santander UK plc as agent and with Bank of America Europe Designated Activity Company as security trustee. The general
covenants under the new revolving facility are consistent with the initial revolving facility. As of 31 March 2024, we had £30
million in outstanding loans and £45 million in borrowing capacity under our revolving facility agreement. The new revolving
facility has a maturity date of 25 June 2027.
On
26 April 2022 we entered into a new bilateral revolving facility agreement (the “bilateral revolving facility”)
which allows Manchester United Football Club Limited (or any direct or indirect subsidiary of Red Football Limited that becomes a borrower
thereunder) to borrow up to £75 million from Bank of America, N.A., London Branch as original lender and with Bank of America Europe
Designated Activity Company as agent and security trustee. The general covenants under the bilateral revolving facility agreement are
consistent with the initial revolving facilities agreement. As of 31 March 2024, we had £10 million in outstanding loans and
£65 million in borrowing capacity under our revolving facility agreement.
Overall, as of 31 March 2024, we had £140
million in outstanding loans and £160 million in borrowing capacity under our revolving facilities.
Our
revolving facilities are guaranteed by Red Football Limited, Red Football Junior Limited, Manchester United Limited, MU Finance Limited
and Manchester United Football Club Limited and secured against substantially all of the assets of those entities. These entities
are wholly owned subsidiaries of Manchester United plc.
RESEARCH AND DEVELOPMENT, PATENTS AND LICENSES, ETC.
We do not currently have any research and development
policies in place.
OFF BALANCE SHEET ARRANGEMENTS
Transfer fees payable
Under
the terms of certain contracts with other football clubs in respect of player transfers, additional amounts would be payable by us if
certain specific performance conditions are met. We estimate the fair value of any contingent consideration at the date of acquisition
based on the probability of conditions being met and monitor this on an ongoing basis. The maximum additional amount that could be payable
as of 31 March 2024 is £153.6 million (30 June 2023: £133.1 million; 30 March 2023: £145.4
million).
Transfer fees receivable
Similarly,
under the terms of contracts with other football clubs for player transfers, additional amounts would be payable to us if certain specific
performance conditions are met. In accordance with the recognition criteria for contingent assets, such amounts are only disclosed by
the Company when probable and recognized when virtually certain. As of 31 March 2024, we believe receipt of £nil to be probable
(30 June 2023: £nil; 30 March 2023: £nil).
Other commitments
In the ordinary course of business, we enter into
capital commitments. These transactions are recognized in the consolidated financial statements in accordance with International Financial
Reporting Standards (“IFRS”), as issued by the International Accounting Standards Board (“IASB”), and are more
fully disclosed therein.
As of 31 March 2024, we had not entered into
any other off-balance sheet transactions.
Manchester United plc
Interim consolidated statement of
profit or loss - unaudited
| |
| | |
Three months ended 31 March | | |
Nine months ended 31 March | |
| |
Note | | |
2024 £’000 | | |
2023 £’000 | | |
2024 £’000 | | |
2023 £’000 | |
Revenue from contracts with customers | |
| 6 | | |
| 136,693 | | |
| 170,048 | | |
| 519,545 | | |
| 481,070 | |
Operating expenses | |
| 7 | | |
| (203,732 | ) | |
| (176,675 | ) | |
| (587,155 | ) | |
| (507,959 | ) |
Profit on disposal of intangible assets | |
| 9 | | |
| 790 | | |
| 1,949 | | |
| 30,670 | | |
| 15,969 | |
Operating loss | |
| | | |
| (66,249 | ) | |
| (4,678 | ) | |
| (36,940 | ) | |
| (10,920 | ) |
Finance costs | |
| | | |
| (18,377 | ) | |
| (14,657 | ) | |
| (53,720 | ) | |
| (30,777 | ) |
Finance income | |
| | | |
| 1,057 | | |
| 13,656 | | |
| 1,506 | | |
| 10,903 | |
Net finance costs | |
| 10 | | |
| (17,320 | ) | |
| (1,001 | ) | |
| (52,214 | ) | |
| (19,874 | ) |
Loss before income tax | |
| | | |
| (83,569 | ) | |
| (5,679 | ) | |
| (89,154 | ) | |
| (30,794 | ) |
Income tax credit | |
| 11 | | |
| 12,069 | | |
| 132 | | |
| 12,271 | | |
| 5,037 | |
Loss for the period | |
| | | |
| (71,500 | ) | |
| (5,547 | ) | |
| (76,883 | ) | |
| (25,757 | ) |
| |
| | | |
| | | |
| | | |
| | | |
| | |
Loss per share during the period: | |
| | | |
| | | |
| | | |
| | | |
| | |
Basic loss per share (pence) | |
| 12 | | |
| (43.12 | ) | |
| (3.40 | ) | |
| (46.87 | ) | |
| (15.80 | ) |
Diluted loss per share (pence)(1) | |
| 12 | | |
| (43.12 | ) | |
| (3.40 | ) | |
| (46.87 | ) | |
| (15.80 | ) |
(1) For
the three and nine months ended 31 March 2024 and the three and nine months ended 31 March 2023, 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.
See accompanying notes to the interim consolidated financial statements.
Manchester United plc
Interim consolidated statement of
comprehensive loss - unaudited
| |
Three months ended 31 March | | |
Nine months ended 31 March | |
| |
2024 £’000 | | |
2023 £’000 | | |
2024 £’000 | | |
2023 £’000 | |
Loss for the period | |
| (71,500 | ) | |
| (5,547 | ) | |
| (76,883 | ) | |
| (25,757 | ) |
Other comprehensive loss: | |
| | | |
| | | |
| | | |
| | |
Items that may be subsequently reclassified to profit or loss | |
| | | |
| | | |
| | | |
| | |
Movement on hedges | |
| (378 | ) | |
| (323 | ) | |
| (5,747 | ) | |
| 1,395 | |
Income tax credit/(expense) relating to movements on hedges | |
| 95 | | |
| 67 | | |
| 1,437 | | |
| (352 | ) |
Other comprehensive (loss)/income for the period, net of income tax | |
| (283 | ) | |
| (256 | ) | |
| (4,310 | ) | |
| 1,043 | |
Total comprehensive loss for the period | |
| (71,783 | ) | |
| (5,803 | ) | |
| (81,193 | ) | |
| (24,714 | ) |
See accompanying notes to the interim consolidated financial statements.
Manchester United plc
Interim consolidated balance sheet
- unaudited
|
|
|
|
As of |
|
|
|
Note |
|
31 March
2024
£’000 |
|
30 June 2023 £’000 |
|
31 March 2023 £’000 |
|
ASSETS |
|
|
|
|
|
|
|
|
|
Non-current assets |
|
|
|
|
|
|
|
|
|
|
|
|
Property, plant and equipment |
|
14 |
|
|
254,908 |
|
|
253,282 |
|
|
242,730 |
|
Right-of-use assets |
|
15 |
|
|
7,913 |
|
|
8,760 |
|
|
2,952 |
|
Investment property |
|
16 |
|
|
19,783 |
|
|
19,993 |
|
|
20,063 |
|
Intangible assets |
|
17 |
|
|
877,283 |
|
|
812,382 |
|
|
843,307 |
|
Deferred tax assets |
|
18 |
|
|
11,010 |
|
|
- |
|
|
- |
|
Trade receivables |
|
20 |
|
|
24,694 |
|
|
22,303 |
|
|
21,485 |
|
Derivative financial instruments |
|
21 |
|
|
667 |
|
|
7,492 |
|
|
15,102 |
|
|
|
|
|
|
1,196,258 |
|
|
1,124,212 |
|
|
1,145,639 |
|
Current assets |
|
|
|
|
|
|
|
|
|
|
|
|
Inventories |
|
19 |
|
|
3,757 |
|
|
3,165 |
|
|
2,645 |
|
Prepayments |
|
|
|
|
17,235 |
|
|
16,487 |
|
|
16,595 |
|
Contract assets – accrued revenue |
|
6.2 |
|
|
53,887 |
|
|
43,332 |
|
|
62,873 |
|
Trade receivables |
|
20 |
|
|
37,673 |
|
|
31,167 |
|
|
60,321 |
|
Other receivables |
|
|
|
|
1,835 |
|
|
9,928 |
|
|
2,031 |
|
Income tax receivable |
|
|
|
|
- |
|
|
5,317 |
|
|
4,410 |
|
Derivative financial instruments |
|
21 |
|
|
1,539 |
|
|
8,317 |
|
|
5,894 |
|
Cash and cash equivalents |
|
22 |
|
|
66,994 |
|
|
76,019 |
|
|
73,733 |
|
|
|
|
|
|
182,920 |
|
|
193,732 |
|
|
228,502 |
|
Total assets |
|
|
|
|
1,379,178 |
|
|
1,317,944 |
|
|
1,374,141 |
|
See accompanying notes to the interim consolidated financial statements.
Manchester United plc
Interim consolidated balance sheet (continued) - unaudited
| |
| | |
As of | |
| |
Note | | |
31 March 2024 £’000 | | |
30 June 2023 £’000 | | |
31 March 2023 £’000 | |
EQUITY AND LIABILITIES | |
| | | |
| | | |
| | | |
| | |
Equity | |
| | | |
| | | |
| | | |
| | |
Share capital | |
| 23 | | |
| 55 | | |
| 53 | | |
| 53 | |
Share premium | |
| | | |
| 227,361 | | |
| 68,822 | | |
| 68,822 | |
Treasury shares | |
| 24 | | |
| (21,305 | ) | |
| (21,305 | ) | |
| (21,305 | ) |
Merger reserve | |
| | | |
| 249,030 | | |
| 249,030 | | |
| 249,030 | |
Hedging reserve | |
| | | |
| (308 | ) | |
| 4,002 | | |
| 1,993 | |
Accumulated losses | |
| | | |
| (271,628 | ) | |
| (196,652 | ) | |
| (194,085 | ) |
Total equity | |
| | | |
| 183,205 | | |
| 103,950 | | |
| 104,508 | |
Non-current liabilities | |
| | | |
| | | |
| | | |
| | |
Deferred tax liabilities | |
| 18 | | |
| - | | |
| 3,304 | | |
| 1,939 | |
Contract liabilities – deferred revenue | |
| 6.2 | | |
| 6,834 | | |
| 6,659 | | |
| 3,842 | |
Trade and other payables | |
| 25 | | |
| 188,581 | | |
| 161,141 | | |
| 155,903 | |
Borrowings | |
| 26 | | |
| 511,296 | | |
| 507,335 | | |
| 521,482 | |
Lease liabilities | |
| 15 | | |
| 7,603 | | |
| 7,844 | | |
| 2,367 | |
Derivative financial instruments | |
| 21 | | |
| 3,648 | | |
| 748 | | |
| 1,303 | |
Provisions | |
| 27 | | |
| - | | |
| 93 | | |
| 91 | |
| |
| | | |
| 717,962 | | |
| 687,124 | | |
| 686,927 | |
Current liabilities | |
| | | |
| | | |
| | | |
| | |
Contract liabilities – deferred revenue | |
| 6.2 | | |
| 102,643 | | |
| 169,624 | | |
| 130,081 | |
Trade and other payables | |
| 25 | | |
| 218,042 | | |
| 236,472 | | |
| 235,508 | |
Income tax liabilities | |
| | | |
| 851 | | |
| - | | |
| - | |
Borrowings | |
| 26 | | |
| 142,960 | | |
| 105,961 | | |
| 203,665 | |
Lease liabilities | |
| 15 | | |
| 730 | | |
| 1,036 | | |
| 792 | |
Derivative financial instruments | |
| 21 | | |
| 1,830 | | |
| 931 | | |
| 48 | |
Provisions | |
| 27 | | |
| 10,955 | | |
| 12,846 | | |
| 12,612 | |
| |
| | | |
| 478,011 | | |
| 526,870 | | |
| 582,706 | |
Total equity and liabilities | |
| | | |
| 1,379,178 | | |
| 1,317,944 | | |
| 1,374,141 | |
See accompanying notes to the interim consolidated financial statements.
