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Manchester United PLC Reports Third Quarter Fiscal 2020 Results and Provides COVID-19 Impact

Released : 05/21/2020

Key Points

  • The COVID-19 pandemic and related lockdown measures resulted in the suspension of all Premier League, FA Cup and UEFA Europa League matches since 13 March
  • In compliance with relevant guidelines, Premier League clubs have resumed training on 19 May in preparation for potential restart of the 2019/20 season in June; Europa League to potentially restart in August
  • The Club and its Foundation have committed significant resources to COVID-19 responses including support for local hospitals, food banks, schools and other community-based initiatives

MANCHESTER, England--(BUSINESS WIRE)-- Manchester United (NYSE: MANU; the “Company” and the “Group”) – one of the most popular and successful sports teams in the world - today announced financial results for the 2020 fiscal third quarter ended 31 March 2020.

Management Commentary

Ed Woodward, Executive Vice Chairman, commented, “Our focus remains on the health and well-being of our colleagues, fans and partners around the world and we are extremely proud of how those connected to the club have responded during this crisis. Since the start of the pandemic, Manchester United and our Foundation have provided assistance to hospitals, charities and schools in our communities, as well as support for frontline workers and vulnerable fans. These actions reflect our core values as a club and the resilience through adversity that we have demonstrated many times throughout our long history and will do so again to weather these current challenges. In that spirit, we look forward to the team safely returning to the pitch and building on the exciting momentum that Ole and the players had previously achieved, while taking all necessary steps to protect public health. Our thoughts remain with all those affected during this unprecedented time.”


Fiscal 2020 Guidance

The Company is withdrawing its previously issued Fiscal 2020 Revenue and Adjusted EBITDA guidance. Given ongoing uncertainty due to COVID-19 and the evolving related economic and financial consequences, the Company is not providing updated guidance at this time.

Key Financials (unaudited)

£ million (except (loss)/earnings per share)

Three months ended

31 March

 

Nine months ended

31 March

 

 

2020

2019

Change

2020

2019

Change

Commercial revenue

68.6

66.6

3.0%

219.6

208.4

5.4%

Broadcasting revenue

26.0

53.8

(51.7%)

123.6

200.3

(38.3%)

Matchday revenue

29.1

31.7

(8.2%)

84.3

87.0

(3.1%)

Total revenue

123.7

152.1

(18.7%)

427.5

495.7

(13.8%)

Adjusted EBITDA(1)

27.9

41.2

(32.3%)

134.8

174.9

(22.9%)

Operating (loss)/profit

(3.3)

14.2

-

44.2

72.1

(38.7%)

 

(Loss)/profit for the period (i.e. net (loss)/income)(2)

(22.8)

7.7

-

13.3

41.1

(67.6%)

Basic (loss)/earnings per share (pence)

(13.89)

4.65

-

8.07

24.96

(67.7%)

Adjusted (loss)/profit for the period (i.e. adjusted net (loss)/income)(1)

(7.3)

7.8

-

22.4

61.1

(63.3%)

Adjusted basic (loss)/earnings per share (pence)(1)

(4.42)

4.72

-

13.61

37.12

(63.3%)

 

Net debt(1)/(2)

429.1

301.7

42.2%

429.1

301.7

42.2%

(1) Adjusted EBITDA, adjusted (loss)/profit for the period, adjusted basic (loss)/earnings per share and net debt are non-IFRS measures. See “Non-IFRS Measures: Definitions and Use” on page 6 and the accompanying Supplemental Notes for the definitions and reconciliations for these non-IFRS measures and the reasons we believe these measures provide useful information to investors regarding the Group’s financial condition and results of operations.

(2) The gross USD debt principal remains unchanged.


COVID-19 Impact

Manchester United has taken a range of measures to support its communities in response to the COVID-19 pandemic, including donations to food banks and outreach to elderly and disabled supporters. In addition, the Manchester United Foundation has committed over £1M to community initiatives, including the supply of 60,000 meals for health workers in local hospitals and support for schools and vulnerable children across Greater Manchester. The Club has also used its media platforms to deliver public health messages and to support frontline workers around the world.

