Manchester United PLC Reports Third Quarter Fiscal 2022 Results

Key Points

  • Erik ten Hag appointed as men’s first team manager and started May 23rd
  • For the 2021/22 Premier League season, the men’s first team finished in 6th place, qualifying for the UEFA Europa League for the 2022/23 season
  • The women’s first team finished the 2021/22 FA Women’s Super League season in 4th place
  • The new Fans’ Advisory Board met for the first time to strengthen fan engagement
  • Master planners have been appointed to explore options for redevelopment of Old Trafford
  • Record memberships sold, and record sales and renewals of season tickets and executive club memberships sold for the 2022/23 season
  • Normal pre-season Tour operations to resume this summer with stops in Thailand, Australia and Norway in July 2022

Manchester United MANU the “Company” and the “Group”))) – one of the most popular and successful sports teams in the world – today announced financial results for the 2022 fiscal third quarter ended 31 March 2022.

Management Commentary

Richard Arnold, Chief Executive Officer, commented, “It has clearly been a disappointing season for the men’s first team. Work is well underway to address this, led by our Football Director, John Murtough and our new manager, Erik ten Hag. Resilience and high standards are core values for Manchester United, and we are determined to achieve better results next season and beyond. Faith in youth is another key tenet of the Club and the continued success of our Academy gives us confidence in the future. Looking at the wider football landscape, we have seen significant developments in the reform of FIFA’s Agent Regulations, access criteria for UEFA club competitions post-2024 and UEFA Financial Fair Play rules. Overall, these changes demonstrate a welcome trend towards stronger governance and greater financial sustainability in European football. Off the pitch, our revenues have continued to recover from the pandemic, reflecting the enduring strength of our commercial operations, which in turn support our ability to continue to invest in the Club.”

Football Developments

We have initiated or made progress on a series of measures to strengthen our football operations. These included:

  • Completed the search for the new manager, led by John Murtough, Football Director, leading to the appointment of Erik ten Hag
  • Further re-structured the scouting and recruitment department
  • New Director of Data Science joined in March
  • Men’s Academy Under-18s team won the FA Youth Cup in front of a record 67,000+ fans at Old Trafford while the women’s Under-21s won the FA WSL Academy League title and the WSL Academy Cup
  • Announced a return to normal pre-season Tour operations with visits to Thailand, Australia and Norway in July 2022

Fan Engagement

Strengthening engagement with fans remains a key strategic priority, and included the following initiatives:

  • Held the first meeting of the Fans’ Advisory Board in January, and a second meeting in April with both meetings attended by Executive Co-Chairman, Joel Glazer
  • Reformed policies governing the sale of cup match tickets in consultation with fan representatives to offer fans more flexibility and choice
  • Appointed the first Head of Fan Engagement

Venue and Operations

Along with the normalization of Matchday operations and the return of fans post-Covid, Venue and Operations further achieved:

  • A record level of global memberships sold for the 2021/22 season
  • Master planners were engaged to explore options for the development of Old Trafford
  • Safe standing trials commenced in January and planning is now underway for a potential expansion
  • Season tickets and Executive Club sales for the 2022/23 season completed on 20 May and achieved record sales and quickest sell-out

Partnerships and Alliances

A strong quarter of new or renewed partnership deals post-COVID included:

  • Launch of a new multi-year training kit partner, Tezos
  • Renewed global sponsorship partnerships with Visit Malta and Maui Jim

Digital Products and Services

Content-led digital fan engagement continues to support growth in e-commerce sales at double the rate of the prior year. Other digital initiatives completed, or in progress, included:

  • Launch of an upgraded Club app fully integrated with MUTV content in May
  • Achieved average monthly reach of 500 million users throughout the quarter across all social media platforms combined

Industry Developments and Governance

There have been several significant developments in football governance, including reform of:

  • UEFA Financial Sustainability rules, effective July 2022, which will ultimately include a 70% cap on men’s squad costs
  • FIFA’s Football Agent Regulations
  • UEFA club competition format and access criteria post-2024, which will increase the number of matches in the league phase of the Champions League to eight matches and will provide an additional two places in the expanded Champions League to the country associations with the best collective performance by their clubs in the previous season.

