Business Wire | Mar 4, 2021 04:05PM EST

Manchester United Plc Reports Second Quarter Fiscal 2021 Results

Mar. 04, 2021

MANCHESTER, England--(BUSINESS WIRE)--Mar. 04, 2021--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 2021 fiscal second quarter ended 31 December 2020.

Management Commentary

Ed Woodward, Executive Vice Chairman, commented, "As we approach a full year since our last game with fans at Old Trafford, we reflect on an extraordinarily challenging 12 months for football and society as a whole. The rapid rollout of vaccines in the UK and beyond gives us confidence that we are now on a path towards normality, including the return of fans to stadia. While the disruption to our operations remains significant, we are pleased by the tremendous resilience the club has demonstrated through the pandemic, underpinned by the dedication of our people and the strength of our commercial business. We have been reminded of the importance of football as a source of community, entertainment and pride to fans around the world, even as we have sorely missed them at Old Trafford. The progress made by Ole and the players this season is clear and our thriving Academy and Women's team are also adding to the optimism we feel about the future on and off the pitch."

Key Financials (unaudited)

Three months Six monthslb million (except earnings per share) ended ended 31 December 31 December

2020 2019 Change 2020 2019 Change

Commercial revenue 62.6 70.6 (11.3%) 122.3 151.0 (19.0%)

Broadcasting revenue 108.7 64.7 68.0% 156.3 97.6 60.1%

Matchday revenue 1.5 33.1 (95.5%) 3.2 55.2 (94.2%)

Total revenue 172.8 168.4 2.6% 281.8 303.8 (7.2%)

Adjusted EBITDA^(1) 70.3 72.1 (2.5%) 91.1 106.9 (14.8%)

Operating profit 48.5 36.5 32.9% 21.4 47.5 (54.9%)



Profit for the period (i.e. net 63.9 35.0 82.6% 33.6 36.1 (6.9%)income)

Basic earnings per share (pence) 39.17 21.27 84.2% 20.60 21.96 (6.2%)

Adjusted profit for the period (i.e. 35.3 25.8 36.8% 10.7 29.7 (64.0%)adjusted net income)^(1)

Adjusted basic earnings per share 21.69 15.67 38.4% 6.57 18.02 (63.5%)(pence)^(1)



Non-current and current borrowings 536.1 492.2 8.9% 536.1 492.2 8.9%

Cash and cash equivalents 80.6 100.9 (20.1%) 80.6 100.9 (20.1%)

Net debt^(1)/(2) 455.5 391.3 16.4% 455.5 391.3 16.4%

(1) Adjusted EBITDA, adjusted profit for the period, adjusted basic earnings 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 at 31 December 2020 reflect the impact a 60.0 million drawdown on our 200 million revolving credit facilities during the quarter. The increase in net debt compared to 31 December 2019 is primarily driven by the loss of 2020/21 season Matchday cash receipts and the impact of deferred sponsorship payments, partially offset by increased broadcasting receipts.

COVID-19 ImpactOperationally, the impact of the pandemic and measures to prevent further spread continues to disrupt our businesses. The Old Trafford Stadium, Museum and Stadium Tour operations remain closed to visitors. The Old Trafford based Megastore was closed to footfall on 31 December 2020 and remains closed as of the date of this report.

Commencement of playing the 2020/21 Premier league fixtures was delayed until 19 September 2020, due to the deferred completion of the 2019/20 season. 2020/21 matches will be played over a more condensed period with most of the current season shortfall being played in the third and fourth quarters, as outlined below.

During the second quarter, the first team played in thirteen Premier League home and away matches, consistent with the prior year quarter. This is in addition to playing six UEFA Champions league home and away matches, compared to five UEFA Europa League matches in the prior year quarter.

During the second quarter, a total of ten home matches were played behind closed doors across all competitions, compared with a total nine home matches with fans in attendance during the prior quarter, creating a significant shortfall in Matchday revenues relative to last year.

The Matchday revenue shortfall has however, been more than offset by Broadcasting revenues given the first teams participation in the UEFA Champions League competition. A large portion of UEFA Champions league broadcasting revenues are attributable to the Group stages of the competition, which was played in full during the second quarter.

Given ongoing uncertainty due to the COVID-19 pandemic, the Company is not providing revenue or adjusted EBITDA guidance for fiscal 2021 at this time.

