MU Finance plc. First Quarter Results Fiscal Year Ending 30 June 2012

Transcription

1 MU Finance plc First Quarter Results Fiscal Year Ending 30 June November 2011

2 TableofContents OverviewofFirstQuarterandYeartoDate...3 FinancialHighlights...5 KeyPerformanceIndicators...6 Management sdiscussionandanalysisoffinancialperformance...7 ConsolidatedIncomeStatement-Unaudited...11 ConsolidatedStatementofFinancialPositionandCashFlows-Unaudited...12 NotestotheConsolidatedFinancialStatements-Unaudited

3 OVERVIEWOFFIRSTQUARTERANDYEARTODATE MUFinanceplcannouncestheresultsoftheRedFootballLimitedgroup(RFLortheCompany)forthe first quarter of the financial year ending 30 June 2012.The report summarises RFL s financial and operatingperformanceforthethreemonthsfrom1july2011to30september2011. Insummary: Strongstarttotheseason! Currently2 nd inthefapl(fapremierleague)! Currently1stinUCL(UEFAChampionsLeague)Groupandunbeatenafter4matches! Reachedquarter-finalintheCarlingCup Continuedinvestmentintheplayingsquad! New signings - David De Gea (Atletico Madrid), Ashley Young (Aston Villa) and Phil Jones (BlackburnRovers)! New contracts signed with Antonio Valencia (2015), Chris Smalling (2016), Ji-sung Park (2013), TomCleverley(2015)andJavierHernandez(2016) Yearonyearrevenuegrowthof16.6%from 63.3mto 73.8m! Matchdayrevenuesincreased9.6%from 19.7mto 21.6m! 4competitivehomematchesplayed,inlinewiththeprioryearperiod! StrongattendancesatallFAPLandUCLhomegamesplayed! SeasonalandMatchdayhospitalitysalesaheadoflastyear! SuccessfultouroftheUSinsummer2011! Mediarevenuesincreased16.5%from 19.4mto 22.6m! UCL income beneficially impacted from finishing as FAPL Champions in the 2010/11 season(2009/10:runnersup)! 6liveFAPLmatchestelevised,inlinewiththeprioryearperiod! Commercialrevenuesincreased22.3%from 24.2mto 29.6m! Continuedgrowthinrevenuefromcommercialpartners(excludingKit&Shirt)! NewtrainingkitdealsignedwithDHLeffectivefromthisseason! Increases in the partial recognition of cumulative profit share associated with Nike partnership YearonyearEBITDAgrowthof29.5%from 14.9mto 19.3m EBITDAmarginof26.2%inthequartercomparedwith23.5%forthequarterto30September2010 Strongstatementoffinancialposition! Netassetsof 804.8m! Cashbalanceof 65.0m 3

4 OVERVIEWOFFIRSTQUARTERANDYEARTODATE(CONTINUED) As previously disclosed in the senior secured note Offering Memorandum and quarterly financial statements,wemayfromtimetotimepurchaseorselloursecurities.weconfirmthatwepurchased 23.7 million (sterling equivalent) of senior secured notes during the quarter ended 30 September Asof30September2011weown 87.5million(sterlingequivalent)ofourseniorsecurednotes. Thesepurchasesweremadepursuanttotheboard semphasisonprudenttreasurymanagementand improvingtheyieldfromitscashandcashequivalentbalances.thepurchasedseniorsecurednotesare beingheldbythecompanyandhavenotbeenretired.theseniorsecurednotesmaybesoldbackto themarketinthefuturedependingonthecapitalandoperatingrequirementsofthebusiness. 4

5 FINANCIALHIGHLIGHTS ThetablebelowsummarisestheCompany sunauditedfinancialperformanceforthethreemonthsto 30September2011andforthecorrespondingperiodinthepreviousfinancialyear(bothperiodsstated underifrs): ( millions) Threemonthsended 30September Matchdayrevenue Mediarevenue Commercialrevenue Totalrevenue Staffcosts (33.7) (37.8) Operatingcosts (14.7) (16.7) Totaloperatingcosts (48.4) (54.5) EBITDA EBITDAmargin(%) 23.5% 26.2% Changeinworkingcapital Operatingfreecashflow Netplayercapitalexpenditure (8.2) (47.1) Generalcapitalexpenditure (3.7) (13.8) Cashflowbeforefinancing 10.8 (38.4) Loan/bankinterestpaid (22.7) (21.0) Taxpaid - (3.2) Netchangeinborrowings (0.2) (23.1) Decreaseincashandcashequivalents (12.1) (85.7) Grossdebt Cashandcashequivalents