Manchester United plc
Interim consolidated statement of
changes in equity - unaudited
|
|
Share
capital
£’000 |
|
|
Share
premium
£’000 |
|
|
Treasury
shares
£’000 |
|
|
Merger
reserve
£’000 |
|
|
Hedging
reserve
£’000 |
|
|
Accumulated
losses
£’000 |
|
|
Total
equity
£’000 |
|
Balance at 1 July 2022 |
|
|
53 |
|
|
|
68,822 |
|
|
|
(21,305 |
) |
|
|
249,030 |
|
|
|
950 |
|
|
|
(170,042 |
) |
|
|
127,508 |
|
Loss for the period |
|
|
- |
|
|
|
- |
|
|
|
- |
|
|
|
- |
|
|
|
- |
|
|
|
(25,757 |
) |
|
|
(25,757 |
) |
Cash flow hedges |
|
|
- |
|
|
|
- |
|
|
|
- |
|
|
|
- |
|
|
|
1,395 |
|
|
|
- |
|
|
|
1,395 |
|
Tax expense relating to movement on hedges |
|
|
- |
|
|
|
- |
|
|
|
- |
|
|
|
- |
|
|
|
(352 |
) |
|
|
- |
|
|
|
(352 |
) |
Total comprehensive income/(loss) for the period |
|
|
- |
|
|
|
- |
|
|
|
- |
|
|
|
- |
|
|
|
1,043 |
|
|
|
(25,757 |
) |
|
|
(24,714 |
) |
Equity-settled share-based payments |
|
|
- |
|
|
|
- |
|
|
|
- |
|
|
|
- |
|
|
|
- |
|
|
|
1,714 |
|
|
|
1,714 |
|
Balance at 31 March 2023 |
|
|
53 |
|
|
|
68,822 |
|
|
|
(21,305 |
) |
|
|
249,030 |
|
|
|
1,993 |
|
|
|
(194,085 |
) |
|
|
104,508 |
|
Loss for the period |
|
|
- |
|
|
|
- |
|
|
|
- |
|
|
|
- |
|
|
|
- |
|
|
|
(2,921 |
) |
|
|
(2,921 |
) |
Cash flow hedges |
|
|
- |
|
|
|
- |
|
|
|
- |
|
|
|
- |
|
|
|
2,675 |
|
|
|
- |
|
|
|
2,675 |
|
Tax expense relating to movement on hedges |
|
|
- |
|
|
|
- |
|
|
|
- |
|
|
|
- |
|
|
|
(666 |
) |
|
|
- |
|
|
|
(666 |
) |
Total comprehensive income/(loss) for the period |
|
|
- |
|
|
|
- |
|
|
|
- |
|
|
|
- |
|
|
|
2,009 |
|
|
|
(2,921 |
) |
|
|
(912 |
) |
Equity-settled share-based payments |
|
|
- |
|
|
|
- |
|
|
|
- |
|
|
|
- |
|
|
|
- |
|
|
|
39 |
|
|
|
39 |
|
Deferred tax credit relating to share-based payments |
|
|
- |
|
|
|
- |
|
|
|
- |
|
|
|
- |
|
|
|
- |
|
|
|
315 |
|
|
|
315 |
|
Balance at 30 June 2023 |
|
|
53 |
|
|
|
68,822 |
|
|
|
(21,305 |
) |
|
|
249,030 |
|
|
|
4,002 |
|
|
|
(196,652 |
) |
|
|
103,950 |
|
Loss for the period |
|
|
- |
|
|
|
- |
|
|
|
- |
|
|
|
- |
|
|
|
- |
|
|
|
(76,883 |
) |
|
|
(76,883 |
) |
Cash flow hedges |
|
|
- |
|
|
|
- |
|
|
|
- |
|
|
|
- |
|
|
|
(5,747 |
) |
|
|
- |
|
|
|
(5,747 |
) |
Tax credit relating to movement on hedges |
|
|
- |
|
|
|
- |
|
|
|
- |
|
|
|
- |
|
|
|
1,437 |
|
|
|
- |
|
|
|
1,437 |
|
Total comprehensive (loss)/income for the period |
|
|
- |
|
|
|
- |
|
|
|
- |
|
|
|
- |
|
|
|
(4,310 |
) |
|
|
(76,883 |
) |
|
|
(81,193 |
) |
Proceeds from issue of shares |
|
|
2 |
|
|
|
158,539 |
|
|
|
- |
|
|
|
- |
|
|
|
- |
|
|
|
- |
|
|
|
158,541 |
|
Equity-settled share-based payments |
|
|
- |
|
|
|
- |
|
|
|
- |
|
|
|
- |
|
|
|
- |
|
|
|
1,907 |
|
|
|
1,907 |
|
Balance at 31 March 2024 |
|
|
55 |
|
|
|
227,361 |
|
|
|
(21,305 |
) |
|
|
249,030 |
|
|
|
(308 |
) |
|
|
(271,628 |
) |
|
|
183,205 |
|
See accompanying notes to the interim consolidated financial statements.
Manchester United plc
Interim consolidated statement of
cash flows - unaudited
|
|
|
|
|
Three months ended
31 March |
|
|
Nine months ended
31 March |
|
|
|
Note |
|
|
2024
£’000 |
|
|
2023 £’000 |
|
|
2024
£’000 |
|
|
2023 £’000 |
|
Cash flow from operating activities |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cash (used in)/generated from operations |
|
|
28 |
|
|
|
(2,584 |
) |
|
|
65,208 |
|
|
|
(14,725 |
) |
|
|
12,194 |
|
Interest paid |
|
|
|
|
|
|
(13,082 |
) |
|
|
(11,054 |
) |
|
|
(31,838 |
) |
|
|
(25,277 |
) |
Interest received |
|
|
|
|
|
|
281 |
|
|
|
130 |
|
|
|
853 |
|
|
|
207 |
|
Tax refunded/(paid) |
|
|
|
|
|
|
268 |
|
|
|
(220 |
) |
|
|
5,524 |
|
|
|
(612 |
) |
Net cash (outflow)/inflow from operating activities |
|
|
|
|
|
|
(15,117 |
) |
|
|
54,064 |
|
|
|
(40,186 |
) |
|
|
(13,488 |
) |
Cash flow from investing activities |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Payments for property, plant and equipment |
|
|
|
|
|
|
(3,109 |
) |
|
|
(2,717 |
) |
|
|
(14,949 |
) |
|
|
(9,816 |
) |
Payments for intangible assets(1) |
|
|
|
|
|
|
(18,453 |
) |
|
|
(14,824 |
) |
|
|
(186,395 |
) |
|
|
(144,716 |
) |
Proceeds from sale of intangible assets(1) |
|
|
|
|
|
|
2,684 |
|
|
|
6,098 |
|
|
|
36,266 |
|
|
|
19,831 |
|
Net cash outflow from investing activities |
|
|
|
|
|
|
(18,878 |
) |
|
|
(11,443 |
) |
|
|
(165,078 |
) |
|
|
(134,701 |
) |
Cash flow from financing activities |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Proceeds from issue of shares |
|
|
|
|
|
|
158,542 |
|
|
|
- |
|
|
|
158,542 |
|
|
|
- |
|
Proceeds from borrowings |
|
|
|
|
|
|
- |
|
|
|
- |
|
|
|
160,000 |
|
|
|
100,000 |
|
Repayment of borrowings |
|
|
|
|
|
|
(120,000 |
) |
|
|
- |
|
|
|
(120,000 |
) |
|
|
- |
|
Principal elements of lease payments |
|
|
|
|
|
|
(180 |
) |
|
|
(153 |
) |
|
|
(680 |
) |
|
|
(1,602 |
) |
Net cash inflow/(outflow) from financing activities |
|
|
|
|
|
|
38,362 |
|
|
|
(153 |
) |
|
|
197,862 |
|
|
|
98,398 |
|
Effects of exchange rate movements on cash and cash equivalents |
|
|
|
|
|
|
(182 |
) |
|
|
220 |
|
|
|
(1,623 |
) |
|
|
2,301 |
|
Net increase/(decrease) in cash and cash equivalents |
|
|
|
|
|
|
4,185 |
|
|
|
42,688 |
|
|
|
(9,025 |
) |
|
|
(47,490 |
) |
Cash and cash equivalents at beginning of period |
|
|
|
|
|
|
62,809 |
|
|
|
31,045 |
|
|
|
76,019 |
|
|
|
121,223 |
|
Cash and cash equivalents at end of period |
|
|
22 |
|
|
|
66,994 |
|
|
|
73,733 |
|
|
|
66,994 |
|
|
|
73,733 |
|
(1) Payments
and proceeds for intangible assets primarily relate to player and key football management staff registrations. When acquiring or selling
players’ and key football management staff registrations it is normal industry practice for payment terms to spread over more than
one year. Details of registrations additions and disposals are provided in Note 17. Trade payables in relation to the acquisition of registrations
at reporting date are provided in Note 25. Trade receivables in relation to the disposal of registrations at the reporting date are provided
in Note 20.
See accompanying notes to the interim consolidated financial statements.
Manchester United plc
Notes to the interim consolidated
financial statements (continued) - unaudited
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. The Company’s shares
are listed on the New York Stock Exchange under the symbol “MANU”.
These financial statements are presented in pounds
sterling and all values are rounded to the nearest thousand (£’000) except when otherwise indicated.
These interim consolidated financial statements
were approved for issue by the board of directors on 11 July 2024.
2 Basis
of preparation
The interim consolidated financial statements
of Manchester United plc have been prepared on a going concern basis and in accordance with International Accounting Standard 34 “Interim
Financial Reporting”. The interim consolidated financial statements should be read in conjunction with the audited consolidated
financial statements and notes thereto for the year ended 30 June 2023, as filed with the Securities and Exchange Commission on 27
October 2023, contained within the Company’s Annual Report on Form 20-F, which were prepared in accordance with International
Financial Reporting Standards (“IFRS”) as issued by the International Accounting Standards Board (“IASB”). The
report of the auditors on those financial statements was unqualified and did not contain an emphasis of matter paragraph. The results
of operations for the interim periods should not be considered indicative of results to be expected for the full fiscal year.
Going concern
The Group has cash resources as of 31 March 2024
of £67.0 million, with all funds held as cash and cash equivalents and therefore available on demand. As of 31 March 2024,
the Group also has access to undrawn revolving facilities of £160 million.
The Group’s debt facilities include the
$425 million senior secured notes and the $225 million secured term loan facility, the majority of which attract fixed interest rates.
As of 31 March 2024, the Group also has £140 million of outstanding loans under our revolving facilities. The Group’s
secured notes and term loan mature in 2027 and 2029 respectively. Of the Group’s total available revolving facilities of £300
million, £150 million expires in 2025 and £150 million expires in 2027. As of 31 March 2024, the Group was in compliance
with all debt covenants.
During the period, the Group received cash proceeds
of $200 million related to the minority investment by Sir Jim Ratcliffe. A further $100 million is to be received by 31 December 2024.
As a result of a detailed assessment, including
prudent assumptions around the men’s first team’s performance, and with reference to the Group’s balance sheet, existing
committed facilities, but also acknowledging the inherent uncertainty of the current economic outlook, Management has concluded that the
Group is able to meet its obligations when they fall due for a period of at least 12 months after the issuance of this report. For
this reason, the Group continues to adopt the going concern basis for preparing the unaudited interim consolidated financial statements.
Manchester United plc
Notes to the interim consolidated
financial statements (continued) - unaudited
3 Accounting
policies
The accounting policies adopted are consistent with those of the consolidated
financial statements for the year ended 30 June 2023, except as described below.
Taxes on income in the interim periods are accrued
using the tax rate that would be applicable to expected total annual earnings.
New and amended standards and interpretations
adopted by the Group
The following amendment to standards has been adopted by the
Group for the first time for the year ended 30 June 2024:
| · | Deferred Tax Related to Assets and Liabilities Arising from a Single Transaction (Amendments to IAS 1) |
The adoption of this amendment has not had a material
effect on the Group’s financial statements.
New and amended standards and interpretations
issued but not yet adopted
The following amendment to IFRS that has been issued by the IASB will
become effective in a subsequent accounting period:
| · | Classification of Liabilities as Current or Non-current (Amendments to IAS 1) |
| · | Presentation and Disclosure in Financial Statements (IFRS 18) |
This change is not expected to have a material
effect on the Group’s financial statements.