Key Financials (unaudited)

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

Three months ended

31 March 2022

Nine months ended

31 March 2022

2022

2021

Change

2022

2021

Change

Commercial revenue

65.6

58.1

12.9%

194.4

180.4

7.8%

Broadcasting revenue

51.5

58.6

(12.0%)

181.2

214.9

(15.7%)

Matchday revenue

35.7

1.6

2,132.8%

89.1

4.8

1,756.8%

Total revenue

152.8

118.3

29.2%

464.7

400.1

16.2%

Adjusted EBITDA(1)

20.4

14.4

42.0%

89.6

105.5

(15.1%)

Operating (loss)/profit

(21.8)

(21.6)

0.9%

(26.6)

(0.2)

(13,157.0%)

 

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

(27.7)

(18.1)

(53.0%)

(44.7)

15.4

(390.3%)

Basic (loss)/earnings per share (pence)

(17.01)

(11.12)

(53.0%)

(27.4)

9.48

(389.0%)

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

(22.4)

(21.7)

(3.2%)

(27.5)

(11.0)

(150.0%)

Adjusted basic loss per share (pence)(1)

(13.75)

(13.30)

(3.4%)

(16.89)

(6.73)

(151.0%)

 

Non-current and current borrowings

591.5

528.2

12.0%

591.5

528.2

12.0%

Cash and cash equivalents

95.8

84.7

13.1%

95.8

84.7

13.1%

Net debt(1)/(2)

495.7

443.5

11.8%

495.7

443.5

11.8%

(1) Adjusted EBITDA, adjusted profit/(loss) for the period, adjusted basic earnings/(loss) per share and net debt are non-IFRS measures. See “Non-IFRS Measures: Definitions and Use” on page 7 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. Non-current and current borrowings and cash and cash equivalents as of 31 March 2022 reflect the impact of a £100 million drawdown on our revolving facilities.

COVID-19 Impact

Whilst the nature of the ongoing pandemic may result in UK government restrictions being re-imposed in the future, we continue to play matches at Old Trafford stadium in front of a full capacity crowd.

Phasing of Premier League games

Quarter 1

Quarter 2

Quarter 3

Quarter 4

Total

2021/22 season

6

12

11

9

38

2020/21 season

2

13

14

9

38

2019/20 remaining season

6

6

 

8

13

14

9

44

2019/20 season

7

13

9

3

32

Revenue Analysis

Commercial

Commercial revenue for the quarter was £65.6 million, an increase of £7.5 million, or 12.9%, over the prior year quarter.

  • Sponsorship revenue was £39.2 million, an increase of £3.4 million, or 9.4%, over the prior year quarter, due to new sponsorship agreements. The prior year quarter was affected by COVID-19 related variations.
  • Retail, Merchandising, Apparel & Product Licensing revenue was £26.4 million, an increase of £4.1 million, or 18.4%, over the prior year quarter, primarily due to the closure of the Old Trafford based Megastore in the prior year quarter and the return of fans in the current year quarter.

Broadcasting

Broadcasting revenue for the quarter was £51.5 million, a decrease of £7.1 million, or 12.0%, over the prior year quarter, primarily due to playing eight fewer home and away games across all competitions.

Matchday

Matchday revenue for the quarter was £35.7 million, an increase of £34.1 million, or 2,132.8%, over the prior year quarter, due to all nine home games being played in front of a full capacity crowd. All twelve home games in the prior year quarter were played behind closed doors.

Other Financial Information

Operating expenses

Total operating expenses for the quarter were £175.3 million, an increase of £36.8 million, or 26.6%, over the prior year quarter.

Employee benefit expenses

Employee benefit expenses for the quarter were £101.8 million, an increase of £16.6 million, or 19.5%, over the prior year quarter due to investment in the first team playing squad.

Other operating expenses

Other operating expenses for the quarter were £30.6 million, an increase of £11.9 million, or 63.6%, over the prior year quarter. 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 quarter, all home games were played behind closed doors.