6 KEYPERFORMANCEINDICATORS ThetablebelowsummarisestheCompany skeyperformanceindicators(kpis)forthethreemonthsto 30September2011andforthecorrespondingperiodinthepreviousfinancialyear: Threemonthsended 30September Matchday %oftotalrevenue 31.1% 29.3% HomeMatchesPlayed FAPL 3 3 UCL 1 1 DomesticCups - - AwayMatchesPlayed UCL 1 1 DomesticCups 1 1 Media %oftotalrevenue 30.6% 30.6% Commercial %oftotalrevenue 38.3% 40.1% NikeandAon%ofCommercial 47.4% 44.6% Partnersandother%ofCommercial 52.6% 55.4% Other Employees Staffcosts%ofrevenue 53.2% 51.2% PhasingofFAPLhomegames(2011/12ascurrentlyscheduled,subjecttochange) Quarter1 Quarter2 Quarter3 Quarter4 Total 2011/12season /11season

7 MANAGEMENT SDISCUSSIONANDANALYSISOFFINANCIALPERFORMANCE IncomeStatement Matchdayrevenue Matchday revenue for the quarter ended 30 September 2011 was 21.6 million, an increase of 1.9 million or 9.6% over 19.7 million for the same period in 2010/11. The success of the US Tour in summer2011broughtinadditionalrevenuesoverandabovethesameperiodin2010/11.inaddition, Matchdayincomewas 0.4millionhigherthanthesameperiodin2010/11,duetoimprovedseasonal hospitalitysalescomparedwith2010/11. Mediarevenue Mediarevenueforthequarterended30September2011was 22.6million,anincreaseof 3.2million or16.5%over 19.4millionforthesameperiodin2010/11.Mediaincomeintheperiodwasimpacted mainly by UCL income distributions from UEFA.Whilst we have played the same number of UCL matchesasthesameperiodin2010/11,in2011/12wereceivehigherrevenuesfromthemarketpool due to our 1 st place FAPL finish in 2010/11 (2 nd place FAPL finish in 2009/10). In addition, we have recentlyreceivedafinalpaymentfromuefarelatingtothe2010/11uclcompetitionwhichhasbeen accountedforinthefirstquarterof2011/12. Commercialrevenue Commercialrevenueforthequarterended30September2011was 29.6million,anincreaseof 5.4 million or 22.3% over 24.2 million for the same period in 2010/11. This increase was a result of continued growth in additional sponsorship revenues generated by an increase in the number and valueofourglobal,regional,mobileandsuppliersponsorstogetherwiththeimpactofthetrainingkit dealsignedwithdhl.the2011/12commercialrevenuefigurealsoreflectsanincreaseinthepartial recognition of the cumulative profit share associated with the Nike partnership compared with that recognisedin2010/11. Staffcosts Staffcostsforthequarterended30September2011were 37.8million,anincreaseof 4.1millionor 12.2% over 33.7 million for the same period in 2010/11. This increase largely relates to growth in player remuneration, driven by new player acquisitions and further contractual negotiations together with increased costs and headcount arising from the continued growth in our sponsorship and commercialoperations. Otheroperatingexpenses Otheroperatingexpensesforthequarterended30September2011were 16.7million,anincreaseof 2.0millionor13.6%over 14.7millionforthesameperiodin2010/11.Thisincreaserelatestocosts associatedwiththeustourinsummer2011andageneralunderlyinggrowthinoperatingexpenditure largelyassociatedwiththecontinuedgrowthinthegroup scommercialandmediabusinesses. Amortisationofplayers registrations Amortisation of players registrations for the quarter ended 30 September 2011 was 10.1 million, consistentwith 10.1millionforthesameperiodin2010/11.Increasesinamortisationduetoplayer acquisitions (Jones, De Gea and Young) have been offset by reductions due to contract extensions (Anderson,Smalling,Valencia)anddepartedplayers. 7

