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HomeManchester UnitedManchester United PLC Reports Fourth Quarter and Full Year Fiscal 2022 Results

Manchester United PLC Reports Fourth Quarter and Full Year Fiscal 2022 Results

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MANCHESTER, England–(BUSINESS WIRE)–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 2022 fiscal fourth quarter and twelve months ended 30 June 2022. Management Commentary Richard Arnold, Chief Executive Officer, commented, “Our club’s core mission is to win football matches and entertain our fans. Since our last earnings report, we have strengthened our men’s first team squad, completed a successful summer tour, and established a foundation to build from in the early stages of the 2022/23 season under our new manager Erik ten Hag. We have also continued to develop our women’s team with an aim of reinforcing our position among the leading clubs in the Women’s Super League. “Ultimately, we know that the strength of Manchester United rests on the passion and loyalty of our fans, which is why we have made fan engagement a strategic priority. While there is a lot more work to do, everyone at the club is aligned on a clear strategy to deliver sustained success on the pitch and a sustainable economic model off it, to the mutual benefit of fans, shareholders, and other stakeholders.” Cliff Baty, Chief Financial Officer, commented, “Our financial results for fiscal 2022 reflect a recovery from the pandemic, a full return of fans and new commercial partnerships offset by increased investment in the playing squad. Our results have been adversely affected by the absence of a summer tour in July 2021, material exceptional and increased utility costs, and the impact of the weakening of sterling on our non-cash finance costs. Looking forward to fiscal 2023, the Club is guiding to revenues of £580 million to £600 million despite participation in the Europa League, and adjusted EBITDA of £100 million to £110 million, reflecting the continued playing squad investment.” Football We have achieved a series of milestones in the strengthening of our football operations during fiscal 2022, including: Appointment of Erik ten Hag as manager in May 2022 Recruitment of five regular starters for the Men’s first team and seven new players for the Women’s team Manchester United Women finished fourth in the 2021/22 Women’s Super League Three Manchester United players featured in the England team which won the UEFA Women’s European Championship in July, and a fourth joined the club after the tournament Men’s Academy Under-18s team won the FA Youth Cup at Old Trafford for a record 11th time, in front of over 67,000 fans; the women’s Under-21s won the FA WSL Academy League title and the WSL Academy Cup August 2022 marked 90 years since the inception of Manchester United’s Youth Development programme and we continue to extend our record of having an Academy graduate in every first team squad since 1937, spanning over 4,150 games Ongoing strengthening of our scouting and recruitment operations, including the hiring of a new Director of Data Science, and investment in ongoing upgrades of our Carrington training ground Fan Engagement Strengthening engagement with fans is a key strategic priority, and includes the following initiatives: Since its inception in January, the Club held two quarterly meetings of our Fans’ Advisory Board, a new channel for board-level dialogue between fan representatives and the club, with each meeting attended by Chairman Joel Glazer The Premier League introduced a Fan Engagement Standard which extends the current cap on away ticket prices and mandates the introduction of Fan Advisory Boards by all clubs General Admission Season Ticket prices were kept frozen for an 11th season Reformed season ticket policies to give fans more choice and flexibility in the purchase of Cup tickets Appointed the club’s first Head of Fan Engagement Facilities – Venue and Operations In addition to record ticket sales for the 2022/23 season, Venue and Operations further achieved: Record number of global memberships sold