Operationally, the impact of the pandemic and measures to prevent further spread continues to disrupt its businesses in a number of ways, most significantly in Broadcasting and Matchday operations. Old Trafford and its flagship Megastore operations have been closed to visitors since 20 March 2020 and Museum, Stadium Tour and Red Café operations have been closed since 17 March 2020. Government imposed restrictions have also resulted in the postponement of the Premier League, UEFA competitions and FA Cup competition since 13 March 2020. Postponement of the Premier League and changes to match scheduling has resulted in a reduction in the total broadcasting revenue expected for the season and has impacted broadcasting revenue during the quarter for matches played to date. In addition, during the quarter, Broadcasting and Matchday revenues were impacted due to the postponement of three matches: one away Premier League match, one home Round of 16 Europa League match and one away FA cup quarter-final match.

Working Capital and Liquidity

As of 31 March 2020, the Company had £90.3m of cash balances together with access to an additional £150m available under the Company’s revolving credit facility. This provides financial flexibility to support the Club through the disruption caused by COVID-19.


Revenue Analysis

Commercial
Commercial revenue for the quarter was £68.6 million, an increase of £2.0 million, or 3.0%, over the prior year quarter.

  • Sponsorship revenue was £44.7 million, an increase of £3.1 million, or 7.5%, over the prior year quarter, primarily due to new sponsorship deals.
  • Retail, Merchandising, Apparel & Product Licensing revenue was £23.9 million, a decrease of £1.1 million, or 4.4%, over the prior year quarter, in part due to the closure of the Old Trafford Megastore mid-March.

Broadcasting
Broadcasting revenue for the quarter was £26.0 million, a decrease of £27.8 million, or 51.7%, over the prior year quarter, primarily due to an estimated £15.0m Premier League rebate due to broadcasters, following delay and broadcast schedule changes to the 2019/20 football season, non-participation in the UEFA Champions League, and the impact of playing two fewer Premier League away games.

Matchday
Matchday revenue for the quarter was £29.1 million, a decrease of £2.6 million, or 8.2%, over the prior year quarter, including the impact of postponement of the Round of 16 Europa League home match and closure of non-match day operations in mid-March.


Other Financial Information

Operating expenses
Total operating expenses for the quarter were £131.8 million, a decrease of £12.4 million, or 8.6%, over the prior year quarter.

Employee benefit expenses
Employee benefit expenses for the quarter were £69.5 million, a decrease of £15.3 million, or 18.0%, over the prior year quarter, due to the impact of net player disposals, loan deals and reductions in player salaries as a result of non-participation in the UEFA Champions League.

Other operating expenses
Other operating expenses for the quarter were £26.3 million, an increase of £0.2 million, or 0.8%, over the prior year quarter.

Depreciation and amortization
Depreciation for the quarter was £3.7 million, an increase of £0.9 million, or 32.1%, over the prior year quarter. Amortization for the quarter was £32.3 million, an increase of £1.8 million, or 5.9 %, over the prior year quarter. The unamortized balance of registrations at 31 March 2020 was £356.4 million.

Profit on disposal of intangible assets
Profit on disposal of intangible assets for the quarter was £4.8 million, compared to £6.3 million for the prior year quarter.

Net finance costs
Net finance costs for the quarter were £25.3 million, compared to £3.1 million in the prior year quarter. The increase was due to unrealized foreign exchange losses on unhedged USD borrowings.

Income tax
The income tax credit for the quarter was £5.8 million, compared to a charge of £3.4 million in the prior year quarter.

Cash flows
Overall cash and cash equivalents (including the effects of exchange rate movements) decreased by £10.6 million in the quarter, compared to an increase of £3.5 million in the prior year quarter.

Net cash inflow from operating activities for the quarter was £26.3 million, an increase of £4.1 million over the prior year quarter.

Net capital expenditure on property, plant and equipment for the quarter was £4.7 million, an increase of £3.1 million over the prior year quarter.

Net capital expenditure on intangible assets for the quarter was £21.2 million, an increase of £19.2 million over the prior year quarter.

Net debt
Net Debt as of 31 March 2020 was £429.1 million, an increase of £127.4 million over the prior year quarter, due to an overall decrease in cash and cash equivalents and adverse movements in the GBP:USD exchange rate. The gross USD debt principal remains unchanged.