Depreciation and amortization

Depreciation for the quarter was £3.5 million, a decrease of £0.3 million or 7.3% over the prior year quarter. Amortization for the quarter was £39.4 million, an increase of £8.6 million, or 28.1%, over the prior year quarter, due to investment in the first team playing squad. The unamortized balance of registrations on 31 March 2022 was £349.6 million.

(Profit)/loss on disposal of intangible assets

Profit on disposal of intangible assets for the quarter was £0.7 million, compared to a loss of £1.4 million for the prior year quarter.

Net finance (costs)/income

Net finance costs for the quarter were £14.1 million, compared to £1.4 million in the prior year quarter. The movement was driven by an unfavorable swing in foreign exchange rates in the current quarter compared to a smaller favorable swing in the prior year quarter.

Income tax

The income tax credit for the quarter was £8.2 million, compared to a credit of £4.9 million in the prior year quarter.

Cash flows

Overall cash and cash equivalents (including the effects of exchange rate movements) increased by £8.4 million in the quarter to 31 March 2022, compared to an increase of £4.1 million in the prior year quarter.

Net cash inflow from operating activities for the quarter was £23.2 million, a decrease of £3.8 million compared to a net cash inflow in the prior year quarter of £27.0 million.

Net capital expenditure on property, plant and equipment for the quarter was £0.7 million, a decrease of £1.1 million over the prior year quarter.

Net capital expenditure on intangible assets for the quarter was £3.2 million, a decrease of £4.7 million over the prior year quarter.

Net cash outflow from financing activities for the quarter was £11.3 million, compared to £11.1 million in the prior year quarter.

Net debt

Net Debt as of 31 March 2022 was £495.7 million, compared with £443.5 million as of 31 March 2021.

Dividend

A semi-annual cash dividend of $0.09 per share will be paid on 24 June 2022, to shareholders of record on 6 June 2022. The stock will begin to trade ex-dividend on 3 June 2022.

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 144-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).

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, net finance costs/income, exceptional items 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 loss/profit on disposal of intangible assets and exceptional items), capital structure (primarily finance costs/income), 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 (loss)/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 (including foreign exchange losses immediately reclassified from the hedging reserve following change in contract currency denomination of future revenues), and fair value movements on embedded foreign exchange derivatives and foreign currency options, adding/subtracting the actual tax expense/credit for the period, and subtracting/adding the adjusted tax expense/credit for the period (based on a normalized tax rate of 21%; 2021: 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% (2021: 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

 

 

2022

2021

2022

2021

 

 

 

 

 

 

 

Revenue

 

 

 

 

 

Commercial % of total revenue

42.9%

49.1%

41.8%

45.1%

 

Broadcasting % of total revenue

33.7%

49.5%

39.0%

53.7%

 

Matchday % of total revenue

23.4%

1.4%

19.2%

1.2%

 

 

 

 

 

 

 

2021/22 Season

2020/21 Season

2021/22 Season

2020/21 Season

Carryover

2019/20 Season

 

Home Matches Played

 

 

 

 

 

 

PL

6

6

15

14

3

 

UEFA competitions

1

2

4

5

1

 

Domestic Cups

2

4

3

4

 

Away Matches Played

 

 

 

 

 

 

PL

5

8

14

15

3

 

UEFA competitions

1

2

4

5

2

 

Domestic Cups

1

4

1

 

 

 

Other

 

 

 

 

 

Employees at period end

1,214

976

1,214

976

 

Employee benefit expenses % of revenue

66.8%

72.0%

62.0%

59.7%

 

 

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

 

2022

2021

2022

2021

Revenue from contracts with customers

152,848

118,286

464,749

400,108

Operating expenses

(175,370)

(138,444)

(509,190)

(400,576)

Profit/(loss) on disposal of intangible assets

721

(1,424)

17,879

259

Operating loss

(21,801)

(21,582)

(26,562)

(209)

Finance costs

(17,676)

(6,388)

(40,267)

(29,887)

Finance income

3,568

4,948

9,033

48,170

Net finance (costs)/income

(14,108)

(1,440)

(31,234)

18,283

(Loss)/profit before income tax

(35,909)

(23,022)

(57,796)

18,074

Income tax credit/(expense)

8,182

4,911

13,128

(2,627)

(Loss)/profit for the period

(27,727)

