Manchester United plc — FY2023 Form 20-F
Reporting period: Fiscal year ended 30 June 2023, compared mainly with the year ended 30 June 2022. Although the request metadata refers to 2022 Q4, this filing is an annual report and does not provide a clear standalone Q4 income statement or cash-flow result. Figures below are in pounds sterling unless stated otherwise. Financial statements use IFRS as issued by the IASB.
Financial performance and position
| Metric | FY2023 | FY2022 | Change / context |
|---|---|---|---|
| Revenue | £648.4m | £583.2m | Up 11.2% |
| Commercial revenue | £302.9m | £257.8m | Up 17.5% |
| Broadcasting revenue | £209.1m | £214.8m | Down 2.7% |
| Matchday revenue | £136.4m | £110.5m | Up 23.4% |
| Operating loss | £11.2m | £87.4m | Before player-disposal gains, operating loss was £36.1m versus £109.3m |
| Net loss | £28.7m | £115.5m | Basic loss per share: 17.59p versus 70.86p |
| Adjusted EBITDA | £154.9m | £81.1m | Non-IFRS measure; margin approximately 23.9% versus 13.9% |
| Operating cash flow | £95.8m | £96.4m | Cash generated from operations was £128.9m versus £121.7m |
| Cash and cash equivalents | £76.0m | £121.2m | Down £45.2m |
| Total borrowings | £613.3m | £636.1m | Net debt was £537.3m versus £514.9m |
| Total equity | £104.0m | £127.5m | Down £23.6m |
Operating and net margins were approximately negative 1.7% and negative 4.4%, respectively. Investing cash outflow was £140.2m, including £124.6m of net spending on player registrations and £15.6m on property, plant and equipment. Financing cash outflow was £2.0m; no dividend was paid for FY2023.
At year-end, current assets were £193.7m and current liabilities £526.9m. The Group had £100m drawn and £200m undrawn under its £300m revolving facilities. Management stated that it had sufficient working capital for at least 12 months and prepared the accounts on a going-concern basis. All disclosed debt covenants were met.
Material changes versus FY2022
- Revenue growth reflected stronger commercial and Matchday results. Commercial revenue rose with new sponsorship agreements and the 2022 pre-season tour; Matchday revenue benefited from seven additional home games and demand for hospitality.
- Broadcasting revenue fell as the men’s team played in the Europa League rather than the Champions League, partly offset by improved domestic and continental performance. The team qualified for the 2023/24 Champions League.
- Employee benefit expenses decreased 13.7% to £331.4m, attributed to squad turnover and absence from the Champions League. Other operating expenses increased 38.4% to £163.2m, including tour and matchday costs; amortization rose 14.0% to £172.7m following squad investment.
- Net finance costs narrowed to £21.4m from £62.2m, primarily due to a favorable foreign-exchange movement on unhedged US-dollar borrowings. FY2022 included a £58.7m unrealized FX loss; FY2023 included a £22.4m unrealized gain.
- Exceptional costs were nil, compared with £24.7m in FY2022, which principally included compensation for loss of office and a pension-scheme charge.
Outlook, risks and unusual items
- Outlook: The filing gives no consolidated revenue or profit guidance. Management’s strategy is to invest in the team, facilities and digital media, grow commercial activities and improve revenue and operating margins. Results remain sensitive to on-field performance, competition qualification and the number of matches played.
- Adidas agreement: On 21 July 2023, the club extended its agreement through 30 June 2035. The disclosed minimum guarantee is £1.65bn over the original term and extension, subject to adjustments. From 2025/26, a £10m deduction applies for each season without Champions League participation.
- Subsequent borrowing: Revolver drawdowns increased from £100m at 30 June 2023 to £200m by 3 August and £260m by 10 October 2023, out of £300m available. This is a significant post-year-end liquidity development.
- Other subsequent events: Post-year-end player-registration acquisitions and extensions totaled £208.0m, with payments due over five years; disposals generated £39.8m net proceeds. A Qualcomm shirt partnership begins in 2024/25; associated amounts are to be recognized in FY2024.
- Contingencies: Maximum additional transfer-related payments were £133.1m, contingent on specified performance conditions. The Group was in active discussions with UK tax authorities concerning player and representative arrangements; a £12.1m current tax provision was recorded. The filing does not quantify a possible liability from those discussions.
- Regulatory: The club reported a technical breach of the prior UEFA break-even rules for the 2022/23 assessment, receiving a €0.3m fine with no future restrictions. Its latest Premier League profitability and sustainability submission was positive.
- Key risks: Dependence on men’s first-team performance and European qualification; player and staff costs; renewal of sponsorships and centrally negotiated media rights; concentrated counterparties; foreign-exchange and interest-rate exposure; cyber and data-security incidents; and substantial secured debt. The Glazer family’s Class B shares carry 10 votes each and represented 95.62% of voting power.
- Accounting and audit: The auditor identified commercial revenue recognition and valuation of player registrations as critical audit matters. PwC gave an unqualified opinion and concluded internal control over financial reporting was effective as of 30 June 2023.
Investor facts to verify
- Confirm the annual reporting period and obtain quarterly filings if assessing standalone 2022 Q4 performance; this 20-F reports fiscal-year totals.
- Reconcile the commercial-revenue discussion: the audited table reports sponsorship revenue of £189.5m, while one narrative passage appears to state £89.5m. The audited figure is consistent with the detailed financial statements.
- Review the subsequent increase in revolving-facility borrowings to £260m by 10 October 2023, available facility headroom, and the effect on interest expense and liquidity.
- Assess the sustainability of losses and cash generation against player-registration spending, scheduled amortization (£157.9m expected in FY2024), and gross and net debt.
- Track Champions League qualification assumptions and the related Adidas deductions, media distributions, and UEFA financial-sustainability requirements.
- Check developments in the HMRC player-tax discussions and any changes to the recorded provision or contingent transfer commitments.