including sell-out of a new Premium Membership tier Record number of Executive Club renewals with the fastest sell-out ever at record revenue levels A 55% increase in Women’s season tickets sold for the upcoming season A return to normal pre-season Tour operations which generated record Tour revenues with over 350,000 fans in attendance across three continents, four countries and five cities Old Trafford will also host the Rugby League World Cup final in November 2022 and a third Women’s Super League fixture against Aston Villa in December 2022 Partnerships A strong year of new or renewed partnership deals included: Launched three new principal partnerships Signed five new global partnerships Renewed eight global and regional partnerships Club held its first in person #ILoveUnited event since the onset of the pandemic in Miami in April 2022 with more than 2,000 fans in attendance featuring activations from 22 global partners Digital Products & Experiences Content-led digital fan engagement continues to connect our club with our fans around the world and contributed to record e-commerce sales. Other digital initiatives completed, or in progress, include: Club achieved record e-commerce revenue for fiscal 2022 at nearly double fiscal 2021 revenues Launch of an upgraded Club app, fully integrated with MUTV content; achieved a record number of subscriptions, registrations, and daily active users and was the number one downloaded sports app in over 100 markets Over 2.5 million app users watched Tour match content via our Club app across 220 markets contributing to record breaking engagement and video views Club generated more than 2.8 billion digital interactions (up 72% vs. fiscal 2021) and 7.3 billion video views across all global platforms earning the distinction of most engaging sports team for the 2021/22 season Momentum continues into fiscal 2023 as club achieved record first week e-commerce sales for the new 2022/23 home and away kit launches Creation of new Digital Products & Experiences department to drive innovation and new revenue streams in areas such as NFTs, among other new initiatives 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 cap of 70% of operating revenue on men’s squad 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 per share) Twelve months ended 30 June Three months ended 30 June 2022 2021 Change 2022 2021 Change Commercial revenue 257.8 232.2 11.0% 63.4 51.8 22.4% Broadcasting revenue 214.9 254.8 (15.7%) 33.7 39.9 (15.5%) Matchday revenue 110.5 7.1 1456.3% 21.4 2.3 830.4% Total revenue 583.2 494.1 18.0% 118.5 94.0 26.1% Adjusted EBITDA(1) 81.1 95.1 (14.7%) (8.4) (10.5) 20.0% Operating loss (87.4) (36.9) 136.9% (60.7) (36.7) 65.4% Loss for the period (i.e. net loss) (115.5) (92.2) 25.3% (70.7) (107.7) (34.4%) Basic loss per share (pence) (70.86) (56.60) 25.2% (43.46) (66.08) (34.2%) Adjusted loss for the period (i.e. adjusted net loss)(1) (34.0) (44.7) (23.9%) (20.2) (33.7) (40.1%) Adjusted basic loss per share (pence)(1) (20.83) (27.41) (24.0%) (12.38) (20.67) (40.1%) Non-current and current borrowings 636.1 530.2 20.0% 636.1 530.2 20.0% Cash and cash equivalents 121.2 110.7 9.5% 121.2 110.7 9.5% Net debt(1)/(2) 514.9 419.5 22.7% 514.9 419.5 22.7% (1) Adjusted EBITDA, adjusted loss for the period, adjusted basic loss per share and net debt are non-IFRS measures. See “Non-IFRS Measures: Definitions and Use” on page 8 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 at 30 June 2022 reflect the impact of a £100.0 million drawdown on our revolving facilities. The increase in net debt is primarily due to £64.6 million of unrealized foreign exchange losses on retranslation of USD borrowings plus a further £40.0 million drawdown on our revolving facilities, partially offset by a £10.5 million increase in cash and cash equivalents. Outlook For fiscal 2023, the company expects total revenues to be in a range of £580 million to £600 million, despite participation in the Europa League, and adjusted EBITDA to be in a range of £100 million to £110 million, reflecting the continued playing squad investment. Further, quarterly results will be impacted by the