United 2022/21 financial results – headlines by MUST advisor Andy Green

Andy Green has provided some quick observations on the figures below. 
Forget the headline £115m loss, it’s skewed by various accounting items (especially currency moves).  
The key figures are EBITDA of £81m, cash interest of £21m and net cash transfer spend of £85m. So the club is losing money but not at the rate suggested by headline accounting figure. 
Because of the underlying (cash) loss, the company didn’t generate cash to pay the £33.6m dividend. 
The club drew down further debt (£40m from the RCF in the quarter ended December 2021) 
This debt drawdown (and positive £/$ movement impacting £ value of $ cash balance) explain why cash was up slightly year-on-year at £121m (before most summer transfer activity), despite the cash losses and dividend payments. 
The club is guiding to EBITDA of £100-110m this year. 

  • Revenue up 18% on prior year due to post-Covid matchday recovery. 
  • Broadcasting down as expected post-Covid 
  • Commercial shows decent growth of 11% 
  • Total expenses (excluding depreciation and amortisation) up 25.8%. Two factors at work: 
    • Salary costs up £61.6m or 19.1% due to player recruitment. 
    • Return of fans, leads to 54% rise in other operating expenses 
  • With costs rising faster than revenue, EBITDA fell 15% to £81.1m 
  • EBITDA margin down to 13.9% from 19.2% 
  • Most of £24.7m exceptional cost relates to sacking of Ole, Rangnick and staff. 
Finance costs and debt 
  • Finance costs of £62.2m vs gain of £12.9m in prior year mainly due to weakness of £ vs. $ which increases £ value of $ denominated debt (note this is cost in P&L not cash cost). 
  • Cash interest cost £20.6m. Blended rate (on average opening and closing debt) of 3.5%. 
  • Gross debt £636.1m up from £530.2. The club drew down £40m of its RCF during the year. The balance of the increase comes from the £/$ movement described above. 
Transfer spending 
  • Gross cash spend on players £115.4m (compared to £138.2m in prior year). Receipts from sales £30.3m, giving net (cash) spend of £85.1m. 
  • This is period to 30 June so doesn’t include late window signings! 
  • Operating cashflow was £121.7m (down from £137.8m), comprising: 
    • EBITDA £81.1m less o Exceptionals £24.7m plus o Change in working capital £65.3m 
  • After net interest (£20.5m) and tax (£4.8m), free cash-flow was £96.4m Physical capex was £8.3m (i.e. peanuts) and net transfer spend £85.1m 
  • Gives £3m of net cash-flow after investing but before dividends. 

  • Another £12m paid in the quarter, taking total for the year to £33.6m. 

Cash balance 
  • Year-end 30 June : £121.2m 
  • 31 March : £95.8m 
  • 31 December : £87.4m 
  • 30 September  : £98.7m 
  • Prior year-end:  : £110.7m 
Cash up slightly but only because of £40m debt drawdown. 
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