
Report Highlights Manchester United reported strong Q2 FY2021 financial results, driven by operational and strategic developments including squad strengthening, digital engagement growth, and anticipated fan return Key Financial Indicators | Indicator | Value | | :--- | :--- | | 2Q Fiscal 2021 Revenues | £172.8 million | | 2Q Fiscal 2021 Adjusted EBITDA | £70.3 million | | 2Q Fiscal 2021 Operating Profit | £48.5 million | - The club anticipates a staggered return of fans from May as UK lockdown measures ease1 - Squads were strengthened with the addition of Amad Diallo (men's) and Maria Thorisdottir (women's)1 - Mason Greenwood signed a new contract until 20251 - Digital engagement growth led to record e-commerce sales for all three 2020/21 Men's kits1 - The club's TikTok launch in November achieved the fastest growing following of any football club on the platform1 Management Commentary Executive Vice Chairman Ed Woodward expressed confidence in a return to normality, highlighting the club's resilience and on-pitch progress across all teams despite pandemic challenges - Management is confident in a path towards normality, including the return of fans, due to the rapid rollout of vaccines in the UK2 - The club has demonstrated 'tremendous resilience' through the pandemic, supported by its strong commercial business2 - Management is optimistic about the future, citing the progress made by the men's team under Ole Gunnar Solskjær, as well as the thriving Academy and Women's team2 Financial Performance Q2 FY2021 total revenue increased by 2.6% to £172.8 million, driven by broadcasting revenue offsetting declines in matchday and commercial revenue, leading to a 32.9% rise in operating profit Key Financials Summary A summary of Manchester United's key financial metrics for Q2 and H1 FY2021 shows changes in total revenue, adjusted EBITDA, operating profit, and earnings per share Key Financials Summary Table | £ million (except per share) | Three months ended 31 Dec 2020 | Three months ended 31 Dec 2019 | Change | Six months ended 31 Dec 2020 | Six months ended 31 Dec 2019 | Change | | :--- | :--- | :--- | :--- | :--- | :--- | :--- | | Total revenue | 172.8 | 168.4 | 2.6% | 281.8 | 303.8 | (7.2%) | | Adjusted EBITDA | 70.3 | 72.1 | (2.5%) | 91.1 | 106.9 | (14.8%) | | Operating profit | 48.5 | 36.5 | 32.9% | 21.4 | 47.5 | (54.9%) | | Profit for the period | 63.9 | 35.0 | 82.6% | 33.6 | 36.1 | (6.9%) | | Basic earnings per share (p) | 39.17 | 21.27 | 84.2% | 20.60 | 21.96 | (6.2%) | Revenue Analysis An analysis of revenue streams reveals significant growth in broadcasting revenue due to UEFA Champions League participation, offsetting declines in commercial and matchday revenues Revenue Stream Performance | Revenue Stream | Q2 FY2021 (£M) | YoY Change | Reason for Change | | :--- | :--- | :--- | :--- | | Broadcasting | 108.7 | +68.0% | Participation in UEFA Champions League | | Commercial | 62.6 | -11.3% | One-off sponsorship credit in prior year and shirt sponsorship extension impact | | Matchday | 1.5 | -95.5% | All matches played behind closed doors due to COVID-19 | Operating Expenses and Other Financial Items Total operating expenses increased due to higher employee benefits, while other operating expenses decreased, and net finance income improved due to foreign exchange gains - Total operating expenses for the quarter increased by 5.6% YoY to £138.6 million12 - Employee benefit expenses rose 15.2% to £81.7 million, due to contracted player salary increases from UEFA Champions League participation and investment in the first team squad12 - Other operating expenses decreased by 18.1% to £20.8 million, primarily due to reduced business activity and matches being played behind closed doors13 - Net finance income was £19.7 million, up from £15.3 million in the prior year quarter, driven by foreign exchange gains on unhedged USD borrowings16 Balance Sheet and Cash Flow As of December 31, 2020, the company maintained £80.6 million in cash and access to £140.0 million in credit facilities, despite a £64.2 million increase in net debt primarily due to lost matchday receipts Liquidity and Net Debt The company's liquidity position includes £80.6 million in cash and £140.0 million in credit facilities, while net debt increased by £64.2 million due to operational impacts - As of 31 December 2020, the company had £80.6 million in cash and cash equivalents and access to an additional £140.0 million under its revolving credit facilities8 Net Debt Overview | Metric | As of 31 Dec 2020 | As of 31 Dec 2019 | Change | | :--- | :--- | :--- | :--- | | Net Debt | £455.5 million | £391.3 million | +£64.2 million (+16.4%) | - The increase in net debt was primarily driven by the loss of 2020/21 season Matchday cash receipts