postponement of two matches which were delayed due to a period of mourning after the Queen’s passing and have yet to be rescheduled, as well as the timing of the 2022 FIFA World Cup, which will begin late-November and continue through late December. Phasing of Premier League games Quarter 1 Quarter 2 Quarter 3 Quarter 4 Total 2022/23 season 8* 10 10 10 38 2021/22 season 6 12 11 9 38 *Note: Two matches scheduled in September 2022 were postponed Revenue Analysis Commercial Commercial revenue for the year was £257.8 million, an increase of £25.6 million, or 11.0%, over the prior year. Sponsorship revenue was £147.9 million, an increase of £7.7 million, or 5.5%, over the prior year, primarily due to the impact of new sponsorship agreements. The prior year was affected by COVID-19 related variations; and Retail, Merchandising, Apparel & Product Licensing revenue was £109.9 million, an increase of £17.9 million, or 19.5%, over the prior year, primarily due to the closure of the Megastore in the prior year and the return of fans in the current year. For the quarter, commercial revenue was £63.4 million, an increase of £11.6 million, or 22.4%, over the prior year quarter. Sponsorship revenue was £37.2 million, an increase of £7.1 million, or 23.6% over the prior year quarter, primarily due to the impact of new sponsorship agreements; and Retail, Merchandising, Apparel & Product Licensing revenue was £26.2 million, an increase of £4.5 million, or 20.7%, over the prior year quarter, primarily due to the return of fans and increased marketing activity. Broadcasting Broadcasting revenue for the year was £214.9 million, a decrease of £39.9 million, or 15.7%, over the prior year, primarily due to playing twenty-two fewer home and away games across all competitions compared to the prior year. Broadcasting revenue for the quarter was £33.7 million, a decrease of £6.2 million, or 15.5%, over the prior year quarter, primarily due to playing five fewer home and away games across all competitions and the impact of our men’s first team finishing 6th in the Premier League compared to 2nd in the prior year. Matchday Matchday revenue for the year was £110.5 million, an increase of £103.4 million, or 1456.3%, over the prior year, due to the return of fans to Old Trafford. In the prior year, all matches prior to the final home match of the season were played behind closed doors due to COVID-19 restrictions. Matchday revenue for the quarter was £21.4 million, an increase of £19.1 million, or 830.4%, over the prior year quarter, due to the return of fans to Old Trafford. Other Financial Information Operating expenses Total operating expenses for the year were £692.6 million, an increase of £154.2 million, or 28.6%, over the prior year. Employee benefit expenses Employee benefit expenses for the year were £384.2 million, an increase of £61.6 million, or 19.1%, over the prior year, due to investment in the first team playing squad. Other operating expenses Other operating expenses for the year were £117.9 million, an increase of £41.5 million, or 54.3%, over the prior year. 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, all but one home game were played behind closed doors. Depreciation, impairment and amortization Depreciation and impairment for the year was £14.3 million, a decrease of £0.7 million, or 4.7%, over the prior year. Amortization for the year was £151.5 million, an increase of £27.1 million, or 21.8%, over the prior year. The unamortized balance of registrations at 30 June 2022 was £316.2 million. Exceptional items Exceptional items for the year were a cost of £24.7 million. This cost includes compensation due to former men’s first team managers, certain members of the playing, coaching and scouting staff, and certain non-playing staff. The cost also includes additional contributions we expect to pay towards the Football League pension scheme deficit based upon the latest actuarial valuation. Exceptional items for the prior year were £nil. Profit on disposal of intangible assets Profit on disposal of intangible assets for the year was £21.9 million, compared to £7.4 million for the prior