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Manchester United Plc 2013 Second Quarter Results

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 three and six month periods ended 31 December 2012.
  • Increased second quarter commercial revenue 29.0% year on year.
  • Completed the strategic acquisition of BskyB’s one-third stake in MUTV, taking full control of our global television channel.
  • Executed an additional six new Sponsorship deals – Kansai and Singha (global; headquartered in Japan/South Africa and Thailand), Wahaha and Multistrada (regional; China and Indonesia respectively); and China Construction Bank and Denizbank (financial services; China and Turkey respectively).
  • Premier League Clubs agreed to a system of enhanced financial regulations – The new regulations include a short-term cost control protocol, which would limit the amount by which clubs could raise their player costs.
  • Finalised 2013 summer tour which includes games in Australia, Japan, and Hong Kong.

Ed Woodward, Executive Vice Chairman commented, ‘Manchester United achieved record revenue and record adjusted EBITDA in the second quarter driven by our commercial operation, which continues to experience extremely strong growth particularly in sponsorship. In addition, our acquisition of BskyB’s one third stake in Manchester United’s global television channel MUTV will be key in expanding our media business in the future’.

For fiscal 2013, Manchester United continues to expect:
  • Revenue to be £350m to £360m.
  • Adjusted EBITDA to be £107m to £110m.

Key Financials (unaudited)
£ million     Three months ended

31 December
          Six months ended

31 December
      2012   2011   Change       2012   2011   Change
Commercial revenue     35.6   27.6   29.0%       78.6   62.2   26.4%
Broadcasting revenue     39.5   37.7   4.8%       53.2   59.6   (10.7%)
Matchday revenue     35.0   36.0   (2.8%)       54.6   53.3   2.4%
Total revenue     110.1   101.3   8.7%       186.4   175.1   6.5%
Adjusted EBITDA*     50.2   44.9   11.8%       66.5   64.2   3.6%
Profit on ordinary activities before Tax     28.4   19.2   47.9%       22.3   12.8   74.2%
Tax (expense)/credit     (12.2)   22.9   -       14.4   24.3   (40.7%)
Profit for the period from continuing operations (i.e. Net Income)     16.2   42.1   (61.5%)       36.7   37.1   (1.1%)
Basic and diluted earnings per share (EPS)**     0.10   0.27   (63.0%)       0.23   0.24   (4.2%)
Gross debt***     366.6   438.9   (16.5%)       366.6   438.9   (16.5%)
Cash and cash equivalents     66.6   50.9   30.8%       66.6   50.9   30.8%

* Adjusted EBITDA is a non-IFRS measure. We define Adjusted EBITDA as profit/(loss) for the period from continuing operations before net finance costs, tax credit/(expense), depreciation, amortisation of, and profit on disposal of, players’ registrations and exceptional items. We believe 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 capital structure (primarily interest expense and exchange rate gains or losses), asset base (primarily depreciation and amortisation) and items outside the control of our management (primarily income taxes and interest income and expense). 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 Adjusted EBITDA to profit/(loss) for the period from continuing operations is presented in supplemental note 4.

** See supplemental note 2.

*** Gross debt has decreased by 16.1% since 30 June 2012 (£436.9 million).
Revenue Analysis


Commercial revenue for the second quarter increased 29.0% year on year to £35.6 million driven by the addition of several new sponsorship deals. For the second quarter:
  • Sponsorship revenue increased 48.6% to £20.8 million;
  • Retail, Merchandising, Apparel & Product Licensing increased 13.1% to £9.5 million; and
  • New Media & Mobile increased 1.9% to £5.3 million.

We have secured a new eight year sponsorship agreement for our training kit rights; and will be making an announcement with further details in the near future.

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