Conference Call Details

The Company’s conference call to review fiscal 2020 third quarter results will be broadcast live over the internet today, 21 May 2020 at 8:00 a.m. Eastern Time and will be available on Manchester United’s investor relations website at http://ir.manutd.com. Thereafter, a replay of the webcast will be available for thirty days.

About Manchester United

Manchester United is one of the most popular and successful sports teams in the world, playing one of the most popular spectator sports on Earth. Through our 142-year football heritage we have won 66 trophies, enabling us to develop what we believe is one of the world’s leading sports and entertainment brands with a global community of 1.1 billion fans and followers. Our large, passionate and highly engaged fan base provides Manchester United with a worldwide platform to generate significant revenue from multiple sources, including sponsorship, merchandising, product licensing, broadcasting and matchday initiatives which in turn, directly fund our ability to continuously reinvest in the club.

Cautionary Statements

This press release contains forward‑looking statements. You should not place undue reliance on such statements because they are subject to numerous risks and uncertainties relating to the Company’s operations and business environment, all of which are difficult to predict and many are beyond the Company’s control. Forward-looking statements include information concerning certain expectations and uncertainties related to the COVID-19 pandemic and the Company’s possible or assumed future results of operations, including descriptions of its business strategy. These statements often include words such as “may,” “might,” “will,” “could,” “would,” “should,” “expect,” “plan,” “anticipate,” “intend,” “seek,” “believe,” “estimate,” “predict,” “potential,” “continue,” “contemplate,” “possible” or similar expressions. The forward-looking statements contained in this press release are based on our current expectations and estimates of future events and trends, which affect or may affect our businesses and operations. You should understand that these statements are not guarantees of performance or results. They involve known and unknown risks, uncertainties and assumptions. Although the Company believes that these forward-looking statements are based on reasonable assumptions, you should be aware that many factors could affect its actual financial results or results of operations and could cause actual results to differ materially from those in these forward-looking statements. These factors are more fully discussed in the “Risk Factors” section and elsewhere in the Company’s Registration Statement on Form F-1, as amended (File No. 333-182535) and the Company’s Annual Report on Form 20-F (File No. 001-35627) as supplemented by the risk factors contained in the Company’s other filings with the Securities and Exchange Commission.


Non-IFRS Measures: Definitions and Use

1. Adjusted EBITDA
Adjusted EBITDA is defined as profit for the period before depreciation, amortization, profit/loss on disposal of intangible assets, exceptional items, net finance costs/income, and tax.

Adjusted EBITDA is useful as a measure of comparative operating performance from period to period and among companies as it is reflective of changes in pricing decisions, cost controls and other factors that affect operating performance, and it removes the effect of our asset base (primarily depreciation and amortization), material volatile items (primarily profit on disposal of intangible assets and exceptional items), capital structure (primarily finance costs), and items outside the control of our management (primarily taxes). Adjusted EBITDA has limitations as an analytical tool, and you should not consider it in isolation, or as a substitute for an analysis of our results as reported under IFRS as issued by the IASB. A reconciliation of profit for the period to adjusted EBITDA is presented in supplemental note 2.

2. Adjusted (loss)/profit for the period (i.e. adjusted net (loss)/income)
Adjusted (loss)/profit for the period is calculated, where appropriate, by adjusting for charges/credits related to exceptional items, foreign exchange gains/losses on unhedged US dollar denominated borrowings, and fair value movements on embedded foreign exchange derivatives, adding/subtracting the actual tax expense/credit for the period, and subtracting/adding the adjusted tax expense/credit for the period (based on an normalized tax rate of 21%; 2019: 21%). The normalized tax rate of 21% is the current US federal corporate income tax rate.

In assessing the comparative performance of the business, in order to get a clearer view of the underlying financial performance of the business, it is useful to strip out the distorting effects of the items referred to above and then to apply a ‘normalized’ tax rate (for both the current and prior periods) of the weighted average US federal corporate income tax rate of 21% (2019: 21%) applicable during the financial year. A reconciliation of (loss)/profit for the period to adjusted (loss)/profit for the period is presented in supplemental note 3.