year. Net finance (costs)/income Net finance costs for the year were £62.2 million, compared to net finance income of £12.9 million for the prior year, an unfavorable movement of £75.1 million, primarily due to an unfavorable swing in foreign exchange rates resulting in unrealized foreign exchange losses on unhedged USD borrowings in the current year compared to unrealized foreign exchange gains in the prior year. Income tax The income tax credit for the year was £34.1 million, compared to an expense of £68.2 million in the prior year. The credit in the year is primarily a result of deferred tax assets recognised in respect of losses arising in the year. The prior year expense arose from the write off of US deferred tax assets. Cash flows Overall cash and cash equivalents (including the effects of exchange rate movements) increased by £10.6 million in the year, compared to an increase of £59.2 million in the prior year. Net cash inflow from operating activities for the year was £96.4 million, a decrease of £16.7 million compared to a net cash inflow of £113.1 million for the prior year. This is primarily due to reduced broadcasting revenues as a result of fewer games played in the year, partially offset by the return of fans to Old Trafford. Net capital expenditure on property, plant and equipment for the year was £8.3 million, an increase of £2.1 million over the prior year. Net capital expenditure on intangible assets for the year was £85.1 million, a decrease of £7.1 million over the prior year. Net cash inflow from financing activities for the year was £5.0 million, compared to net cash inflow of £47.6 million in the prior year. Current year cash inflow includes a drawdown of £40.0 million on our revolving facilities, net of dividends paid of £33.6 million. Net debt Net Debt as of 30 June 2022 was £514.9 million, compared to £419.5 million as of 30 June 2021, an increase of £95.4 million primarily due to £64.6 million of unrealized foreign exchange losses on retranslation of USD borrowings in addition to a further drawdown on our revolving facilities of £40.0 million, partially offset by a £10.5 million increase in cash and cash equivalents. Conference Call Details The Company’s conference call to review fiscal 2022 and fourth quarter results will be broadcast live over the internet today, 22 September 2022 at 8:00 a.m. Eastern Time and will be available on Manchester United’s investor relations website at http://ir.manutd.com. Thereafter, a replay of the webcast will be available for thirty days. 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) as supplemented by the risk factors contained in the Company’s other filings with the Securities and Exchange Commission. Statement Regarding Unaudited Financial Information The unaudited financial information set forth is preliminary and subject to adjustments. The audit of the financial statements and related notes to be included in our annual report on Form 20-F for the year ended 30 June 2022 is still in progress. Adjustments to the financial statements may be identified when audit work is completed, which could result in significant differences from this preliminary unaudited financial information. Non-IFRS Measures: Definitions and Use 1. Adjusted EBITDA Adjusted EBITDA is defined as profit/(loss) for the period before depreciation and impairment, amortization, profit 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, impairment and amortization), material volatile items (primarily profit on disposal of intangible assets), capital structure (primarily finance income/costs), 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 for the period (i.e. adjusted net loss) Adjusted loss 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 for the period to adjusted loss for the period is presented in supplemental note 3. 