4 Critical
estimates and judgments
The preparation of interim financial statements requires management
to make judgments, estimates and assumptions that affect the application of accounting policies and the reported amounts of assets and
liabilities, income and expense. Actual results may differ from these estimates. The areas involving a higher degree of judgment or complexity,
or areas where assumptions and estimates are significant to the interim consolidated financial statements are considered to be:
| · | Estimate of minimum guarantee revenue recognition – see Note 5 |
| · | Estimate of fair value of registrations – see Note 17 |
| · | Recognition of deferred tax assets – see Note 18 |
| · | Recognition of tax related provisions – see Note 27 |
Management does not consider there to be any significant
judgements in the preparation of the financial statements.
In preparing these interim consolidated financial
statements, the key sources of estimation uncertainty were the same as those that applied to the consolidated financial statements for
the year ended 30 June 2023.
Manchester United plc
Notes to the interim consolidated
financial statements (continued) - unaudited
5 Seasonality
of revenue
We experience seasonality in our revenue and cash flow, limiting the
overall comparability of interim financial periods. In any given interim period, our total revenue can vary based on the number of games
played in that period, which affects the amount of Matchday and Broadcasting revenue recognized. This was particularly evident in the
2022/23 season, in which the Premier League Season paused for six weeks in November 2022 for the FIFA World Cup to take place. Similarly,
certain of our costs are derived from hosting games at Old Trafford, and these costs will also vary based on the number of games played
in the period. We historically recognize the most revenue in our second and third fiscal quarters due to the scheduling of matches. However,
a strong performance by our first team in European competitions and domestic cups could result in significant additional Matchday and
Broadcasting revenue, and consequently we may also recognize the most revenue in our fourth fiscal quarter in those years.
Commercial
revenue (whether settled in cash or value in kind) comprises revenue receivable from the exploitation of the Manchester United brand
through sponsorship and other commercial agreements, including minimum guaranteed revenue, revenue receivable from retailing Manchester
United branded merchandise in the UK and licensing the manufacture, distribution and sale of such goods globally, and fees for the Manchester
United men’s first team undertaking tours. Revenue is recognized over the term of the sponsorship agreement in line with the performance
obligations included within the contract and based on the sponsorship rights enjoyed by the individual sponsor. In instances where the
sponsorship rights remain the same over the duration of the contract, revenue is recognized as performance obligations are satisfied
evenly over time (i.e. on a straight-line basis). Retail revenue is recognized when control of the products has transferred, being at
the point of sale to the customer. License revenue in respect of right to access licences is recognized in line with the performance
obligations included within the contract, in instances where these remain the same over the duration of the contract, revenue is recognized
evenly on a time elapsed (i.e. straight-line) basis. Sales-based royalty revenue is recognized only when the subsequent sale is made.
Significant estimates
A
number of sponsorship contracts contain significant estimates in relation to the allocation and recognition of revenue in line with performance
obligations. Minimum guaranteed revenue is recognized over the term of the sponsorship agreement in line with the performance
obligations included within the contract and based on the sponsorship benefits enjoyed by the individual sponsor. In instances where
the sponsorship rights remain the same over the duration of the contract, revenue is recognized as performance obligations are satisfied
evenly over time (i.e. on a straight-line basis).
On 21 July 2023, the Group signed a 10-year
extension to its agreement with adidas which began on 1 August 2015 and now terminates on 30 June 2035. The minimum guarantee
payable over the term of this extended agreement is £750 million per the original term and an additional £900 million due
under the extension, resulting in a total of £1,650 million, subject to certain adjustments. Payments due in a particular year may
increase if the club’s men’s or women’s first teams win the Premier League or Women’s Super League respectively,
FA Cup or continental competitions with the maximum possible increase being £4.4 million per annum. Payments may decrease if the
men’s first team fails to participate in the UEFA Champions League. Under the original term, if the men’s first team did not
participate in the UEFA Champions League for two or more consecutive seasons, a deduction of 30% was made in the second or other consecutive
year of non-participation. As a result of the men’s first team qualifying for the 2023/24 Champions League, no deductions are due
under the original term and there is no critical accounting estimate in relation to the original term. Under the extended term, this clause
has been amended to state that a £10 million deduction will be applied for each year of non-participation in the UEFA Champions
League, commencing from the 2025/26 season and a critical accounting estimate exists in estimating the value of any such deductions over
the life of the contract.
Manchester United plc
Notes to the interim consolidated
financial statements (continued) - unaudited
5 Seasonality
of revenue (continued)
i) Commercial
(continued)
The total revenue of this contract including the estimated deduction
in respect of the Champions League clause is recognized evenly over the life of contract and the impact of changing the estimated deduction
by one year on revenue recognized in any one financial year is £0.8 million.
Broadcasting
revenue represents revenue receivable from all UK and overseas broadcasting contracts, including contracts negotiated centrally by the
Premier League and UEFA. Distributions from the Premier League comprise a fixed element (which is recognized evenly as each performance
obligation is satisfied i.e. as each Premier League match is played), facility fees for live coverage and highlights of domestic home
and away matches (which are recognized when the respective performance obligation is satisfied i.e. the respective match is played),
and merit awards (which, being variable consideration, are recognized when each performance obligation is satisfied i.e. as each Premier
League match is played, based on management’s estimate of where the men’s first team will finish at the end of the football
season i.e. the most likely outcome and to the extent that it is deemed highly probably that no revenue recognized will be reversed).
Distributions from UEFA relating to participation in European competitions comprise market pool payments (which are recognized over the
matches played in the competition, a portion of which reflects Manchester United’s performance relative to the other Premier League
clubs in the competition), fixed amounts for participation in individual matches (which are recognized when the matches are played) and
an individual club coefficient share (which is recognized over the group stage matches).
Matchday revenue is recognized based on matches played throughout
the year with revenue from each match (including season ticket allocated amounts) only being recognized when the performance obligation
is satisfied i.e. the match has been played. Revenue from related activities such as Conference and Events or the Museum is recognized
as the event or service is provided or the facility is used. Matchday revenue includes revenue receivable from all domestic and European
match day activities from Manchester United games at Old Trafford, together with the Group’s share of gate receipts from domestic
cup matches not played at Old Trafford, and fees for arranging other events at the Old Trafford stadium. As the Group acts as the principal
in the sale of match tickets, the share of gate receipts payable to the other participating club and competition organizer for domestic
cup matches played at Old Trafford is treated as an operating expense.
Manchester United plc
Notes to the interim consolidated
financial statements (continued) - unaudited
6 Revenue
from contracts with customers
6.1 | Disaggregation of revenue from contracts with customers |
The principal activity of the Group is the operation of men’s
and women’s professional football clubs. All of the activities of the Group support the operation of the football clubs and the
success of the men’s first team in particular is critical to the on-going development of the Group. Consequently, the chief operating
decision maker (being the Board and executive officers of Manchester United plc) regards the Group as operating in one material segment,
being the operation of professional football clubs.
All revenue derives from the Group’s principal activity in the
United Kingdom. Revenue can be analysed into its three main components as follows:
| |
Three months ended 31 March | | |
Nine months ended 31 March | |
| |
2024 £’000 | | |
2023 £’000 | | |
2024 £’000 | | |
2023 £’000 | |
Sponsorship | |
| 40,697 | | |
| 40,966 | | |
| 136,019 | | |
| 149,200 | |
Retail, merchandising, apparel & product licensing | |
| 28,879 | | |
| 28,425 | | |
| 95,700 | | |
| 86,268 | |
Commercial | |
| 69,576 | | |
| 69,391 | | |
| 231,719 | | |
| 235,468 | |
Domestic competitions | |
| 36,230 | | |
| 44,383 | | |
| 125,908 | | |
| 116,409 | |
European competitions | |
| (209 | ) | |
| 5,064 | | |
| 52,483 | | |
| 23,646 | |
Other | |
| 1,522 | | |
| 1,306 | | |
| 4,939 | | |
| 4,490 | |
Broadcasting | |
| 37,543 | | |
| 50,753 | | |
| 183,330 | | |
| 144,545 | |
Matchday | |
| 29,574 | | |
| 49,904 | | |
| 104,496 | | |
| 101,057 | |
| |
| 136,693 | | |
| 170,048 | | |
| 519,545 | | |
| 481,070 | |
6.2 | Assets and liabilities related to contracts with customers |
Details of movements on assets related to contracts with customers
are as follows:
| |
Current contract assets – accrued revenue £’000 | |
At 1 July 2022 | |
| 36,239 | |
Recognized in revenue during the period | |
| 73,334 | |
Cash received/amounts invoiced during the period | |
| (46,700 | ) |
At 31 March 2023 | |
| 62,873 | |
Recognized in revenue during the period | |
| 66,318 | |
Cash received/amounts invoiced during the period | |
| (85,860 | ) |
At 30 June 2023 | |
| 43,332 | |
Recognized in revenue during the period | |
| 132,529 | |
Cash received/amounts invoiced during the period | |
| (121,974 | ) |
At 31 March 2024 | |
| 53,887 | |
Manchester United plc
Notes to the interim consolidated
financial statements (continued) - unaudited
6 Revenue
from contracts with customers (continued)
6.2 | Assets and liabilities related to contracts with customers (continued) |
A contract asset (accrued revenue) is recognized if Commercial, Broadcasting
or Matchday revenue performance obligations are satisfied prior to unconditional consideration being due under the contract.
Details of movements on liabilities related to contracts with customers
are as follows:
| |
Current contract liabilities – deferred revenue £’000 | | |
Non-current contract liabilities – deferred revenue £’000 | | |
Total contract liabilities – deferred revenue £’000 | |
At 1 July 2022 | |
| (165,847 | ) | |
| (16,697 | ) | |
| (182,544 | ) |
Recognized in revenue during the period | |
| 156,407 | | |
| - | | |
| 156,407 | |
Cash received/amounts invoiced during the period | |
| (107,786 | ) | |
| - | | |
| (107,786 | ) |
Reclassified to current during the period | |
| (12,855 | ) | |
| 12,855 | | |
| - | |
At 31 March 2023 | |
| (130,081 | ) | |
| (3,842 | ) | |
| (133,923 | ) |
Recognized in revenue during the period | |
| 90,590 | | |
| - | | |
| 90,590 | |
Cash received/amounts invoiced during the period | |
| (132,950 | ) | |
| - | | |
| (132,950 | ) |
Reclassified to current during the period | |
| 2,817 | | |
| (2,817 | ) | |
| - | |
At 30 June 2023 | |
| (169,624 | ) | |
| (6,659 | ) | |
| (176,283 | ) |
Recognized in revenue during the period | |
| 164,897 | | |
| - | | |
| 164,897 | |
Cash received/amounts invoiced during the period | |
| (98,091 | ) | |
| - | | |
| (98,091 | ) |
Reclassified to current during the period | |
| 175 | | |
| (175 | ) | |
| - | |
At 31 March 2024 | |
| (102,643 | ) | |
| (6,834 | ) | |
| (109,477 | ) |
Commercial,
broadcasting and matchday consideration which is received in advance of the performance obligation being satisfied is treated as a contract
liability (deferred revenue). The deferred revenue is then recognized as revenue when the performance obligation is satisfied. The
Group receives substantial amounts of deferred revenue prior to the previous financial year end which is then recognized as revenue throughout
the current and, where applicable, future financial years.