8 Profitondisposalofplayers registrations Profitondisposalofplayers registrationsforthequarterended30september2011was 5.6million, anincreaseof 3.8millionover 1.8millionforthesameperiodin2010/11.Theprofitondisposalin 2011/12 relates to the disposals of Obertan (Newcastle), Brown and O Shea (Sunderland). For 2010/11,theprofitondisposalrelatedmainlytothetransfersofCathcartandPossebonwithadditional triggerpaymentsbeingreceivedforplayerspreviouslytransferred. Netfinancecosts Netfinancecostsforthequarterended30September2011were 19.3million,anincreaseof 18.5 millionfrom 0.8millionforthesameperiodin2010/11.Themainreasonsforthisincreaseare: - areductionininterestpayableonseniorsecurednotesof 1.5million,from 10.8millioninthe same period in 2010/11 to 9.3 million in the quarter ended 30 September 2011, due to the repurchaseofseniorsecurednotes - theabovepartlyoffsetbyapremiumof 1.9millionpaidonfurtherrepurchasesofseniorsecured notesinthequarterended30september anunrealisedlossof 6.3milliononthetranslationofthedollardenominatedseniorsecurednotes compared to an unrealised gain of 13.0 million for the same period in 2010/11 a total movementof 19.3million.Thisforeignexchangeloss/gainiscurrentlynotacashcharge/credit and could reverse depending on the dollar exchange rate movement. Any gain or loss on a cumulativebasiswillnotberealiseduntil2017orearlieriftheseniorsecurednotesarerefinanced. Tax Whilst the Group accounts for tax in the income statement, most of these tax charges are offset by losses elsewhere within our UK tax group, with Red FootballShareholder Limited, the indirect parent company,astheultimateparentofthatuktaxgroup.asaresult,wetypicallyincursignificantlylower cashtaxchargescomparedwiththechargesinourconsolidatedincomestatement.thestatutorytax rate during the quarter ended 30 September 2011 was 26% compared with 28% during the quarter ended30september2010. Thetaxchargeforthequarterended30September2011was 0.5million,adecreaseof 0.9million over 1.4millionforthesameperiodin2010/11. StatementofCashFlows EBITDA EBITDAforthequarterended30September2011was 19.3million,anincreaseof 4.4millionover 14.9 million for the same period in 2010/11. This increase arises primarily as a result of higher revenues earned to date across all revenue streams, partially offset by increased staff costs and operatingexpensesasdescribedpreviously. Workingcapital Changesinworkingcapitalforthequarterended30September2011producedacashinflowof 3.2 million,adecreaseof 4.6millionover 7.8millioncashinflowforthesameperiodin2010/11.The decreaseinworkingcapitalmovementcomparedtothesameperiodin2010/11islargelyduetothe timing of annual sponsorship receipts, increased Tour monies received in advance of the reporting quarter,togetherwithhigherbonuspaymentsmaderelatingtothepreviousfinancialyear. Netplayercapitalexpenditure Net player capital expenditure for the quarter ended 30 September 2011 was an outflow of 47.1 million, an increase of 38.9 million over 8.2 million outflow for the same period in 2010/11. The 8

9 increaseispredominantlyduetotheacquisitionsofdegea,jonesandyoung,offsetbythedisposalsof Obertan,BrownandO Sheainthesummer2011transferwindowcomparedwiththeacquisitionsof BebeandHernandezandthedisposalofTosicduringthesummer2010transferwindow. Generalcapitalexpenditure Generalcapitalexpenditureforthequarterended30September2011wasanoutflowof 13.8million, an increase of 10.1 million over 3.7 million outflow for the same period in 2010/11.During the period we have expanded our property portfolio around the Old Trafford Stadium (outflow of 8.2 million 2010/11 nil)andhavealsomadefurtherinvestmentinimprovingourcorporatefacilities. Netinterestpaid Net interest paid for the quarter ended 30 September 2011 was 21.0 million, a decrease of 1.7 millionon 22.7millionforthesameperiodin2010/11.Thereductionisduetotheincreaseinsenior securednotesnowheldbythegroup. Tax Duringtheperiodwemadea 3.2mcorporationtaxpaymentrelatingtotheyearended30June2011. ThiswasduetotheGrouplossesavailableforsurrenderbeinginsufficienttooffsettheentiretaxcharge fortheyear. Netcashoutflowfromfinancing Netcashflowfromfinancingforthequarterended30September2011wasanoutflowof 23.1million, anincreaseof 22.9millionoveracashoutflowof 0.2millionforthesameperiodin2010/11.During thequarterwepurchased 23.7million(sterlingequivalent)nominalvalueofourseniorsecurednotes inopenmarkettransactions. Other AsdisclosedintheseniorsecurednotesOfferingMemorandum,wemayfromtimetotimepurchaseor otherwise acquire our indebtedness or sell or otherwise dispose of our indebtedness, including the senior secured notes due 2017, in individually negotiated transactions, open market purchases or otherwise. 9

10 CONSOLIDATEDFINANCIALSTATEMENTS The summary financial information provided overleaf has been derived from our unaudited consolidatedinterimfinancialreportasatandforthethreemonthperiodended30september2011 and 2010, each of which has been prepared in accordance with International Financial Reporting Standards(IFRS)usingthesameaccountingprinciplesandonthesamebasis.Ourinterimresultsare notnecessarilyindicativeofresultstobeexpectedforthefullyear. 10