3. Adjusted basic and diluted loss per share Adjusted basic and diluted loss per share are calculated by dividing the adjusted loss for the period by the weighted average number of ordinary shares in issue during the period. Adjusted diluted loss 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 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 Twelve months ended 30 June Three months ended 30 June 2022 2021 2022 2021 Revenue Commercial % of total revenue 44.2% 47.0% 53.5% 55.1% Broadcasting % of total revenue 36.8% 51.6% 28.4% 42.5% Matchday % of total revenue 19.0% 1.4% 18.1% 2.4% 2021/22 Season 2020/21 Season Carryover 2019/20 Season 2021/22 Season 2020/21 Season Home Matches Played PL 19 19 3 4 5 UEFA competitions 4 7 1 – 2 Domestic Cups 3 4 – – – Away Matches Played PL 19 19 3 5 4 UEFA competitions 4 8 2 – 3 Domestic Cups – 4 1 – – Other Employees at period end 1,068 971 1,068 971 Employee benefit expenses % of revenue 65.9% 65.3% 81.1% 89.1% CONSOLIDATED STATEMENT OF PROFIT OR LOSS (unaudited; in £ thousands, except per share and shares outstanding data)   Twelve months ended 30 June Three months ended 30 June 2022 2021 2022 2021 Revenue from contracts with customers 583,201 494,117 118,452 94,009 Operating expenses (692,520 ) (538,424 ) (183,330 ) (137,848 ) Profit on disposal of intangible assets 21,935 7,381 4,056 7,122 Operating loss (87,384 ) (36,926 ) (60,822 ) (36,717 ) Finance costs (85,915 ) (36,411 ) (46,053 ) (6,619 ) Finance income 23,676 49,310 15,048 1,235 Net finance (costs)/income (62,239 ) 12,899 (31,005 ) (5,384 ) Loss before tax (149,623 ) (24,027 ) (91,827 ) (42,101 ) Income tax credit/(expense) 34,113 (68,189 ) 20,985 (65,562 ) Loss for the period (115,510 ) (92,216 ) (70,842 ) (107,663 ) Basic and diluted loss per share: Basic and diluted loss per share (pence) (1) (70.86 ) (56.60 ) (43.46 ) (66.08 ) Weighted average number of ordinary shares used as the denominator in calculating basic and diluted loss per share (thousands) (1) 163,001 162,939 163,003 162,939 (1) For the twelve and three months ended 30 June 2022 and the twelve and three months ended 30 June 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 30 June 2022 2021 ASSETS Non-current assets Property, plant and equipment 242,661 247,059 Right-of-use assets 4,072 4,383 Investment properties 20,273 20,553 Intangible assets 743,278 754,467 Trade receivables 29,757 20,404 Derivative financial instruments 16,462 499 1,056,503 1,047,365 Current assets Inventories 2,200 2,080 Prepayments 15,534 7,407 Contract assets – accrued revenue 36,239 40,544 Trade receivables 49,210 50,370 Other receivables 1,569 460 Income tax receivable 4,590 1,108 Derivative financial instruments 6,597 318 Cash and cash equivalents 121,223 110,658 237,162 212,945 Total assets 1,293,665 1,260,310 CONSOLIDATED BALANCE SHEET (continued) (unaudited; in £ thousands)   As of 30 June 2022 2021 EQUITY AND LIABILITIES Equity Share capital 53 53 Share premium 68,822 68,822 Treasury shares (21,305 ) (21,305 ) Merger reserve 249,030 249,030 Hedging reserve 950 (10,436 ) Retained (deficit)/earnings (170,042 ) (13,652 ) 127,508 272,512 Non-current liabilities Deferred tax liabilities 7,402 35,546 Contract liabilities – deferred revenue 16,697 22,942 Trade and other payables 102,347 67,517 Borrowings 530,365 465,049 Lease liabilities 2,869 3,083 Derivative financial instruments 49 5,472 Provisions 11,586 4,157 671,315 603,766 Current liabilities Contract liabilities – deferred revenue 165,847 117,984 Trade and other payables 220,587 192,661 Income tax liabilities – 6,036 Borrowings 105,757 65,187 Lease liabilities 1,561 1,257 Derivative financial instruments 32 262 Provisions 1,058 645 494,842 384,032 Total equity and liabilities 1,293,665 1,260,310 CONSOLIDATED STATEMENT OF CASH FLOWS (unaudited; in £ thousands)   Twelve months ended 30 June Three months ended 30 June 2022 2021 2022 2021 Cash flows from operating activities Cash generated from operations (see supplemental note 4) 121,704 137,778 43,876 27,614 Interest paid (20,642 ) (20,542 ) (2,405 ) (1,680 ) Interest received 145 3 140 1 Tax paid (4,836 ) (4,156 ) (489 ) (1,128 ) Net cash inflow from operating activities 96,371 113,083 41,122 24,807 Cash flows from investing activities Payments for property, plant and equipment (8,323 ) (6,241 ) (2,100 ) (1,301 ) Payments for intangible assets (115,415 ) (138,189 ) (14,081 ) (11,629 ) Proceeds from sale of intangible assets 