(18,111)

(44,668)

15,447

 

 

 

 

 

Basic earnings per share:

 

 

 

 

Basic (loss)/earnings per share (pence)

(17.01)

(11.12)

(27.40)

9.48

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

163,003

162,939

163,000

162,939

Diluted earnings per share:

 

 

 

 

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

(17.01)

(11.12)

(27.40)

9.45

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

163,003

162,939

163,000

163,400

(1) For the three and nine months ended 31 March 2022 and the three months ended 31 March 2021, 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

2022

30 June

2021

31 March

2021

ASSETS

 

 

 

Non-current assets

 

 

 

Property, plant and equipment

243,752

247,059

248,985

Right-of-use assets

4,510

4,383

4,719

Investment properties

20,343

20,553

20,623

Intangible assets

776,525

754,467

776,587

Deferred tax asset

61,928

Trade receivables

35,423

20,404

26,397

Derivative financial instruments

6,977

499

651

 

1,087,530

1,047,365

1,139,890

Current assets

 

 

 

Inventories

2,692

2,080

2,363

Prepayments

19,388

7,407

12,586

Contract assets – accrued revenue

45,524

40,544

50,279

Trade receivables

56,763

50,370

32,127

Other receivables

1,032

460

1,483

Income tax receivable

834

1,108

1,223

Derivative financial instruments

2,362

318

845

Cash and cash equivalents

95,791

110,658

84,715

 

224,386

212,945

185,621

Total assets

1,311,916

1,260,310

1,325,511

CONSOLIDATED BALANCE SHEET (continued)

(unaudited; in £ thousands)

 

As of

 

31 March

2022

30 June

2021

31 March

2021

EQUITY AND LIABILITIES

 

 

 

Equity

 

 

 

Share capital

53

53

53

Share premium

68,822

68,822

68,822

Treasury shares

(21,305)

(21,305)

(21,305)

Merger reserve

249,030

249,030

249,030

Hedging reserve

804

(10,436)

(11,212)

Retained earnings

(85,917)

(13,652)

94,170

 

211,487

272,512

379,558

Non-current liabilities

 

 

 

Deferred tax liabilities

22,882

35,546

25,270

Contract liabilities – deferred revenue

19,057

22,942

11,279

Trade and other payables

97,043

67,517

67,075

Borrowings

489,240

465,049

466,030

Lease liabilities

2,909

3,083

3,201

Derivative financial instruments

456

5,472

6,347

Provisions

4,805

4,157

 

636,392

603,766

579,202

Current liabilities

 

 

 

Contract liabilities – deferred revenue

140,047

117,984

108,766

Trade and other payables

216,190

192,661

180,374

Income tax liabilities

2,189

6,036

13,709

Borrowings

102,295

65,187

62,179

Lease liabilities

1,636

1,257

1,444

Derivative financial instruments

673

262

279

Provisions

1,007

645

 

464,037

384,032

366,751

Total equity and liabilities

1,311,916

1,260,310

1,325,511

 

CONSOLIDATED STATEMENT OF CASH FLOWS

(unaudited; in £ thousands)

 

Three months ended

31 March

Nine months ended

31 March

 

2022

£’000

2021

£’000

2022

£’000

2021

£’000

Cash flows from operating activities

 

 

 

 

Cash generated from operations (see supplemental note 4)

31,708

35,654

77,828

110,164

Interest paid

(8,284)

(8,678)

(18,237)

(18,862)

Interest received

2

1

5

2

Tax received/(paid)

(246)

28

(4,347)

(3,028)

Net cash inflow/(outflow) from operating activities

23,180

27,005

55,249

88,276

Cash flows from investing activities

 

 

 

 

Payments for property, plant and equipment

(721)

(1,782)

(6,223)

(4,940)

Payments for intangible assets

(10,419)

(17,785)

(101,334)

(126,560)

Proceeds from sale of intangible assets

7,226

9,898

20,241

32,080

Payments for derivative financial assets

(939)

Net cash outflow from investing activities

(3,914)

(9,669)

(87,316)

(100,359)

Cash flows from financing activities

 

 

 

 

Proceeds from borrowings

40,000

60,000

Principal elements of lease payments

(436)