and deferred sponsorship payments, partially offset by increased broadcasting receipts, with a £60.0 million drawdown on the revolving credit facility also contributing to borrowings420 Cash Flow Statement Analysis Cash flow analysis for Q2 FY2021 shows a net cash outflow from operations and investing activities, offset by a significant inflow from financing activities, leading to an overall increase in cash Cash Flow Summary | Cash Flow Activity (Q2 FY2021) | Value (£M) | Key Driver | | :--- | :--- | :--- | | Net cash outflow from operating activities | (1.0) | Lower working capital movements related to Matchday revenue | | Net cash outflow from investing activities | (37.3) | Net capital expenditure on intangible assets (player registrations) | | Net cash inflow from financing activities | 59.6 | £60.0 million drawdown on revolving credit facilities | - Overall cash and cash equivalents increased by £21.7 million in the quarter, a significant improvement from the £39.4 million decrease in the prior year quarter18 COVID-19 Impact The COVID-19 pandemic significantly impacted operations, leading to closed facilities and lost matchday revenue, though partially offset by increased broadcasting income, with no financial guidance provided due to uncertainty - Operations at Old Trafford, including the Stadium, Museum, and Megastore, remain closed to visitors5 - A total of ten home matches were played behind closed doors in Q2, compared to nine with fans in the prior year quarter, causing a significant Matchday revenue shortfall6 - The Matchday revenue shortfall was more than offset by Broadcasting revenues from participation in the UEFA Champions League6 - Due to ongoing uncertainty from the pandemic, the Company is not providing revenue or adjusted EBITDA guidance for fiscal 20216 Financial Statements and Supplemental Notes This section presents the unaudited consolidated financial statements, including the Statement of Profit or Loss, Balance Sheet, and Cash Flows, along with reconciliations of non-IFRS measures Consolidated Statement of Profit or Loss The consolidated statement details the company's revenue, operating profit, net finance income, and profit for the period for the three and six months ended December 31, 2020 Consolidated Statement of Profit or Loss | £ thousands | Three months ended 31 Dec 2020 | Six months ended 31 Dec 2020 | | :--- | :--- | :--- | | Revenue | 172,850 | 281,822 | | Operating profit | 48,469 | 21,373 | | Net finance income | 19,702 | 19,723 | | Profit before income tax | 68,171 | 41,096 | | Profit for the period | 63,828 | 33,558 | Consolidated Balance Sheet The consolidated balance sheet provides a snapshot of the company's assets, equity, and liabilities as of December 31, 2020, and June 30, 2020 Consolidated Balance Sheet | £ thousands | As of 31 Dec 2020 | As of 30 June 2020 | | :--- | :--- | :--- | | Total assets | 1,381,600 | 1,383,466 | | Non-current assets | 1,149,933 | 1,158,660 | | Current assets | 231,667 | 224,806 | | Total equity and liabilities | 1,381,600 | 1,383,466 | | Total equity | 405,579 | 351,232 | | Total liabilities | 976,021 | 1,032,234 | Consolidated Statement of Cash Flows The consolidated statement of cash flows outlines the net cash movements from operating, investing, and financing activities for the three and six months ended December 31, 2020 Consolidated Statement of Cash Flows | £ thousands | Three months ended 31 Dec 2020 | Six months ended 31 Dec 2020 | | :--- | :--- | :--- | | Net cash (outflow)/inflow from operating activities | (1,039) | 61,271 | | Net cash outflow from investing activities | (37,255) | (90,690) | | Net cash inflow from financing activities | 59,588 | 59,180 | | Net increase in cash and cash equivalents | 21,294 | 29,761 | | Cash and cash equivalents at end of period | 80,620 | 80,620 | Reconciliation of Non-IFRS Measures This section reconciles IFRS profit for the period to non-IFRS measures such as Adjusted EBITDA and Adjusted Profit, providing clarity on underlying financial performance Adjusted EBITDA Reconciliation | £ thousands | Three months ended 31 Dec 2020 | Six months ended 31 Dec 2020 | | :--- | :--- | :--- | | Profit for the period | 63,828 | 33,558 | | Adjustments: | | | | Income tax expense | 4,343 | 7,538 | | Net finance income | (19,702) | (19,723) | | (Profit)/loss on disposal of intangible assets | (14,278) | (1,683) | | Amortization | 32,459 | 64,002 | | Depreciation | 3,663 | 7,449 | | Adjusted EBITDA | 70,313 | 91,141 | Adjusted Profit Reconciliation | £ thousands | Three months ended 31 Dec 2020 | Six months ended 31 Dec 2020 | | :--- | :--- | :--- | | Profit for the period | 63,828 | 33,558 | | Adjustments (net) | (19,094) | (20,014) | | Adjusted profit for the period | 35,341 | 10,700 |