Manchester United plc
Notes to the interim consolidated
financial statements (continued) - unaudited
| |
Three months ended 31 March | | |
Nine months ended 31 March | |
| |
2024 £’000 | | |
2023 £’000 | | |
2024 £’000 | | |
2023 £’000 | |
Employee benefit expenses | |
| (91,168 | ) | |
| (85,026 | ) | |
| (276,550 | ) | |
| (244,592 | ) |
Depreciation - property, plant and equipment (Note 14) | |
| (3,759 | ) | |
| (2,971 | ) | |
| (11,235 | ) | |
| (8,898 | ) |
Depreciation – right-of-use assets (Note 15) | |
| (315 | ) | |
| (426 | ) | |
| (954 | ) | |
| (1,446 | ) |
Depreciation - investment property (Note 16) | |
| (70 | ) | |
| (70 | ) | |
| (210 | ) | |
| (210 | ) |
Amortization (Note 17) | |
| (46,262 | ) | |
| (42,922 | ) | |
| (143,602 | ) | |
| (128,032 | ) |
Sponsorship, other commercial and broadcasting costs | |
| (5,244 | ) | |
| (6,060 | ) | |
| (24,382 | ) | |
| (21,125 | ) |
External Matchday costs | |
| (5,701 | ) | |
| (15,371 | ) | |
| (24,544 | ) | |
| (29,030 | ) |
Property costs | |
| (4,153 | ) | |
| (4,907 | ) | |
| (11,992 | ) | |
| (14,425 | ) |
Other operating expenses | |
| (16,720 | ) | |
| (18,922 | ) | |
| (53,751 | ) | |
| (60,201 | ) |
Exceptional items (Note 8) | |
| (30,340 | ) | |
| - | | |
| (39,935 | ) | |
| - | |
| |
| (203,732 | ) | |
| (176,675 | ) | |
| (587,155 | ) | |
| (507,959 | ) |
| |
Three months ended 31 March | | |
Nine months ended 31 March | |
| |
2024 £’000 | | |
2023 £’000 | | |
2024 £’000 | | |
2023 £’000 | |
Costs related to strategic review and share sale agreement with Sir Jim Ratcliffe | |
| (30,340 | ) | |
| - | | |
| (34,406 | ) | |
| - | |
Compensation paid for loss of office | |
| - | | |
| - | | |
| (5,529 | ) | |
| - | |
| |
| (30,340 | ) | |
| - | | |
| (39,935 | ) | |
| - | |
On 22 November 2022, Manchester United plc
announced intentions to explore strategic alternatives for the club and on 24 December 2023 it was announced that an agreement had
been reached with Sir Jim Ratcliffe for the sale of 25% of Manchester United plc’s Class B shares and up to 25% of Manchester
United plc’s Class A shares. On 20 February 2024, once Premier League and Football Association approval had been received,
the deal was confirmed. Exceptional items for the three and nine months ended 31 March 2024 comprise costs related to this transaction
and compensation for loss of office charges for changes in management as a result of this transaction.
9 | Profit on disposal of intangible assets |
| |
Three months ended 31 March | | |
Nine months ended 31 March | |
| |
2024 £’000 | | |
2023 £’000 | | |
2024 £’000 | | |
2023 £’000 | |
Profit on disposal of registrations | |
| 790 | | |
| 1,949 | | |
| 30,670 | | |
| 15,969 | |
| |
| 790 | | |
| 1,949 | | |
| 30,670 | | |
| 15,969 | |
Manchester United plc
Notes to the interim consolidated
financial statements (continued) - unaudited
| |
Three months ended 31 March | | |
Nine months ended 31 March | |
| |
2024 £’000 | | |
2023 £’000 | | |
2024 £’000 | | |
2023 £’000 | |
Interest payable on bank loans and overdrafts | |
| (272 | ) | |
| (427 | ) | |
| (585 | ) | |
| (1,633 | ) |
Interest payable on secured term loan facility, senior secured notes and revolving facilities | |
| (9,169 | ) | |
| (8,257 | ) | |
| (27,967 | ) | |
| (22,019 | ) |
Interest payable on lease liabilities (Note 15) | |
| (168 | ) | |
| (18 | ) | |
| (516 | ) | |
| (82 | ) |
Amortization of issue costs on secured term loan facility, senior secured notes and revolving facilities | |
| (374 | ) | |
| (188 | ) | |
| (1,127 | ) | |
| (553 | ) |
Foreign exchange losses on retranslation of unhedged US dollar borrowings (1) | |
| (2,641 | ) | |
| - | | |
| (3,062 | ) | |
| - | |
Unwinding of discount on deferred payments relating to registrations | |
| (3,789 | ) | |
| (2,317 | ) | |
| (11,740 | ) | |
| (5,794 | ) |
Interest on provisions | |
| (242 | ) | |
| (60 | ) | |
| (391 | ) | |
| (198 | ) |
Hedge ineffectiveness on cash flow hedges | |
| (1,722 | ) | |
| - | | |
| - | | |
| - | |
Fair value movement on derivative financial instruments: | |
| | | |
| | | |
| | | |
| | |
Embedded foreign exchange derivatives | |
| - | | |
| (3,390 | ) | |
| (8,332 | ) | |
| (498 | ) |
Total finance costs | |
| (18,377 | ) | |
| (14,657 | ) | |
| (53,720 | ) | |
| (30,777 | ) |
Interest receivable on short-term bank deposits | |
| 280 | | |
| 129 | | |
| 852 | | |
| 320 | |
Foreign exchange gains on retranslation of unhedged US dollar borrowings (2) | |
| - | | |
| 12,997 | | |
| - | | |
| 10,294 | |
Hedge ineffectiveness on cash flow hedges | |
| - | | |
| 530 | | |
| 654 | | |
| 289 | |
Embedded foreign exchange derivatives | |
| 777 | | |
| - | | |
| - | | |
| - | |
Total finance income | |
| 1,057 | | |
| 13,656 | | |
| 1,506 | | |
| 10,903 | |
Net finance costs | |
| (17,320 | ) | |
| (1,001 | ) | |
| (52,214 | ) | |
| (19,874 | ) |
(1) Unrealized
foreign exchange losses on unhedged USD borrowings due to an unfavourable swing in foreign exchange rates.
(2)
Unrealized foreign exchange gains on unhedged USD borrowings due to a favourable swing in foreign exchange rates.
Manchester United plc
Notes to the interim consolidated
financial statements (continued) - unaudited
| |
Three months ended 31 March | | |
Nine months ended 31 March | |
| |
2024 £’000 | | |
2023 £’000 | | |
2024 £’000 | | |
2023 £’000 | |
Current tax | |
| | | |
| | | |
| | | |
| | |
Current tax on loss for the period | |
| (86 | ) | |
| (70 | ) | |
| (246 | ) | |
| (206 | ) |
Foreign tax | |
| - | | |
| (205 | ) | |
| (676 | ) | |
| (572 | ) |
Total current tax expense | |
| (86 | ) | |
| (275 | ) | |
| (922 | ) | |
| (778 | ) |
Deferred tax | |
| | | |
| | | |
| | | |
| | |
Origination and reversal of temporary differences | |
| 12,155 | | |
| 407 | | |
| 13,193 | | |
| 5,815 | |
Total deferred tax credit | |
| 12,155 | | |
| 407 | | |
| 13,193 | | |
| 5,815 | |
Total income tax credit | |
| 12,069 | | |
| 132 | | |
| 12,271 | | |
| 5,037 | |
Tax is recognized based on management’s
estimate of the weighted average annual tax rate expected for the full financial year. Based on current forecasts, the estimated weighted
average annual tax rate used for the year to 30 June 2024 is 14.52% (30 June 2023: (20.99%)).
The current year estimated weighted average annual tax rate of 14.52%
is driven by costs not deductible in the UK associated with the strategic review, which reduces carried forward losses.
The prior year estimated weighted average annual
tax rate of 20.99% was also largely driven by the UK deferred tax movements.
In addition to the amounts recognized in the statement
of profit or loss, the following amounts relating to tax have been recognized in other comprehensive income:
| |
Three months ended 31 March | | |
Nine months ended 31 March | |
| |
2024 £’000 | | |
2023 £’000 | | |
2024 £’000 | | |
2023 £’000 | |
Deferred tax (Note 18) | |
| 95 | | |
| 67 | | |
| 1,437 | | |
| (352 | ) |
Total income tax credit/(expense) recognized in other comprehensive income | |
| 95 | | |
| 67 | | |
| 1,437 | | |
| (352 | ) |
Manchester United plc
Notes to the interim consolidated
financial statements (continued) - unaudited
| |
Three months ended 31 March | | |
Nine months ended 31 March | |
| |
2024 | | |
2023 | | |
2024 | | |
2023 | |
Loss for the period (£’000) | |
| (71,500 | ) | |
| (5,547 | ) | |
| (76,883 | ) | |
| (25,757 | ) |
Basic loss per share (pence) | |
| (43.12 | ) | |
| (3.40 | ) | |
| (46.87 | ) | |
| (15.80 | ) |
Diluted loss per share (pence) (1) | |
| (43.12 | ) | |
| (3.40 | ) | |
| (46.87 | ) | |
| (15.80 | ) |
Basic loss per share is calculated by dividing the loss for the period
by the weighted average number of ordinary shares in issue during the period.
| (ii) | Diluted loss per share |
Diluted loss per share is calculated by adjusting the weighted average
number of ordinary shares in issue during the year to assume conversion of all dilutive potential ordinary shares. The Company has 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,
or, if later, the date of issue of the potential ordinary shares.
(iii) | Weighted average number of shares used as the denominator |
| |
Three months ended 31 March | | |
Nine months ended 31 March | |
| |
2024 Number ‘000 | | |
2023 Number ‘000 | | |
2024 Number ‘000 | | |
2023 Number ‘000 | |
Class A ordinary shares | |
| 54,918 | | |
| 52,013 | | |
| 54,918 | | |
| 52,013 | |
Class B ordinary shares | |
| 114,301 | | |
| 112,732 | | |
| 114,301 | | |
| 112,732 | |
Treasury shares | |
| (1,683 | ) | |
| (1,683 | ) | |
| (1,683 | ) | |
| (1,683 | ) |
Weighted average number of ordinary shares used as the denominator in calculating basic loss per share | |
| 165,823 | | |
| 163,062 | | |
| 164,040 | | |
| 163,062 | |
Weighted average number of ordinary shares and potential ordinary shares used as the denominator in calculating diluted loss per share(1) | |
| 165,823 | | |
| 163,062 | | |
| 164,040 | | |
| 163,062 | |
(1) For
the three and nine months ended 31 March 2024 and the three and nine months ended 31 March 2023, 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.
Manchester United plc
Notes to the interim consolidated
financial statements (continued) - unaudited
No dividends were paid in the nine months ended
31 March 2024 (nine months ended 31 March 2023: nil).
14 | Property, plant and equipment |
| |
Freehold property £’000 | | |
Plant and machinery £’000 | | |
Fixtures and fittings £’000 | | |
Total £’000 | |
At 1 July 2023 | |
| | | |
| | | |
| | | |
| | |
Cost | |
| 287,413 | | |
| 46,706 | | |
| 75,873 | | |
| 409,992 | |
Accumulated depreciation | |
| (66,677 | ) | |
| (35,094 | ) | |
| (54,939 | ) | |
| (156,710 | ) |
Net book amount | |
| 220,736 | | |
| 11,612 | | |
| 20,934 | | |
| 253,282 | |
Nine months ended 31 March 2024 | |
| | | |
| | | |
| | | |
| | |
Opening net book amount | |
| 220,736 | | |
| 11,612 | | |
| 20,934 | | |
| 253,282 | |
Additions | |
| 2,787 | | |
| 2,993 | | |
| 7,081 | | |
| 12,861 | |
Depreciation charge | |
| (2,616 | ) | |
| (3,711 | ) | |
| (4,908 | ) | |
| (11,235 | ) |
Closing net book amount | |
| 220,907 | | |
| 10,894 | | |
| 23,107 | | |
| 254,908 | |
At 31 March 2024 | |
| | | |
| | | |
| | | |
| | |
Cost | |
| 290,200 | | |
| 49,699 | | |
| 82,954 | | |
| 422,853 | |
Accumulated depreciation | |
| (69,293 | ) | |
| (38,805 | ) | |
| (59,847 | ) | |
| (167,945 | ) |
Net book amount | |
| 220,907 | | |
| 10,894 | | |
| 23,107 | | |
| 254,908 | |
| |
| | | |
| | | |
| | | |
| | |
At 1 July 2022 | |
| | | |
| | | |
| | | |
| | |
Cost | |
| 281,377 | | |
| 39,562 | | |
| 75,394 | | |
| 396,333 | |
Accumulated depreciation | |
| (63,261 | ) | |
| (34,293 | ) | |
| (56,118 | ) | |
| (153,672 | ) |
Net book amount | |
| 218,116 | | |
| 5,269 | | |
| 19,276 | | |
| 242,661 | |
Nine months ended 31 March 2023 | |
| | | |
| | | |
| | | |
| | |
Opening net book amount | |
| 218,116 | | |
| 5,269 | | |
| 19,276 | | |
| 242,661 | |
Additions | |
| 2,611 | | |
| 1,734 | | |
| 4,622 | | |
| 8,967 | |
Depreciation charge | |
| (2,559 | ) | |
| (1,952 | ) | |
| (4,387 | ) | |
| (8,898 | ) |
Closing net book amount | |
| 218,168 | | |
| 5,051 | | |
| 19,511 | | |
| 242,730 | |
At 31 March 2023 | |
| | | |
| | | |
| | | |
| | |
Cost | |
| 283,988 | | |
| 41,296 | | |
| 80,016 | | |
| 405,300 | |
Accumulated depreciation | |
| (65,820 | ) | |
| (36,245 | ) | |
| (60,505 | ) | |
| (162,570 | ) |
Net book amount | |
| 218,168 | | |
| 5,051 | | |
| 19,511 | | |
| 242,730 | |
Manchester United plc
Notes to the interim consolidated
financial statements (continued) - unaudited
(i) | Amounts recognized in the consolidated balance sheet |
The balance sheet shows the following
amounts relating to leases:
Right-of-use assets:
| |
31
March 2024
£’000 | | |
30
June 2023 £’000 | | |
31
March 2023 £’000 | |
Property | |
| 7,467 | | |
| 8,114 | | |
| 2,579 | |
Plant and
machinery | |
| 446 | | |
| 646 | | |
| 373 | |
Total | |
| 7,913 | | |
| 8,760 | | |
| 2,952 | |
Additions to right-of-use assets for
the nine months ended 31 March 2024 amounted £107,000 (year ended 30 June 2023: £6,384,000; nine months ended 31
March 2023: £331,000).