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

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


Key Performance Indicators

 

Three months ended

Nine months ended

31 March

31 March

 

2020

2019

2020

2019

Commercial % of total revenue

55.5%

43.8%

51.4%

42.0%

Broadcasting % of total revenue

21.0%

35.4%

28.9%

40.4%

Matchday % of total revenue

23.5%

20.8%

19.7%

17.6%

Home Matches Played

 

 

 

 

PL

5

5

15

15

UEFA competitions

1

1

4

4

Domestic Cups

2

1

4

2

Away Matches Played

 

 

 

 

PL

4

6

14

16

UEFA competitions

2

1

5

4

Domestic Cups

4

3

5

3

 

Other

 

 

 

 

Employees at period end

997

950

997

950

Employee benefit expenses % of revenue

56.2%

55.8%

49.3%

48.4%

Contacts 

Investor Relations:

Corinna Freedman

Head of Investor Relations

+44 161 868 8431

[email protected] 

 

Media Relations:

Charlie Brooks

Director of Communications

+44 161 868 8148

[email protected]

 

 

Sard Verbinnen & Co

Jim Barron / Devin Broda

+ 1 212 687 8080

[email protected]

[email protected]


CONSOLIDATED STATEMENT OF PROFIT OR LOSS
(unaudited; in £ thousands, except per share and shares outstanding data)

 

Three months ended

31 March

Nine months ended

31 March

 

2020

2019

2020

2019

Revenue from contracts with customers

123,711

152,068

427,537

495,706

Operating expenses

(131,783)

(144,181)

(399,457)

(448,030)

Profit on disposal of intangible assets

4,765

6,378

16,067

24,457

Operating (loss)/profit

(3,307)

14,265

44,147

72,133

Finance costs

(25,758)

(5,361)

(19,701)

(16,877)

Finance income

511

2,213

1,274

2,257

Net finance costs

(25,247)

(3,148)

(18,427)

(14,620)

(Loss)/profit before income tax

(28,554)

11,117

25,720

57,513

Income tax credit/(expense)

5,701

(3,464)

(12,438)

(16,444)

(Loss)/profit for the period

(22,853)

7,653

13,282

41,069

 

 

 

 

 

Basic (loss)/earnings per share:

 

 

 

 

Basic (loss)/earnings per share (pence)

(13.89)

4.65

8.07

24.96

Weighted average number of ordinary shares used
as the denominator in calculating basic
(loss)/earnings per share (thousands)

164,544

164,526

164,563

164,526

Diluted (loss)/earnings per share:

 

 

 

 

Diluted (loss)/earnings per share (pence)(1)

(13.89)

4.65

8.06

24.94

Weighted average number of ordinary shares and
potential ordinary shares used as the denominator in
calculating diluted (loss)/earnings per share
(thousands) (1)

164,544

164,664

164,746

164,664

(1) For the three months ended 31 March 2020 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.


CONSOLIDATED BALANCE SHEET
(unaudited; in £ thousands)

 

As of

 

31 March

2020

30 June

2019

31 March

2019

ASSETS

 

 

 

Non-current assets

 

 

 

Property, plant and equipment

254,994

246,032

246,396

Right-of-use assets(1)

4,984

-

-

Investment properties

24,703

24,979

13,739

Intangible assets

784,746

768,857

718,551

Deferred tax asset

54,061

58,415

57,057

Trade receivables

42,429

9,889

9,964

Income tax receivable

-

-

547

Derivative financial instruments

1,134

30

777

 

1,167,051

1,108,202

1,047,031

Current assets

 

 

 

Inventories

2,403

2,130

2,083

Prepayments

10,868

13,030

13,007

Contract assets – accrued revenue

42,700

39,532

53,073

Trade receivables

41,106

23,851

118,983

Other receivables

121

1,188

436

Income tax receivable

1,223

643

598

Derivative financial instruments

690

312

511

Cash and cash equivalents

90,251

307,637

193,855

 

189,362

388,323

382,546

Total assets

1,356,413

1,496,525

1,429,577

(1) Relates to adoption of IFRS 16, “Leases” with effect from 1 July 2019. See supplemental note 5 for further details.