(411)

(1,284)

(1,231)

Dividends paid

(10,892)

(10,718)

(21,561)

(10,718)

Net cash (outflow)/inflow from financing activities

(11,328)

(11,129)

17,155

48,051

Net increase/(decrease) in cash and cash equivalents

7,938

6,207

(14,912)

35,968

Cash and cash equivalents at beginning of period

87,434

80,620

110,658

51,539

Effects of exchange rate movements on cash and cash equivalents

419

(2,112)

45

(2,792)

Cash and cash equivalents at end of period

95,791

84,715

95,791

84,715

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

 

2022

£’000

2021

£’000

2022

£’000

2021

£’000

(Loss)/profit for the period

(27,727)

(18,111)

(44,668)

15,447

Adjustments:

 

 

 

 

Income tax (credit)/expense

(8,182)

(4,911)

(13,128)

2,627

Net finance costs/(income)

14,108

1,440

31,234

(18,283)

(Profit)/loss on disposal of intangible assets

(721)

1,424

(17,879)

(259)

Exceptional items

9,992

Amortization

39,444

30,728

113,231

94,730

Depreciation

3,521

3,795

10,791

11,244

Adjusted EBITDA

20,443

14,365

89,573

105,506

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

 

 

2022

£’000

2021

£’000

2022

£’000

2021

£’000

(Loss)/profit for the period

(27,727)

(18,111)

(44,668)

15,447

Exceptional items

9,992

 

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

11,102

(4,120)

21,662

(46,955)

Foreign exchange (gains)/losses immediately reclassified from the hedging reserve following change in contract currency denomination of future revenues

(206)

14,631

Fair value movement on embedded foreign exchange derivatives

(3,566)

(85)

(8,702)

361

Income tax (credit)/expense

(8,182)

(4,911)

(13,128)

2,627

Adjusted (loss)/profit before income tax

(28,373)

(27,433)

(34,844)

(13,889)

 

Adjusted income tax credit/(expense) (using a normalized tax rate of 21% (2021: 21%))

5,958

5,761

7,317

2,917

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

(22,415)

(21,672)

(27,527)

(10,972)

 

 

 

 

 

Adjusted basic (loss)/earnings per share:

 

 

 

 

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

(13.75)

(13.30)

(16.89)

(6.73)

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

163,003

162,939

163,000

162,939

Adjusted diluted (loss)/earnings per share:

 

 

 

 

Adjusted diluted (loss)/earnings per share

(pence) (1)

(13.75)

(13.30)

(16.89)

(6.73)

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

163,003

162,939

163,000

162,939

(1) For the three and nine months ended 31 March 2022 and the three and nine months ended 31 March 2021, 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

 

2022

£’000

2021

£’000

2022

£’000

2021

£’000

(Loss)/profit for the period

(27,727)

(18,111)

(44,668)

15,447

Income tax (credit)/expense

(8,182)

(4,911)

(13,128)

2,627

(Loss)/profit before income tax

(35,909)

(23,022)

(57,796)

18,074

Adjustments for:

 

 

 

 

Depreciation

3,521

3,795

10,791

11,244

Amortization

39,444

30,728

113,231

94,730

(Profit)/loss on disposal of intangible assets

(721)

1,424

(17,879)

(259)

Net finance costs/(income)

14,108

1,440

31,234

(18,283)

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

521

491

1,489

2,244

Foreign exchange (gains)/losses on operating activities

(4)

(405)

(306)

769

Reclassified from hedging reserve

(221)

588

(191)

176

Changes in working capital:

 

 

 

 

Inventories

184

429

(612)

(177)

Prepayments

8,909

4,600

(4,842)

(5,308)

Contract assets – accrued revenue

16,707

15,516

(12,577)

(4,313)

Trade receivables

(3,099)

26,560

(8,640)

89,816

Other receivables

78

(1,112)

(572)

(1,244)

Contract liabilities – deferred revenue

(21,437)

(31,174)

18,178

(70,288)

Trade and other payables

 

 

9,174

5,796

5,310

(7,017)

Provisions

453

1,010

Cash generated from operations

31,708

35,654

77,828

110,164

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