Lease liabilities:
| |
31
March 2024
£’000 | | |
30
June 2023 £’000 | | |
31
March 2023 £’000 | |
Current | |
| 730 | | |
| 1,036 | | |
| 792 | |
Non-current | |
| 7,603 | | |
| 7,844 | | |
| 2,367 | |
Total
lease liabilities | |
| 8,333 | | |
| 8,880 | | |
| 3,159 | |
The following
table provides an analysis of the movements in lease liabilities:
| |
£’000 | |
At 1 July 2022 | |
| 4,430 | |
Cash flows | |
| (1,703 | ) |
Additions | |
| 330 | |
Accretion
expense | |
| 102 | |
At 31 March 2023 | |
| 3,159 | |
Cash flows | |
| (439 | ) |
Additions | |
| 6,054 | |
Accretion
expense | |
| 106 | |
At 30 June 2023 | |
| 8,880 | |
Cash flows | |
| (1,237 | ) |
Additions | |
| 174 | |
Accretion
expense | |
| 516 | |
At 31 March 2024 | |
| 8,333 | |
Manchester United plc
Notes to the interim consolidated
financial statements (continued) - unaudited
15 Leases
(continued)
(ii) Amounts
recognized in the consolidated statement of profit or loss:
| |
Three months ended 31 March | | |
Nine months ended 31 March | |
| |
2024 £’000 | | |
2023 £’000 | | |
2024 £’000 | | |
2023 £’000 | |
Depreciation charge of right -of-use assets | |
| | |
| | |
| | |
| |
Property | |
| (216 | ) | |
| (346 | ) | |
| (647 | ) | |
| (1,076 | ) |
Plant and machinery | |
| (99 | ) | |
| (80 | ) | |
| (307 | ) | |
| (370 | ) |
| |
| (315 | ) | |
| (426 | ) | |
| (954 | ) | |
| (1,446 | ) |
Interest expense (included in finance costs) | |
| (168 | ) | |
| (18 | ) | |
| (516 | ) | |
| (82 | ) |
Expense relating to short-term leases (included in operating expenses) | |
| (62 | ) | |
| (93 | ) | |
| (196 | ) | |
| (287 | ) |
(iii) The
group’s leasing activities and how these are accounted for
The Group leases
various offices and equipment. All leases with a term of more than 12 months, unless the underlying asset is of low value, are recognized
as a right-of-use asset, with a corresponding lease liability, at the date at which the leased asset is available for use by the Group.
The lease agreements
do not impose any covenants other than the security interests in the right-of-use assets that are held by the lessor. Right-of-use assets
may not be used as security for borrowing purposes.
Lease liabilities
are initially measured on a present value basis. Lease liabilities include the net present value of lease payments, less any lease incentives
receivable. The lease payments are discounted using the interest rate implicit in the lease. If that rate cannot be determined, which
is generally the case for leases of the Group, the Group’s incremental borrowing rate is used, being the rate that the Group would
have to pay to borrow the funds necessary to obtain an asset of similar value to the right-of-use asset in a similar economic environment
with similar terms, security and conditions.
Lease payments
are allocated between principal and finance cost. The finance cost is charged to profit or loss over the lease period so as to produce
a constant periodic rate of interest on the remaining balance of the liability for each period.
Right-of-use assets
are initially measured at cost comprising the following:
|
● |
the amount of the initial measurement of the lease liability; |
|
● |
any lease payments made at or before the commencement date less any lease incentives received; |
| ● | any initial direct costs; and |
Right-of-use assets
are depreciated over the shorter of the asset’s useful life and the lease term on a straight-line basis. Payments associated with
short-term leases of property, plant and equipment and all leases of low-value assets are recognized on a straight-line basis as an expense
in profit or loss. Short-term leases are leases with a lease term of 12 months or less.
Manchester United plc
Notes to the interim consolidated
financial statements (continued) - unaudited
16 Investment
property
| |
Total £’000 | |
At 1 July 2023 | |
| | |
Cost | |
| 32,193 | |
Accumulated depreciation and impairment | |
| (12,200 | ) |
Net book amount | |
| 19,993 | |
Nine months ended 31 March 2024 | |
| | |
Opening net book amount | |
| 19,993 | |
Depreciation charge | |
| (210 | ) |
Closing net book amount | |
| 19,783 | |
At 31 March 2024 | |
| | |
Cost | |
| 32,193 | |
Accumulated depreciation and impairment | |
| (12,410 | ) |
Net book amount | |
| 19,783 | |
| |
| | |
At 1 July 2022 | |
| | |
Cost | |
| 32,193 | |
Accumulated depreciation and impairment | |
| (11,920 | ) |
Net book amount | |
| 20,273 | |
Nine months ended 31 March 2023 | |
| | |
Opening net book amount | |
| 20,273 | |
Depreciation charge | |
| (210 | ) |
Closing net book amount | |
| 20,063 | |
At 31 March 2023 | |
| | |
Cost | |
| 32,193 | |
Accumulated depreciation and impairment | |
| (12,130 | ) |
Net book amount | |
| 20,063 | |
Investment
properties were externally valued as of 30 June 2023 in accordance with the Royal Institution
of Chartered Surveyors (“RICS”) Valuation - Global Standards 2017 on the basis of Fair Value (as defined in the Standards).
The fair value of investment properties as of 30 June 2023 was £32,970,000. Management has considered the carrying amount
of investment property as of 31 March 2024 and concluded that, as there are no indicators of impairment, an impairment test is not
required.
The fair value
of investment properties is determined using inputs that are not based on observable market data, consequently the asset is categorized
as Level 3.
Manchester United plc
Notes to the interim consolidated
financial statements (continued) - unaudited
17 Intangible assets
| |
Goodwill £’000 | | |
Registrations £’000 | | |
Other intangible assets £’000 | | |
Total £’000 | |
At 1 July 2023 | |
| | | |
| | | |
| | | |
| | |
Cost | |
| 421,453 | | |
| 924,829 | | |
| 22,164 | | |
| 1,368,446 | |
Accumulated amortization | |
| - | | |
| (539,944 | ) | |
| (16,120 | ) | |
| (556,064 | ) |
Net book amount | |
| 421,453 | | |
| 384,885 | | |
| 6,044 | | |
| 812,382 | |
Nine months ended 31 March 2024 | |
| | | |
| | | |
| | | |
| | |
Opening net book amount | |
| 421,453 | | |
| 384,885 | | |
| 6,044 | | |
| 812,382 | |
Additions | |
| - | | |
| 214,387 | | |
| 4,095 | | |
| 218,482 | |
Disposals | |
| - | | |
| (9,979 | ) | |
| - | | |
| (9,979 | ) |
Amortization charge | |
| - | | |
| (141,318 | ) | |
| (2,284 | ) | |
| (143,602 | ) |
Closing net book amount | |
| 421,453 | | |
| 447,975 | | |
| 7,855 | | |
| 877,283 | |
At 31 March 2024 | |
| | | |
| | | |
| | | |
| | |
Cost | |
| 421,453 | | |
| 1,025,143 | | |
| 26,259 | | |
| 1,472,855 | |
Accumulated amortization | |
| - | | |
| (577,168 | ) | |
| (18,404 | ) | |
| (595,572 | ) |
Net book amount | |
| 421,453 | | |
| 447,975 | | |
| 7,855 | | |
| 877,283 | |
| |
| | | |
| | | |
| | | |
| | |
At 1 July 2022 | |
| | | |
| | | |
| | | |
| | |
Cost | |
| 421,453 | | |
| 779,197 | | |
| 18,817 | | |
| 1,219,467 | |
Accumulated amortization | |
| - | | |
| (462,986 | ) | |
| (13,203 | ) | |
| (476,189 | ) |
Net book amount | |
| 421,453 | | |
| 316,211 | | |
| 5,614 | | |
| 743,278 | |
Nine months ended 31 March 2023 | |
| | | |
| | | |
| | | |
| | |
Opening net book amount | |
| 421,453 | | |
| 316,211 | | |
| 5,614 | | |
| 743,278 | |
Additions | |
| - | | |
| 235,130 | | |
| 1,742 | | |
| 236,872 | |
Disposals | |
| - | | |
| (8,811 | ) | |
| - | | |
| (8,811 | ) |
Amortization charge | |
| - | | |
| (125,823 | ) | |
| (2,209 | ) | |
| (128,032 | ) |
Closing net book amount | |
| 421,453 | | |
| 416,707 | | |
| 5,147 | | |
| 843,307 | |
At 31 March 2023 | |
| | | |
| | | |
| | | |
| | |
Cost | |
| 421,453 | | |
| 982,275 | | |
| 20,559 | | |
| 1,424,287 | |
Accumulated amortization | |
| - | | |
| (565,568 | ) | |
| (15,412 | ) | |
| (580,980 | ) |
Net book amount | |
| 421,453 | | |
| 416,707 | | |
| 5,147 | | |
| 843,307 | |
Manchester United plc
Notes to the interim consolidated
financial statements (continued) - unaudited
17 Intangible assets (continued)
Impairment
tests for goodwill
Goodwill is not
subject to amortization and is tested annually for impairment (normally at the end of the third fiscal quarter) or more frequently if
events or changes in circumstances indicate a potential impairment.
An
impairment test has been performed on the carrying value of goodwill based on value-in-use calculations.
The value-in-use calculations have used pre-tax cash flow projections based on the financial budgets approved by management covering
a five year period. The budgets are based on past experience in respect of revenues, variable and fixed costs, registrations and other
capital expenditure and working capital assumptions. For each accounting period, cash flows beyond the five year period are extrapolated
using a terminal growth rate of 2.0% (2023: 2.0%), which does not exceed the long term average growth rate for the UK economy in which
the cash generating unit operates.
The
other key assumptions used in the value in use calculations for each period are the pre-tax discount rate, which has been determined
at 11.6% (2023: 11.8%) for each period and certain assumptions around progression in and qualification for domestic and European cup
competitions, notably the Champions League.
Management determined
budgeted revenue growth based on historic performance and its expectations of market development. The discount rates are pre-tax and
reflect the specific risks relating to the business.
The following sensitivity analysis was
performed:
| ● | increase
the discount rate by 1% (post-tax); |
| ● | more
prudent assumptions around qualification for European competitions; and |
| ● | increase
future capital expenditure. |
In each of these
scenarios the estimated recoverable amount substantially exceeds the carrying value for the cash generating unit and accordingly no impairment
was identified.