CONSOLIDATED BALANCE SHEET (continued)
(unaudited; in £ thousands)

 

As of

 

31 March

2020

30 June

2019

31 March

2019

EQUITY AND LIABILITIES

 

 

 

Equity

 

 

 

Share capital

53

53

53

Share premium

68,822

68,822

68,822

Treasury shares

(3,720)

-

-

Merger reserve

249,030

249,030

249,030

Hedging reserve

(35,521)

(35,544)

(30,848)

Retained earnings

135,391

132,841

166,751

 

414,055

415,202

453,808

Non-current liabilities

 

 

 

Deferred tax liabilities

37,126

31,865

33,678

Contract liabilities - deferred revenue

25,562

33,354

51,079

Trade and other payables

51,980

79,183

45,559

Borrowings

517,075

505,779

493,336

Lease liabilities(1)

3,416

-

-

Derivative financial instruments

8,538

2,298

21

 

643,697

652,479

623,673

Current liabilities

 

 

 

Contract liabilities - deferred revenue

99,240

190,146

156,138

Trade and other payables

191,214

230,386

185,733

Income tax liabilities

4,214

2,859

7,898

Borrowings

2,302

5,453

2,197

Lease liabilities(1)

1,687

-

-

Derivative financial instruments

4

-

130

 

298,661

428,844

352,096

Total equity and liabilities

1,356,413

1,496,525

1,429,577

(1) Relates to adoption of IFRS 16, “Leases” with effect from 1 July 2019. See supplemental note 5 for further details.


CONSOLIDATED STATEMENT OF CASH FLOWS
(unaudited; in £ thousands)

 

Three months ended
31 March

Nine months ended
31 March

 

2020

2019

2020

2019

Cash flows from operating activities

 

 

 

 

Cash generated from operations (see supplemental note 4)

34,333

29,803

15,894

112,140

Interest paid

(7,944)

(7,679)

(17,895)

(17,186)

Debt finance costs paid

-

-

(555)

-

Interest received

115

697

1,165

2,052

Tax paid

(200)

(578)

(1,897)

(2,388)

Net cash inflow/(outflow) from operating activities

26,304

22,243

(3,288)

94,618

Cash flows from investing activities

 

 

 

 

Payments for property, plant and equipment

(4,662)

(1,559)

(17,692)

(8,877)

Payments for intangible assets

(24,419)

(14,809)

(211,730)

(159,865)

Proceeds from sale of intangible assets

3,225

12,709

25,234

37,892

Net cash outflow from investing activities

(25,856)

(3,659)

(204,188)

(130,850)

Cash flows from financing activities

 

 

 

 

Acquisition of treasury shares

(3,372)

-

(3,372)

-

Repayment of borrowings

-

-

-

(3,750)

Principal elements of lease payments(1)

(399)

-

(1,160)

-

Dividends paid

(11,323)

(11,610)

(11,323)

(11,610)

Net cash outflow from financing activities

(15,094)

(11,610)

(15,855)

(15,360)

Net (decrease)/increase in cash and cash equivalents

(14,646)

6,974

(223,331)

(51,592)

Cash and cash equivalents at beginning of period

100,856

190,395

307,637

242,022

Effects of exchange rate changes on cash and cash equivalents

4,041

(3,514)

5,945

3,425

Cash and cash equivalents at end of period

90,251

193,855

90,251

193,855

(1) Relates to adoption of IFRS 16, “Leases” with effect from 1 July 2019. See supplemental note 5 for further details.


SUPPLEMENTAL NOTES

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


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

 

Three months ended
31 March

Nine months ended
31 March

 

2020

£’000

2019

£’000

2020

£’000

2019

£’000

(Loss)/profit for the period

(22,853)

7,653

13,282

41,069

Adjustments:

 

 

 

 

Income tax (credit)/expense

(5,701)

3,464

12,438

16,444

Net finance costs

25,247

3,148

18,427

14,620

Profit on disposal of intangible assets

(4,765)

(6,378)

(16,067)

(24,457)

Exceptional items

-

-

-

19,599

Amortization

32,346

30,434

95,790

99,005

Depreciation

3,683

2,852

10,951

8,631

Adjusted EBITDA

27,957

41,173

134,821

 

174,911


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

 

 

Three months ended
31 March

Nine months ended
31 March

 

 

2020

£’000

2019

£’000

2020

£’000

2019

£’000

(Loss)/profit for the period

(22,853)

7,653

13,282

41,069

Exceptional items

-

-

-

19,599

Foreign exchange losses/(gains) on unhedged US dollar denominated borrowings

19,664

(1,430)

2,590

105

Fair value movement on embedded foreign exchange derivatives

(307)

