Manchester United Revenue Balance Sheet 2023

Manchester United Annual Report

Revenue Analysis

Commercial
Commercial revenue for the year was £257.8 million, an increase of £25.6 million, or 11.0%, over the prior year.

  • Sponsorship revenue was £147.9 million, an increase of £7.7 million, or 5.5%, over the prior year, primarily due to the impact of new sponsorship agreements. The prior year was affected by COVID-19 related variations; and
  • Retail, Merchandising, Apparel & Product Licensing revenue was £109.9 million, an increase of £17.9 million, or 19.5%, over the prior year, primarily due to the closure of the Megastore in the prior year and the return of fans in the current year.

For the quarter, commercial revenue was £63.4 million, an increase of £11.6 million, or 22.4%, over the prior year quarter.

  • Sponsorship revenue was £37.2 million, an increase of £7.1 million, or 23.6% over the prior year quarter, primarily due to the impact of new sponsorship agreements; and
  • Retail, Merchandising, Apparel & Product Licensing revenue was £26.2 million, an increase of £4.5 million, or 20.7%, over the prior year quarter, primarily due to the return of fans and increased marketing activity.

Broadcasting
Broadcasting revenue for the year was £214.9 million, a decrease of £39.9 million, or 15.7%, over the prior year, primarily due to playing twenty-two fewer home and away games across all competitions compared to the prior year.

Broadcasting revenue for the quarter was £33.7 million, a decrease of £6.2 million, or 15.5%, over the prior year quarter, primarily due to playing five fewer home and away games across all competitions and the impact of our men’s first team finishing 6th in the Premier League compared to 2nd in the prior year.

Matchday
Matchday revenue for the year was £110.5 million, an increase of £103.4 million, or 1456.3%, over the prior year, due to the return of fans to Old Trafford. In the prior year, all matches prior to the final home match of the season were played behind closed doors due to COVID-19 restrictions.

Matchday revenue for the quarter was £21.4 million, an increase of £19.1 million, or 830.4%, over the prior year quarter, due to the return of fans to Old Trafford.

Other Financial Information

Operating expenses
Total operating expenses for the year were £692.6 million, an increase of £154.2 million, or 28.6%, over the prior year.

Employee benefit expenses
Employee benefit expenses for the year were £384.2 million, an increase of £61.6 million, or 19.1%, over the prior year, due to investment in the first team playing squad.

Other operating expenses
Other operating expenses for the year were £117.9 million, an increase of £41.5 million, or 54.3%, over the prior year. This includes the impact of all home games being played in front of a full capacity crowd and costs related to the increased activity at the Old Trafford Megastore. In the prior year, all but one home game were played behind closed doors.

Depreciation, impairment and amortization
Depreciation and impairment for the year was £14.3 million, a decrease of £0.7 million, or 4.7%, over the prior year. Amortization for the year was £151.5 million, an increase of £27.1 million, or 21.8%, over the prior year. The unamortized balance of registrations was £316.2 million.

Exceptional items
Exceptional items for the year were a cost of £24.7 million. This cost includes compensation due to former men’s first team managers, certain members of the playing, coaching and scouting staff, and certain non-playing staff. The cost also includes additional contributions we expect to pay towards the Football League pension scheme deficit based upon the latest actuarial valuation. Exceptional items for the prior year were £nil.

Profit on disposal of intangible assets
Profit on disposal of intangible assets for the year was £21.9 million, compared to £7.4 million for the prior year.

Net finance (costs)/income
Net finance costs for the year were £62.2 million, compared to net finance income of £12.9 million for the prior year, an unfavorable movement of £75.1 million, primarily due to an unfavorable swing in foreign exchange rates resulting in unrealized foreign exchange losses on unhedged USD borrowings in the current year compared to unrealized foreign exchange gains in the prior year.

Income tax
The income tax credit for the year was £34.1 million, compared to an expense of £68.2 million in the prior year. The credit in the year is primarily a result of deferred tax assets recognised in respect of losses arising in the year. The prior year expense arose from the write off of US deferred tax assets.

Cash flows
Overall cash and cash equivalents (including the effects of exchange rate movements) increased by £10.6 million in the year, compared to an increase of £59.2 million in the prior year.

Net cash inflow from operating activities for the year was £96.4 million, a decrease of £16.7 million compared to a net cash inflow of £113.1 million for the prior year. This is primarily due to reduced broadcasting revenues as a result of fewer games played in the year, partially offset by the return of fans to Old Trafford.

Net capital expenditure on property, plant and equipment for the year was £8.3 million, an increase of £2.1 million over the prior year.

Net capital expenditure on intangible assets for the year was £85.1 million, a decrease of £7.1 million over the prior year.

Net cash inflow from financing activities for the year was £5.0 million, compared to net cash inflow of £47.6 million in the prior year. Current year cash inflow includes a drawdown of £40.0 million on our revolving facilities, net of dividends paid of £33.6 million.

Net debt
Net Debt was £514.9 million, compared to £419.5 million an increase of £95.4 million primarily due to £64.6 million of unrealized foreign exchange losses on retranslation of USD borrowings in addition to a further drawdown on our revolving facilities of £40.0 million, partially offset by a £10.5 million increase in cash and cash equivalents.

CONSOLIDATED STATEMENT OF PROFIT OR LOSS

(unaudited; in £ thousands, except per share and shares outstanding data)

Revenue from contracts with customers

583,201

494,117

Operating expenses

(692,520

)

(538,424

)

Profit on disposal of intangible assets

21,935

7,381

Operating loss

(87,384

)

(36,926

)

Finance costs

(85,915

)

(36,411

)

Finance income

23,676

49,310

Net finance (costs)/income

(62,239

)

12,899

Loss before tax

(149,623

)

(24,027

)

Income tax credit/(expense)

34,113

(68,189

)

Loss for the period

(115,510

)

(92,216

)

Basic and diluted loss per share:

Basic and diluted loss per share (pence) (1)

(70.86

)

(56.60

)

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

163,001

162,939

CONSOLIDATED BALANCE SHEET

(unaudited; in £ thousands)

ASSETS

Non-current assets

Property, plant and equipment

242,661

Right-of-use assets

4,072

Investment properties

20,273

Intangible assets

743,278

Trade receivables

29,757

Derivative financial instruments

16,462

1,056,503

Current assets

Inventories

2,200

Prepayments

15,534

Contract assets – accrued revenue

36,239

Trade receivables

49,210

Other receivables

1,569

Income tax receivable

4,590

Derivative financial instruments

6,597

Cash and cash equivalents

121,223

237,162

Total assets

1,293,665

CONSOLIDATED BALANCE SHEET (continued)

(unaudited; in £ thousands)

EQUITY AND LIABILITIES

Equity

Share capital

53

Share premium

68,822

Treasury shares

(21,305

)

)

Merger reserve

249,030

Hedging reserve

950

)

Retained (deficit)/earnings

(170,042

)

)

127,508

Non-current liabilities

Deferred tax liabilities

7,402

Contract liabilities – deferred revenue

16,697

Trade and other payables

102,347

Borrowings

530,365

Lease liabilities

2,869

Derivative financial instruments

49

Provisions

11,586

671,315

Contract liabilities – deferred revenue

165,847

Trade and other payables

220,587

Income tax liabilities

Borrowings

105,757

Lease liabilities

1,561

Derivative financial instruments

32

Provisions

1,058

494,842

Total equity and liabilities

1,293,665

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