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Withdrawable Share Capital (WSC)
Board & Executives
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.
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.
Year-end 30 June
Cash up slightly but only because of £40m debt drawdown.
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