Having assessed
the future anticipated cash flows, management believes that any reasonably possible changes in key assumptions would not result in an
impairment of goodwill.
Significant
estimates – fair value of registrations
The costs associated
with the acquisition of players’ and key football management staff registrations include an estimate of the fair value of any contingent
consideration. The estimate of the fair value of the contingent consideration payable requires management to assess the likelihood of
specific performance conditions being met which would trigger the payment of the contingent consideration. This assessment is carried
out on an individual basis. The maximum additional amount that could be payable as of 31 March 2024 is disclosed in Note 31.1. The
estimate over the probability of contingent consideration payable could impact the net book value of registrations and amortization recognized
in the statement of profit or loss.
Other intangible
assets
Other intangible
assets include internally generated assets whose cost and accumulated amortization as of 31 March 2024 was £2,103,000 and
£2,103,000 respectively (31 March 2023: £2,103,000 and £2,103,000 respectively).
Manchester United plc
Notes to the interim consolidated
financial statements (continued) - unaudited
18 Deferred
tax
Deferred tax assets
and liabilities are offset where the Group has a legally enforceable right to do so. The following is the analysis of the deferred tax
balances (after allowable offset) for financial reporting purposes:
| |
31 March 2024 £’000 | | |
30 June 2023 £’000 | | |
31 March 2023 £’000 | |
Net deferred tax asset/(liability) | |
| 11,010 | | |
| (3,304 | ) | |
| (1,939 | ) |
The movements in the net deferred tax
asset/(liability) are as follows:
| |
31 March 2024 £’000 | | |
30 June 2023 £’000 | | |
31 March 2023 £’000 | |
At the beginning of the period | |
| (3,304 | ) | |
| (7,402 | ) | |
| (7,402 | ) |
Credited to the statement of profit or loss (Note 11) | |
| 13,193 | | |
| 4,801 | | |
| 5,815 | |
Credited/(expensed) to other comprehensive income (Note 11) | |
| 1,437 | | |
| (1,018 | ) | |
| (352 | ) |
(Expense)/credit relating to share-based payments | |
| (316 | ) | |
| 315 | | |
| - | |
At the end of the period | |
| 11,010 | | |
| (3,304 | ) | |
| (1,939 | ) |
Group
profits are subject to both UK and US corporate tax. The current US federal corporate income tax rate is 21% compared to the UK corporation
tax rate of 25%. As the UK corporation tax rate is higher than the US federal corporate income tax rate, it is forecast that all future
US cash tax will be sheltered by foreign tax credits derived from UK tax paid. A potential US deferred tax asset at the period end has
therefore not been recognised as it is not forecast to give rise to a future economic benefit. Future
increases in the US federal corporate income tax rate could result in the recognition of the US deferred tax asset.
The deferred tax asset at 31 March 2024
relates to carried forward losses, partially offset by deferred tax liabilities in relation to tangible and intangible assets.
Significant
estimates – recognition of deferred tax assets
Deferred
tax assets are recognized only to the extent that it is probable that the associated deductions will be available for use against future
profits and that there will be sufficient future taxable profit available against which the temporary differences can be utilized, provided
the asset can be reliably quantified. In estimating future taxable profit, management use “base case” approved forecasts
which incorporate a number of assumptions, including a prudent level of future uncontracted revenue in the forecast period. In arriving
at a judgment in relation to the recognition of deferred tax assets, management considers the regulations applicable to tax, advice on
their interpretation and potential future business planning. Future taxable income may be higher or lower than estimates made when determining
whether it is appropriate to record a tax asset and the amount to be recorded. Furthermore, changes in the legislative framework or applicable
tax case law may result in management reassessing the recognition of deferred tax assets in future periods.
Manchester United plc
Notes to the interim consolidated
financial statements (continued) - unaudited
19 Inventories
|
|
31 March
2024 £’000 |
|
|
30 June 2023 £’000 |
|
|
31 March 2023 £’000 |
|
Finished goods |
|
|
3,757 |
|
|
|
3,165 |
|
|
|
2,645 |
|
The cost of inventories
recognized as an expense and included in operating expenses for the nine months ended 31 March 2024 amounted to £10,939,000
(year ended 30 June 2023: £12,307,000; nine months ended 31 March 2023: £10,069,000).
20 Trade
receivables
| |
31
March 2024 £’000 | | |
30 June 2023 £’000 | | |
31 March 2023 £’000 | |
Trade receivables | |
| 70,463 | | |
| 69,729 | | |
| 96,540 | |
Less: provision for impairment of trade receivables | |
| (8,096 | ) | |
| (16,259 | ) | |
| (14,734 | ) |
Net trade receivables | |
| 62,367 | | |
| 53,470 | | |
| 81,806 | |
Less: non-current portion | |
| | | |
| | | |
| | |
Trade receivables | |
| 24,694 | | |
| 22,303 | | |
| 21,485 | |
Current trade receivables | |
| 37,673 | | |
| 31,167 | | |
| 60,321 | |
Net
trade receivables include transfer fees receivable from other football clubs of £51,859,000 (30 June 2023: £42,309,000;
31 March 2023: £49,907,000) of which £24,641,000 (30 June 2023: £22,303,000; 31 March 2023: £21,484,000)
is receivable after more than one year. Net trade receivables also include £9,652,000 (30
June 2023: £13,207,000; 31 March 2023: £26,495,000) of deferred revenue that is contractually payable to the Group,
but recorded in advance of the earnings process, with corresponding amounts recorded as contract liabilities - deferred revenue.
Gross
contractual trade receivables pre discounting as at 31 March 2024 were £64,756,000 (30 June 2023: £54,393,000;
31 March 2023: £83,034,000).
Manchester
United plc
Notes to the interim consolidated
financial statements (continued) - unaudited
21 Derivative
financial instruments
| |
31 March 2024 | | |
30 June 2023 | | |
31 March 2023 | |
| |
Assets | | |
Liabilities | | |
Assets | | |
Liabilities | | |
Assets | | |
Liabilities | |
| |
| £’000 | | |
| £’000 | | |
| £’000 | | |
| £’000 | | |
| £’000 | | |
| £’000 | |
Used for hedging: | |
| | | |
| | | |
| | | |
| | | |
| | | |
| | |
Interest rate swaps | |
| 1,347 | | |
| - | | |
| 4,173 | | |
| - | | |
| 3,809 | | |
| - | |
Forward foreign exchange contracts | |
| - | | |
| - | | |
| 378 | | |
| (1,615 | ) | |
| - | | |
| - | |
At fair value through profit or loss: | |
| | | |
| | | |
| | | |
| | | |
| | | |
| | |
Embedded foreign exchange derivatives | |
| 859 | | |
| - | | |
| 11,258 | | |
| (64 | ) | |
| 16,093 | | |
| - | |
Forward foreign exchange contracts | |
| - | | |
| (5,478 | ) | |
| - | | |
| - | | |
| 1,094 | | |
| (1,351 | ) |
| |
| 2,206 | | |
| (5,478 | ) | |
| 15,809 | | |
| (1,679 | ) | |
| 20,996 | | |
| (1,351 | ) |
Less non-current portion: | |
| | | |
| | | |
| | | |
| | | |
| | | |
| | |
Used for hedging: | |
| | | |
| | | |
| | | |
| | | |
| | | |
| | |
Interest rate swaps | |
| - | | |
| - | | |
| - | | |
| - | | |
| 3,809 | | |
| - | |
Forward foreign exchange contracts | |
| - | | |
| - | | |
| 378 | | |
| (748 | ) | |
| - | | |
| - | |
At fair value through profit or loss: | |
| | | |
| | | |
| | | |
| | | |
| | | |
| | |
Embedded foreign exchange derivatives | |
| 667 | | |
| - | | |
| 7,114 | | |
| - | | |
| 10,737 | | |
| - | |
Forward foreign exchange contracts | |
| - | | |
| (3,648 | ) | |
| - | | |
| - | | |
| 556 | | |
| (1,303 | ) |
Non-current derivative financial instruments | |
| 667 | | |
| (3,648 | ) | |
| 7,492 | | |
| (748 | ) | |
| 15,102 | | |
| (1,303 | ) |
Current derivative financial instruments | |
| 1,539 | | |
| (1,830 | ) | |
| 8,317 | | |
| (931 | ) | |
| 5,894 | | |
| (48 | ) |
Fair value hierarchy
Derivative financial instruments are
carried at fair value. The different levels used in measuring fair value have been defined in accounting standards as follows:
| ● | Level
1 – the fair value of financial instruments traded in active markets is based on quoted
market prices at the end of the reporting period. |
| ● | Level
2 - the fair value of financial instruments that are not traded in an active market is determined
using valuation techniques which maximize the use of observable market data and as little
as possible on entity-specific estimates. If all significant inputs required to fair value
an instrument are observable, the instrument is included in Level 2. |
| ● | Level
3 – if one or more of the significant inputs is not based on observable market data,
the instrument is included in Level 3. |
All of the financial instruments detailed
above are included in Level 2.
Manchester United plc
Notes to the interim consolidated
financial statements (continued) - unaudited
22 Cash
and cash equivalents
| |
31 March 2024 £’000 | | |
30 June 2023 £’000 | | |
31 March 2023 £’000 | |
Cash at bank and in hand | |
| 66,994 | | |
| 76,019 | | |
| 73,733 | |
Cash and cash equivalents
for the purposes of the interim consolidated statement of cash flows are as above.
23 Share capital
| |
Number of shares (thousands) | | |
Ordinary shares £’000 | |
At 1 July 2022 | |
| 164,745 | | |
| 53 | |
Employee share-based compensation awards – issue of shares | |
| - | | |
| - | |
At 31 March 2023 | |
| 164,745 | | |
| 53 | |
Employee share-based compensation awards – issue of shares | |
| 97 | | |
| - | |
At 30 June 2023 | |
| 164,842 | | |
| 53 | |
Issue of shares under transaction with Trawlers Limited | |
| 6,061 | | |
| 2 | |
At 31 March 2024 | |
| 170,903 | | |
| 55 | |
The Company has
two classes of ordinary shares outstanding: Class A ordinary shares and Class B ordinary shares, each with a par value of $0.0005.
The rights of the holders of Class A ordinary shares and Class B ordinary shares are identical, except with respect to voting
and conversion. Each Class A ordinary share is entitled to one vote per share and is not convertible into any other shares. Each
Class B ordinary share is entitled to 10 votes per share and is convertible into one Class A ordinary share at any time. In
addition, Class B ordinary shares will automatically convert into Class A ordinary shares upon certain transfers and other
events, including upon the date when holders of all Class B ordinary shares cease to hold Class B ordinary shares representing,
in the aggregate, at least 10% of the total number of Class A and Class B ordinary shares outstanding. For special resolutions
(which are required for certain important matters including mergers and changes to the Company’s governing documents), which require
the vote of two-thirds of the votes cast, at any time that Class B ordinary shares remain outstanding, the voting power permitted
to be exercised by the holders of the Class B ordinary shares will be weighted such that the Class B ordinary shares shall
represent, in the aggregate, 67% of the voting power of all shareholders.
Subsequent to the
transaction that saw Trawlers Limited acquire 26.2% of all Class A shares and 25% of all Class B shares in Manchester United
plc in February 2024, an issue of 6,060,060 additional shares was made to Trawlers Limited for proceeds of $200,000,000. A further
$100,000,000 issue is due to be made by the end of December 2024.
As of 31 March 2024,
the Company’s issued share capital comprised 56,601,130 Class A ordinary shares and 114,301,320 Class B ordinary shares.
1,682,896 Class A
ordinary shares are currently held in treasury. Distributable reserves have been reduced by £21,305,000, being the consideration
paid for these shares. See Note 24.