11 CONSOLIDATEDINCOMESTATEMENT-UNAUDITED Threemonthsended 30September ( thousands) Matchdayrevenue 19,697 21,550 Mediarevenue 19,370 22,609 Commercialrevenue 24,235 29,623 Grouprevenue 63,302 73,782 Staffcosts (33,705) (37,828) Otheroperatingexpenses (14,711) (16,665) Operatingprofitbeforedepreciationandamortisationof,andprofiton disposalof,players registrations( EBITDA ) 14,886 19,289 Depreciation (1,721) (1,839) Amortisationofplayers registrations (10,064) (10,094) Operatingprofitbeforeprofitondisposalofplayers registrations 3,101 7,356 Profitondisposalofplayers registrations 1,788 5,624 Operatingprofit 4,889 12,980 Netinterestpayableonloansandseniorsecurednotes (12,182) (10,059) Premiumonrepurchaseofseniorsecurednotes - (1,900) Unrealisedfxgains/(losses)ondollardenominatedseniorsecurednotes 12,987 (6,252) Amortisationofissuediscountanddebtissue/financecosts (868) (803) Fairvaluemovementoninterestrateswapfinancialinstruments (704) (321) Netfinancecosts (767) (19,335) Profit/(loss)onordinaryactivitiesbeforetax 4,122 (6,355) Tax (1,383) (522) Profit/(loss)onordinaryactivitiesaftertax 2,739 (6,877) Attributableto: OwnersoftheCompany 2,628 (6,925) Non-controllinginterests ,739 (6,877) 11

12 CONSOLIDATEDSTATEMENTOFFINANCIALPOSITION-UNAUDITED Note At30September ( thousands) Property,plantandequipment 241, ,746 Investmentproperty 9,016 13,816 Intangibleassets goodwill 421, ,453 Intangibleassets players registrations 92, ,234 Non-currenttradeandotherreceivables 1 11,203 13,000 Non-currenttaxreceivable 2,500 2,500 Non-currentassets 778, ,749 Currentassets other 1 679, ,887 Currentassets cashandcashequivalents 151,702 64,967 Currentliabilities 2 (186,741) (230,223) Netcurrentassets 644, ,631 Totalassetslesscurrentliabilities 1,422,954 1,325,380 Non-currentliabilities 3 (619,203) (520,620) Netassets 803, ,760 EquityattributabletoownersoftheCompany 806, ,042 Non-controllinginterests (2,560) (2,282) Equity 803, ,760 CONSOLIDATEDSTATEMENTOFCASHFLOWS-UNAUDITED Threemonthsended 30September ( thousands) EBITDA 14,886 19,289 Movementinworkingcapital 7,756 3,192 Netcashinflowfromoperatingactivities 22,642 22,481 Netinterestpaid (22,731) (20,978) Taxpaid (23) (3,212) Netcashoutflowfromplayercapitalexpenditure (8,189) (47,068) Netcashoutflowfromgeneralcapitalexpenditure (3,664) (13,775) Netchangeinborrowings (166) (23,126) Netdecreaseincashandcashequivalents (12,131) (85,678) 12

13 NOTESTOTHECONSOLIDATEDFINANCIALSTATEMENTS-UNAUDITED 1.Currentassets-other At30September ( thousands) Derivativefinancialinstruments Nettradereceivables 20,766 16,194 Amountsduefromparentundertaking 626, ,385 Otherreceivables 10,060 10,269 Prepaymentsandaccruedincome 33,792 42, , ,887 Lessnon-currentportion: Tradereceivables (1,203) (3,000) Otherreceivables (10,000) (10,000) 679, ,887 2.Currentliabilities At30September ( thousands) Derivativefinancialinstruments 1,904 1,725 Borrowings 8,076 6,942 Tradepayables 8,630 15,598 Amountsduetoparentundertaking 21,246 30,114 Currenttaxliabilities - 1,127 Socialsecurityandothertaxes 7,859 9,852 Otherpayables 3,863 5,632 Accruals 20,663 24,112 Deferredincome 114, ,642 Provisions , ,223 3.Non-currentliabilities At30September ( thousands) Borrowings 508, ,299 Tradepayables 2,151 4,006 Otherpayables 23,390 19,067 Deferredincome 25,080 16,106 Provisions 2,080 1,795 Deferredtaxliabilities 57,840 53, , ,620 13