138

39

82

Income tax (credit)/expense

(5,701)

3,464

12,438

16,444

Adjusted (loss)/profit before income tax

(9,197)

9,825

28,349

77,299

 

Adjusted income tax credit/(expense) (using a normalized tax rate of 21% (2019: 21%))

1,931

(2,063)

(5,953)

(16,233)

Adjusted (loss)/profit for the period (i.e. adjusted net (loss)/income)

(7,266)

7,762

22,396

61,066

 

 

 

 

 

Adjusted basic (loss)/earnings per share:

 

 

 

 

Adjusted basic (loss)/earnings per share (pence)

(4.42)

4.72

13.61

37.12

Weighted average number of ordinary shares used as the denominator in calculating adjusted basic (loss)/earnings per share (thousands)

164,544

164,526

164,563

164,526

Adjusted diluted (loss)/earnings per share:

 

 

 

 

Adjusted diluted (loss)/earnings per share

(pence) (1)

(4.42)

4.71

13.59

37.09

Weighted average number of ordinary shares and potential ordinary shares used as the denominator in calculating adjusted diluted (loss)/earnings per share (thousands) (1)

164,544

164,664

164,746

164,664

(1) For the three months ended 31 March 2020 potential ordinary shares are anti-dilutive, as their inclusion in the adjusted diluted loss per share calculation would reduce the loss per share, and hence have been excluded.


4 Cash generated from operations

 

Three months ended
31 March

Nine months ended
31 March

 

2020

£’000

2019

£’000

2020

£’000

2019

£’000

(Loss)/profit for the period

(22,853)

7,653

13,282

41,069

Income tax (credit)/expense

(5,701)

3,464

12,438

16,444

(Loss)/profit before income tax

(28,554)

11,117

25,720

57,513

Adjustments for:

 

 

 

 

Depreciation

3,683

2,852

10,951

8,631

Amortization

32,346

30,434

95,790

99,005

Profit on disposal of intangible assets

(4,765)

(6,378)

(16,067)

(24,457)

Net finance costs

25,247

3,148

18,427

14,620

Non-cash employee benefit expense – equity-settled share-based payments

226

164

591

535

Foreign exchange (gains)/losses on operating activities

(640)

(94)

(926)

88

Reclassified from hedging reserve

3,177

1,167

8,988

4,011

Changes in working capital:

 

 

 

 

Inventories

132

527

(273)

(667)

Prepayments

2,343

(2,687)

2,162

(2,145)

Contract assets – accrued revenue

35,398

26,423

(3,168)

(15,055)

Trade receivables

(14,475)

(91,283)

(5,971)

(9,564)

Other receivables

493

1,161

1,067

(329)

Contract liabilities – deferred revenue

(42,380)

44,603

(98,698)

(10,380)

Trade and other payables

22,102

8,649

(22,699)

(9,666)

Cash generated from operations

34,333

29,803

15,894

112,140


5 Adoption of IFRS 16
The Group adopted IFRS 16, “Leases” with effect from 1 July 2019. The Group has elected to apply the ‘simplified approach’ on initial adoption of IFRS 16, consequently comparative information has not been restated.

The new treatment of leases has resulted in an increase in non-current assets and financial liabilities as well as increasing underlying EBITDA, offset by an increase in depreciation and an increase in finance charges.

The Group expects that adjusted EBITDA for the year ended 30 June 2020 will increase by approximately £1.7 million. Profit before tax is expected to decrease by approximately £0.1 million.

Lease payments were previously presented as operating cash flows. Lease payments are now split into payments for the principal portion of the lease liability which are presented as financing cash flows, and payments for the interest portion of the lease liability which are presented as operating cash flows. There is no impact on overall cash flow.

Note 3 and note 15 to the interim consolidated financial statements for the three and nine months ended 31 March 2020 provide further detail on the adoption of IFRS 16 and the impact on the consolidated income statement, consolidated balance sheet, and consolidated statement of cash flows.

Investor Relations:

Corinna Freedman

Head of Investor Relations

+44 161 868 8431

[email protected]

Media Relations:

Charlie Brooks

Director of Communications

+44 161 868 8148

[email protected]

Sard Verbinnen & Co

Jim Barron / Devin Broda

+ 1 212 687 8080

[email protected]

[email protected]

Source: Manchester United PLC