30,307 45,996 10,066 13,916 Payments for derivative financial assets – (939 ) – – Net cash (outflow)/inflow from investing activities (93,431 ) (99,373 ) (6,115 ) 986 Cash flows from financing activities Proceeds from borrowings 40,000 60,000 – – Principal elements of lease payments (1,407 ) (1,641 ) (123 ) (410 ) Dividends paid (33,553 ) (10,718 ) (11,992 ) – Net cash inflow/(outflow) from financing activities 5,040 47,641 (12,115 ) (410 ) Net increase in cash and cash equivalents 7,980 61,351 22,892 25,383 Cash and cash equivalents at beginning of period 110,658 51,539 95,791 84,715 Effects of exchange rate changes on cash and cash equivalents 2,585 (2,232 ) 2,540 560 Cash and cash equivalents at end of period 121,223 110,658 121,223 110,658 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 for the period to adjusted EBITDA Twelve months ended 30 June Three months ended 30 June 2022 £’000 2021 £’000 2022 £’000 2021 £’000 Loss for the period (115,510 ) (92,216 ) (70,842 ) (107,663 ) Adjustments: Income tax (credit)/expense (34,113 ) 68,189 (20,985 ) 65,562 Net finance costs/(income) 62,239 (12,899 ) 31,005 5,384 Profit on disposal of intangible assets (21,935 ) (7,381 ) (4,056 ) (7,122 ) Exceptional items 24,692 – 14,700 – Amortization 151,462 124,398 38,231 29,668 Depreciation and impairment 14,314 14,959 3,523 3,715 Adjusted EBITDA 81,149 95,050 (8,424 ) (10,456 ) 3 Reconciliation of loss for the period to adjusted loss for the period and adjusted basic and diluted loss per share Twelve months ended 30 June Three months ended 30 June 2022 £’000 2021 £’000 2022 £’000 2021 £’000 Loss for the period (115,510 ) (92,216 ) (70,842 ) (107,663 ) Exceptional items 24,692 – 14,700 – Foreign exchange losses/(gains) on unhedged US dollar denominated borrowings 58,738 (48,015 ) 37,076 (1,060 ) Foreign exchange losses immediately reclassified from the hedging reserve following change in contract currency denomination of future revenues – 14,631 – – Fair value movement on embedded foreign exchange derivatives 23,205 881 14,503 520 Income tax (credit)/expense (34,113 ) 68,189 (20,985 ) 65,562 Adjusted loss before tax (42,988 ) (56,530 ) (25,548 ) (42,641 ) Adjusted income tax credit (using a normalized tax rate of 21% (2021: 21%)) 9,027 11,871 5,365 8,955 Adjusted loss for the period (i.e. adjusted net loss) (33,961 ) (44,659 ) (20,183 ) (33,686 ) Adjusted basic and diluted loss per share: Adjusted basic and diluted loss per share (pence)(1) (20.83 ) (27.41 ) (12.38 ) (20.67 ) Weighted average number of ordinary shares used as the denominator in calculating adjusted basic and diluted loss per share (thousands) (1) 163,001 162,939 163,003 162,939 (1) For the twelve and three months ended 30 June 2022 and the twelve and three months ended 30 June 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. 4 Cash generated from operations Twelve months ended 30 June Three months ended 30 June 2022 £’000 2021 £’000 2022 £’000 2021 £’000 Loss for the period (115,510 ) (92,216 ) (70,842 ) (107,663 ) Income tax (credit)/expense (34,113 ) 68,189 (20,985 ) 65,562 Loss before income tax (149,623 ) (24,027 ) (91,827 ) (42,101 ) Adjustments for: Depreciation and impairment 14,314 14,959 3,523 3,715 Amortization 151,462 124,398 38,231 29,668 Profit on disposal of intangible assets (21,935 ) (7,381 ) (4,056 ) (7,122 ) Net finance costs/(income) 62,239 (12,899 ) 31,005 5,384 Non-cash employee benefit expense – equity-settled share-based payments 198 2,085 (1,291 ) (159 ) Foreign exchange losses on operating activities 50 874 356 105 Reclassified from hedging reserve (672 ) 2,239 (481 ) 2,063 Changes in working capital: Inventories (120 ) 106 492 283 Prepayments (8,825 ) (282 ) (3,983 ) 5,026 Contract assets – accrued revenue 4,305 5,422 16,882 9,735 Trade receivables (520 ) 71,695 8,120 (18,121 ) Other receivables (1,109 ) (221 ) (537 ) 1,023 Contract liabilities – deferred revenue 41,618 (49,407 ) 23,440 20,881 Trade and other payables 22,480 5,415 17,170 12,432 Provisions 7,842 4,802 6,832 4,802 Cash generated from operations 121,704 137,778 43,876 27,614

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