Manchester United plc
Notes to the interim consolidated
financial statements (continued) - unaudited
24 Treasury shares
| | |
Number of
shares (thousands) | | |
£’000 | |
At 1 July 2022 | | |
| (1,683 | ) | |
| (21,305 | ) |
Acquisition of shares | | |
| - | | |
| - | |
At 31 March 2023 | | |
| (1,683 | ) | |
| (21,305 | ) |
Acquisition of shares | | |
| - | | |
| - | |
At 30 June 2023 | | |
| (1,683 | ) | |
| (21,305 | ) |
Acquisition of shares | | |
| - | | |
| - | |
At 31 March 2024 | | |
| (1,683 | ) | |
| (21,305 | ) |
25 Trade
and other payables
| |
31 March 2024 £’000 | | |
30 June 2023 £’000 | | |
31 March 2023 £’000 | |
Trade payables | |
| 333,860 | | |
| 302,708 | | |
| 290,350 | |
Other payables | |
| 11,540 | | |
| 12,039 | | |
| 15,099 | |
Accrued expenses | |
| 45,033 | | |
| 62,271 | | |
| 70,816 | |
Social security and other taxes | |
| 16,190 | | |
| 20,595 | | |
| 15,146 | |
| |
| 406,623 | | |
| 397,613 | | |
| 391,411 | |
Less: non-current portion | |
| | | |
| | | |
| | |
Trade payables | |
| 188,531 | | |
| 160,649 | | |
| 155,269 | |
Other payables | |
| 50 | | |
| 492 | | |
| 634 | |
Non-current trade and other payables | |
| 188,581 | | |
| 161,141 | | |
| 155,903 | |
Current trade and other payables | |
| 218,042 | | |
| 236,472 | | |
| 235,508 | |
Trade
payables include transfer fees and other associated costs in relation to the acquisition of player registrations of £322,966,000
(30 June 2023: £276,626,000; 31 March 2023: £279,862,000) of which £178,393,000 (30 June 2023: £160,649,000;
31 March 2023: £155,269,000) is due after more than one year. Of the amount due after
more than one year, £109,541,000 (30 June 2023: £80,256,000; 31 March 2023: £77,374,000) is expected to be
paid between 1 and 2 years, and the balance of £68,852,000 (30 June 2023: £80,393,000; 31 March 2023: £77,895,000)
is expected to be paid between 2 and 5 years.
Gross
contractual trade payables pre discounting as at 31 March 2024 were £359,298,000 (30 June 2023: £317,809,000;
31 March 2023: £307,076,000). The gross contractual value of other payables is not materially different to their carrying
amount.
Manchester United plc
Notes to the interim consolidated financial statements (continued)
- unaudited
26 Borrowings
| |
31 March 2024 £’000 | | |
30 June 2023 £’000 | | |
31 March 2023 £’000 | |
Senior secured notes | |
| 334,699 | | |
| 332,112 | | |
| 341,361 | |
Secured term loan facility | |
| 176,597 | | |
| 175,223 | | |
| 180,121 | |
Revolving credit facilities | |
| 140,000 | | |
| 100,000 | | |
| 200,000 | |
Accrued interest on senior secured notes and revolving credit facilities | |
| 2,960 | | |
| 5,961 | | |
| 3,665 | |
| |
| 654,256 | | |
| 613,296 | | |
| 725,147 | |
Less: non-current portion | |
| | | |
| | | |
| | |
Senior secured notes | |
| 334,699 | | |
| 332,112 | | |
| 341,361 | |
Secured term loan facility | |
| 176,597 | | |
| 175,223 | | |
| 180,121 | |
Non-current borrowings | |
| 511,296 | | |
| 507,335 | | |
| 521,482 | |
Current borrowings | |
| 142,960 | | |
| 105,961 | | |
| 203,665 | |
The senior secured notes of £334,699,000
(30 June 2023: £332,112,000; 31 March 2023: £341,361,000) is stated net of unamortized issue costs amounting to
£1,746,000 (30 June 2023: £2,113,000; 31 March 2023: £2,239,000). The outstanding principal amount of the
senior secured notes is $425,000,000 (30 June 2023: $425,000,000; 31 March 2023: $425,000,000). The senior secured notes have
a fixed coupon rate of 3.79% per annum and interest is paid semi-annually. The senior secured notes mature on 25 June 2027.
The senior secured notes were issued by our wholly-owned
subsidiary, Manchester United Football Club Limited, and are guaranteed by Red Football Limited, Red Football Junior Limited, Manchester
United Limited and MU Finance Limited and are secured against substantially all of the assets of those entities and Manchester United
Football Club Limited. These entities are wholly-owned subsidiaries of Manchester United plc.
The
secured term loan facility of £178,119,000 (30 June 2023: £175,223,000; 31 March 2023: £180,121,000)
is stated net of unamortized issue costs amounting to £1,522,000 (30 June 2023: £1,720,000; 31 March 2023: £1,785,000).
The outstanding principal amount of the secured term loan facility is $225,000,000 (30 June 2023: $225,000,000; 31 March 2023:
$225,000,000). The secured term loan facility attracts interest of the Secured Overnight Financing Rate (SOFR) plus an applicable margin
of between 1.25% and 1.75% per annum and interest is paid monthly. The remaining balance of the secured term loan facility is repayable
on 6 August 2029, although the Group has the option to repay the secured term loan facility at any time before then.
The secured term loan facility was provided to
our wholly-owned subsidiary, Manchester United Football Club Limited, and is guaranteed by Red Football Limited, Red Football Junior
Limited, Manchester United Limited, MU Finance Limited and Manchester United Football Club Limited and is secured against substantially
all of the assets of each of those entities. These entities are wholly owned subsidiaries of Manchester United plc.
Manchester United plc
Notes to the interim consolidated financial statements (continued)
- unaudited
26 Borrowings
(continued)
The
Group also has £140,000,000 (30 June 2023: £100,000,000; 31 March 2023: £200,000,000) in outstanding
loans and £160,000,000 (30 June 2023: £200,000,000; 31 March 2023: £100,000,000) in borrowing capacity under
our revolving facilities. £150,000,000 of the facilities terminate on 4 April 2025 and the remainder terminates on 25 June 2027.
The Group has complied with all covenants under
its revolving facilities, the secured term loan facility and the note purchase agreement governing the senior secured notes during the
2024 and 2023 reporting periods.
27 Provisions
| |
Other(1) | | |
Tax(2) | | |
Total | |
| |
£’000 | | |
£’000 | | |
£’000 | |
At 1 July 2022 | |
| 1,143 | | |
| 11,501 | | |
| 12,644 | |
Charged/(credited) to profit or loss: | |
| | | |
| | | |
| | |
Reassessment of provisions | |
| (331 | ) | |
| 96 | | |
| (235 | ) |
Additional provisions recognized | |
| - | | |
| 294 | | |
| 294 | |
At 31 March 2023 | |
| 812 | | |
| 11,891 | | |
| 12,703 | |
Charged to profit or loss: | |
| | | |
| | | |
| | |
Reassessment of provisions | |
| 64 | | |
| 168 | | |
| 232 | |
Additional provisions recognized | |
| - | | |
| 4 | | |
| 4 | |
At 30 June 2023 | |
| 876 | | |
| 12,063 | | |
| 12,939 | |
Charged/(credited) to profit or loss: | |
| | | |
| | | |
| | |
Reassessment of provisions | |
| 112 | | |
| (2,096 | ) | |
| (1,984 | ) |
At 31 March 2024 | |
| 988 | | |
| 9,967 | | |
| 10,955 | |
Less: non-current portion | |
| | | |
| | | |
| | |
Provisions | |
| - | | |
| - | | |
| - | |
Current provisions | |
| 988 | | |
| 9,967 | | |
| 10,955 | |
(1) Other
provision
Other provision includes, amongst other items, make good provisions
as the Group is required to restore the leased premises of its office spaces to their original condition at the end of the respective
lease terms. A provision has been recognized based upon the estimated expenditure required to remove any leasehold improvements. The
remaining term on such leased properties is between the balance sheet date and 9 years.
(2) Tax
provision
Provision in respect of player related tax matters. The timing of
cash outflows is by its nature uncertain but it is management’s best estimate that these will be made within the next 12 months.
Manchester United plc
Notes to the interim consolidated financial statements (continued)
- unaudited
28 Cash generated from operations
| |
Three months ended 31 March | | |
Nine months ended 31 March | |
| |
2024 £’000 | | |
2023 £’000 | | |
2024 £’000 | | |
2023 £’000 | |
Loss before income tax | |
| (83,569 | ) | |
| (5,679 | ) | |
| (89,154 | ) | |
| (30,794 | ) |
Adjustments for: | |
| | | |
| | | |
| | | |
| | |
Depreciation | |
| 4,144 | | |
| 3,467 | | |
| 12,399 | | |
| 10,554 | |
Amortization | |
| 46,262 | | |
| 42,922 | | |
| 143,602 | | |
| 128,032 | |
Profit on disposal of intangible assets | |
| (790 | ) | |
| (1,949 | ) | |
| (30,670 | ) | |
| (15,969 | ) |
Net finance costs | |
| 17,320 | | |
| 1,001 | | |
| 52,214 | | |
| 19,874 | |
Non-cash employee benefit expense - equity-settled share-based payments | |
| 431 | | |
| 559 | | |
| 1,907 | | |
| 1,714 | |
| |
| | | |
| | | |
| | | |
| | |
Foreign exchange losses on operating activities | |
| 411 | | |
| 980 | | |
| 888 | | |
| 4,947 | |
Reclassified from hedging reserve | |
| 2 | | |
| 284 | | |
| - | | |
| (246 | ) |
Changes in working capital: | |
| | | |
| | | |
| | | |
| | |
Inventories | |
| 267 | | |
| 627 | | |
| (592 | ) | |
| (445 | ) |
Prepayments | |
| 9,522 | | |
| 9,304 | | |
| (1,311 | ) | |
| (1,624 | ) |
Contract assets – accrued revenue | |
| 7,932 | | |
| (9,368 | ) | |
| (10,555 | ) | |
| (26,634 | ) |
Trade receivables | |
| 41,849 | | |
| 51,766 | | |
| (2,506 | ) | |
| 3,679 | |
Other receivables | |
| 230 | | |
| 395 | | |
| 8,093 | | |
| (462 | ) |
Contract liabilities – deferred revenue | |
| (48,225 | ) | |
| (33,905 | ) | |
| (66,806 | ) | |
| (48,621 | ) |
Trade and other payables | |
| 1,980 | | |
| 5,104 | | |
| (29,859 | ) | |
| (31,870 | ) |
Provisions | |
| (350 | ) | |
| (300 | ) | |
| (2,375 | ) | |
| 59 | |
Cash (used in)/generated from operations | |
| (2,584 | ) | |
| 65,208 | | |
| (14,725 | ) | |
| 12,194 | |
Manchester United plc
Notes to the interim consolidated financial statements (continued)
- unaudited
29 Pension arrangements
The
Group participates in the Football League Pension and Life Assurance Scheme (‘the Scheme’). The Scheme is a funded multi-employer
defined benefit scheme where members may have periods of service attributable to several participating employers. The Group is unable
to identify its share of the assets and liabilities of the Scheme and therefore accounts for its contributions as if they were paid to
a defined contribution scheme. The Group has received confirmation that the assets and liabilities of the Scheme cannot be
split between the participating employers. The Group is advised only of the additional contributions it is required to pay to make good
the deficit. These contributions could increase in the future if one or more of the participating employers exits the Scheme.
The last triennial actuarial valuation of the
Scheme was carried out at 31 August 2020 where the total deficit on the ongoing valuation basis was £27.5 million. The
accrual of benefits ceased within the Scheme on 31 August 1999, therefore there are no contributions relating to current accrual. The
Group pays monthly contributions based on a notional split of the total expenses and deficit contributions of the Scheme.
The Group currently pays total contributions
of £573,000 per annum and this amount will increase by 5% per annum from September 2024. Based on the existing actuarial valuation
assumptions, this will be sufficient to pay off the deficit by 30 April 2025.
As of 31 March 2024, the present value of
the Group’s outstanding contributions (i.e. its future liability) is £634,000. This amounts to £634,000 (30 June 2023:
£567,000; 31 March 2023: £561,000) due within one year and £nil (30 June 2023: £491,000; 31 March 2023:
£634,000) due after more than one year and is included within other payables.
Contributions are also made to defined contribution
pension arrangements and are charged to the statement of profit or loss in the period in which they become payable.
Manchester United plc
Notes to the interim consolidated financial statements (continued)
- unaudited
30 Financial
risk management
30.1 Financial
risk factors
The Group’s activities expose it to a variety
of financial risks: market risk (including foreign exchange risk, and cash flow and fair value interest rate risk), credit risk, and
liquidity risk.
The interim consolidated financial statements
do not include all financial risk management information and disclosures required in the annual financial statements, they should be
read in conjunction with the audited consolidated financial statements and notes thereto for the year ended 30 June 2023, as filed
with the Securities and Exchange Commission on 27 October 2023, contained within the Company’s Annual Report on Form 20-F.
There have been no changes in risk management
since the previous financial year end or in any risk management policies.
30.2 Hedging
activities
The Group uses derivative financial instruments
to hedge certain exposures and has designated certain derivatives as hedges of cash flows (cash flow hedge).
The Group hedges the foreign exchange risk on
contracted future US dollar revenues whenever possible using the Group’s US dollar net borrowings as the hedging instrument. The
foreign exchange gains or losses arising on re-translation of the Group’s US dollar net borrowings used in the hedge are initially
recognized in other comprehensive income, rather than being recognized in the statement of profit or loss immediately. Amounts previously
recognized in other comprehensive income and accumulated in the hedging reserve are subsequently reclassified into the statement of profit
or loss in the same accounting period, and within the same statement of profit or loss line (i.e. commercial revenue), as the underlying
future US dollar revenues, which given the varying lengths of the commercial revenue contracts will be between April 2024 to June 2027.
The foreign exchange gains or losses arising on re-translation of the Group’s unhedged US dollar borrowings are recognized in the
statement of profit or loss immediately (within net finance costs). The table below details the net borrowings being hedged at the balance
sheet date:
| |
31 March 2024 $’000 | | |
30 June 2023 $’000 | | |
31 March 2023 $’000 | |
USD borrowings | |
| 650,000 | | |
| 650,000 | | |
| 650,000 | |
Hedged USD cash | |
| (13,000 | ) | |
| (57,500 | ) | |
| (25,311 | ) |
Net USD debt | |
| 637,000 | | |
| 592,500 | | |
| 624,689 | |
Hedged future USD revenues (1) | |
| (383,500 | ) | |
| (52,000 | ) | |
| (48,780 | ) |
Unhedged USD borrowings | |
| 253,500 | | |
| 540,500 | | |
| 575,909 | |
Closing USD exchange rate ($: £) | |
| 1.2632 | | |
| 1.2716 | | |
| 1.2369 | |
(1) A
further portion of the profit and loss exposure (within net finance costs) on unhedged USD borrowings is naturally offset by the fair
value of foreign exchange based embedded derivatives in host Commercial revenue contracts.
Manchester United plc
Notes to the interim consolidated
financial statements (continued) - unaudited
30 Financial
risk management (continued)
30.2 Hedging
activities (continued)
The Group hedges its cash flow interest rate
risk where considered appropriate using interest rate swaps. Such interest rate swaps have the economic effect of converting a portion
of variable rate borrowings from floating rates to fixed rates. The effective portion of changes in the fair value of the interest rate
swap is initially recognized in other comprehensive income, rather than being recognized in the statement of profit or loss immediately.
Amounts previously recognized in other comprehensive income and accumulated in the hedging reserve are subsequently reclassified into
the statement of profit or loss in the same accounting period, and within the same statement of profit or loss line (i.e. net finance
costs), as the underlying interest payments, which given the term of the swap will be between April 2024 to June 2024. The
following table details the interest rate swaps at the reporting date that are used to hedge borrowings:
| |
31 March 2024 | | |
30 June 2023 | | |
31 March 2023 | |
Principal value of loan outstanding ($‘000) | |
| 150,000 | | |
| 150,000 | | |
| 150,000 | |
Rate received | |
| 1 month $ SOFR | | |
| 1 month $ SOFR | | |
| 1 month $ LIBOR | |
Rate paid | |
| Fixed 1.9215% | | |
| Fixed 1.9215% | | |
| Fixed 2.032% | |
Expiry date | |
| 30 June 2024 | | |
| 30 June 2024 | | |
| 30 June 2024 | |
As of 31 March 2024, the fair value of the
above interest rate swaps was an asset of £1,347,000 (30 June 2023: asset of £4,173,000; 31 March 2023: asset of
£3,809,000).
The Group also seeks to hedge the majority of
the foreign exchange risk on revenue arising as a result of participation in UEFA club competitions, either by using contracted future
foreign exchange expenses (including player transfer fee commitments) or by placing forward foreign exchange contracts, at the point
at which it becomes reasonably certain that it will receive the revenue. The Group also seeks to hedge the foreign exchange risk on other
contracted future foreign exchange expenses using available foreign exchange cash balances and forward foreign exchange contracts.
Summary of hedging reserve
The Group’s hedging reserve comprises of
two separate hedging reserves, the cash flow hedge reserve and the cost of hedging reserve. Details of balances in each reserve (net
of tax) are shown below.
| |
At 31 March 2024 £’000 | | |
At 30 June 2023 £’000 | | |
At 31 March 2023 £’000 | |
Cash flow hedge reserve | |
| 831 | | |
| 2,815 | | |
| 1,993 | |
Cost of hedging reserve | |
| (1,139 | ) | |
| 1,187 | | |
| - | |
Total hedging reserve | |
| (308 | ) | |
| 4,002 | | |
| 1,993 | |
Manchester United plc
Notes to the interim consolidated financial statements (continued)
- unaudited
31 Contingent
liabilities and contingent assets
31.1 Contingent liabilities
The Group had contingent liabilities at 31 March 2024 in respect
of:
(i) Transfer fees
Under
the terms of certain contracts with other football clubs and agents in respect of player transfers, additional amounts, in excess of
the amounts included in the cost of registrations, would be payable by the Group if certain substantive performance conditions are met.
These excess amounts are only recognized within the cost of registrations when the Group considers that it is probable that the condition
related to the payment will be achieved. The maximum additional amounts that could be payable is £153,570,000 (30 June 2023:
£133,142,000; 31 March 2023: £145,386,000). No material adjustment was required to the amounts included in the
cost of registrations during the period (2023: no material adjustments) and consequently there was no material impact on the amortization
of registration charges in the statement of profit or loss (2023: no material impact). As of 31 March 2024, the potential amount
payable by type of condition and category of player was:
Type of condition | |
First team
squad £’000 | | |
Other £’000 | | |
Total £’000 | |
MUFC appearances/team success/new contract | |
| 71,271 | | |
| 37,267 | | |
| 108,538 | |
International appearances | |
| 10,361 | | |
| 1,725 | | |
| 12,086 | |
Awards | |
| 31,555 | | |
| 241 | | |
| 31,796 | |
Other | |
| 912 | | |
| 238 | | |
| 1,150 | |
| |
| 114,099 | | |
| 39,471 | | |
| 153,570 | |
(ii) Tax matters
We
are currently in active discussions with UK tax authorities over a number of tax areas in relation to arrangements with players
and players' representatives. It is possible that in the future, as a result of discussions between the Group and UK tax authorities,
as well as discussions UK tax authorities are holding with other stakeholders within the football industry, interpretations
of applicable rules will be challenged, which could result in liabilities in relation to these matters. The information
usually required by IAS 37 ‘Provisions, Contingent Liabilities and Contingent Assets’, is not disclosed on the grounds
that it is not practicable to be disclosed.
31.2 Contingent assets
(i) Transfer fees
Under the terms of certain contracts with other football clubs in
respect of player transfers, additional amounts would be payable to the Group if certain specific performance conditions are met. In
accordance with the recognition criteria for contingent assets, such amounts are only disclosed by the Group when probable and recognized
when virtually certain. As of 31 March 2024, the amount of such receipt considered to be probable was £nil (30 June 2023:
£nil; 31 March 2023: £nil).
Manchester United plc
Notes to the interim consolidated financial statements (continued)
- unaudited
32 Commitments
32.1 Capital
commitments
As
at 31 March 2024, the Group had contracted capital expenditure relating to property, plant and equipment amounting to £1,502,000
(30 June 2023: £5,152,000; 31 March 2023: £9,012,000) and to other intangible assets amounting to £nil
(30 June 2023: £nil; 31 March 2023: £84,000). These amounts are not recognized as liabilities.
33 Events
occurring after the reporting period
33.1 Registrations
Subsequent to 31 March, the playing registrations of certain footballers
have been disposed of. Total net proceeds were £4,369,000 and the associated net book value was £60,000. Additionally, solidarity
contributions, training compensation, sell-on fees and contingent consideration totalling £4,395,000 became receivable in respect
of the previous disposal of playing registrations.
Also subsequent to 31 March 2024, the playing
registrations of certain players and football management staff were acquired or extended for a total consideration, including associated
costs, of £6,075,000. Sell-on fees and contingent consideration totalling £118,000 became payable in respect of previous
playing registrations.
33.2 Repayment
of revolving facilities
On 8 May 2024, a repayment under our bilateral
revolving facility with Bank of America of £10 million was made. This took the total drawdown as of 8 May 2024 to £130
million from available facilities of £300 million.
On 10 June 2024, a further repayment of
the Group’s revolving facilities of £100 million was made. This comprised of a repayment of £70 million under our initial
facility with Bank of America and a £30 million repayment under our facility with Santander. This took the total drawdown as of
10 June 2024 to £30 million from available facilities of £300 million.
33.3 Changes
to management personnel
On 30 April 2024, the Group announced further
changes to its executive leadership. By mutual consent, Patrick Stewart, interim Chief Executive Officer, and Cliff Baty, Chief Financial
Officer, decided to leave the club as of the end of the season. Patrick has been replaced as Chief Executive Officer on an interim basis
by Jean Claude Blanc until the arrival of Omar Berrada on July 13th. Cliff Baty has been replaced as Chief Financial Officer by
Roger Bell.
33.4 Extension
of revolving facilities
On 28 June 2024, we extended our initial
revolving facility of £150 million to expire on 25 June 2027. This is consistent with our other revolving facilities, resulting
in the total capacity of £300 million now expiring on 25 June 2027.
34 Related party transactions
As of 31 March 2024, trusts and other entities
controlled by six lineal descendants of Mr. Malcolm Glazer collectively own 3.16% of our issued and outstanding Class A ordinary
shares and 72.31% of our issued and outstanding Class B ordinary shares, representing 69.14% of the voting power of our outstanding
capital stock.
As of 31 March 2024, Trawlers Limited, an
entity wholly owned by Sir Jim Ratcliffe, owns 27.69% of our issued and outstanding Class A ordinary shares and 27.69% of our issued
and outstanding Class B ordinary shares, representing 27.69% of the voting power of our outstanding capital stock.
Manchester United plc
Notes to the interim consolidated financial statements (continued)
- unaudited
35 Subsidiaries
The following companies are all subsidiary undertakings
of the Company as of 31 March 2024:
Subsidiaries | |
Principal activity | |
% of ownership
interest |
Red Football Finance Limited* | |
Dormant company | |
100 |
Red Football Holdings Limited* | |
Holding company | |
100 |
Red Football Shareholder Limited | |
Holding company | |
100 |
Red Football Joint Venture Limited | |
Holding company | |
100 |
Red Football Limited | |
Holding company | |
100 |
Red Football Junior Limited | |
Holding company | |
100 |
Manchester United Limited | |
Holding company | |
100 |
Alderley Urban Investments Limited | |
Property investment | |
100 |
Manchester United Football Club Limited | |
Professional football club | |
100 |
Manchester United Women’s Football Club Limited | |
Professional football club | |
100 |
Manchester United Interactive Limited | |
Dormant company | |
100 |
MU 099 Limited | |
Dormant company | |
100 |
MU Commercial Holdings Limited | |
Non-trading company | |
100 |
MU Commercial Holdings Junior Limited | |
Non-trading company | |
100 |
MU Finance Limited | |
Non-trading company | |
100 |
MU RAML Limited | |
Retail and licensing company | |
100 |
MUTV Limited | |
Media company | |
100 |
RAML USA LLC | |
Dormant company | |
100 |
* Direct investment of Manchester United plc,
others are held by subsidiary undertakings.
All of the above are incorporated and operate
in England and Wales, with the exception of Red Football Finance Limited which is incorporated and operates in the Cayman Islands and
RAML USA LLC which is incorporated in the United States.
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