Phasing of Premier League games Quarter 1 Quarter 2 Quarter 3 Quarter 4 Total

2020/21 season* 2 13 14 9 38

2019/20 remaining season 6 - - - 6

Total FY 2021 8 13 14 9 44

2019/20 season 7 13 9 3 32

2018/19 season 7 13 11 7 38

*Subject to changes in broadcasting scheduling

Working Capital and LiquidityAs of 31 December 2020, the Company had 80.6 million of cash balances together with access to an additional 140.0 million available under the Company's revolving credit facilities. This provides financial flexibility to support the Club through the disruption caused by COVID-19.

Revenue Analysis

CommercialCommercial revenue for the quarter was 62.6 million, a decrease of 8.0 million, or 11.3%, over the prior year quarter.

* Sponsorship revenue was 37.8 million, a decrease of 7.3 million, or 16.2%, over the prior year quarter, primarily due to a one-off sponsorship credit in the prior quarter, combined with the impact of the shirt sponsorship extension. * Retail, Merchandising, Apparel & Product Licensing revenue was 24.8 million, a decrease of 0.7 million, or 2.7%, over the prior year quarter.

BroadcastingBroadcasting revenue for the quarter was 108.7 million, an increase of 44.0 million, or 68.0%, over the prior year quarter, due to participation in the UEFA Champions League.

MatchdayMatchday revenue for the quarter was 1.5 million, a decrease of 31.6 million, or 95.5%, over the prior year quarter, due to all matches being played behind closed doors. Nine home games were played in the prior year quarter with fans in attendance.

Other Financial Information

Operating expensesTotal operating expenses for the quarter were 138.6 million, an increase of 7.4 million, or 5.6%, over the prior year quarter.

Employee benefit expensesEmployee benefit expenses for the quarter were 81.7 million, an increase of 10.8 million, or 15.2%, over the prior year quarter. This is due to contracted increases in player salaries due to participation in the UEFA Champions League and continued investment in the first team playing squad.

Other operating expensesOther operating expenses for the quarter were 20.8 million, a decrease of 4.6 million, or 18.1%, over the prior year quarter, primarily due to reduced business activity as a result of COVID-19. This includes the impact of all matches being played behind closed doors.

Depreciation and amortizationDepreciation for the quarter was 3.6 million, a decrease of 0.1 million or 2.7% over the prior year quarter. Amortization for the quarter was 32.5 million, an increase of 1.3 million, or 4.2%, over the prior year quarter. The unamortized balance of registrations on 31 December 2020 was 350.4 million.

Profit/(loss) on disposal of intangible assetsProfit on disposal of intangible assets for the quarter was 14.3 million, compared to a loss of 0.7 million for the prior year quarter. This is due to the close of the summer transfer window during the current year quarter.

Net finance incomeNet finance income for the quarter was 19.7 million, compared to net finance income of 15.3 million in the prior year quarter. In both the current and prior year quarter, the movement was driven by foreign exchange gains on unhedged USD borrowings. Underlying net finance costs are consistent with the prior year quarter.

Income taxThe income tax expense for the quarter was 4.3 million, compared to 16.8 million in the prior year quarter.

Cash flowsOverall cash and cash equivalents (including the effects of exchange rate movements) increased by 21.7 million in the quarter to 31 December 2020, compared to a decrease of 39.4 million in the prior year quarter.

Net cash outflow from operating activities for the quarter was 1.0 million, a decrease of 14.2 million over the prior year quarter. This is primarily due to lower working capital movements related to Matchday revenue due to matches being played behind closed doors.

Net capital expenditure on property, plant and equipment for the quarter was 1.4 million, a decrease of 8.5 million over the prior year quarter.

Net capital expenditure on intangible assets for the quarter was 35.0 million, an increase of 27.9 million over the prior year quarter.

Net capital expenditure on derivative financial assets for the quarter was 0.9m, compared to nil in the prior year quarter.

Net cash inflow from financing activities for the quarter was 59.6 million, compared to a net cash outflow from financing activities in the prior year quarter of 0.4 million. This is due to a 60.0 million drawdown on the revolving credit facilities in the current year quarter.

Net debtNet Debt as of 31 December 2020 was 455.5 million, an increase of 64.2 million over the year. The increase in net debt compared to 31 December 2019 reflects the loss of 2020/21 season Matchday advance cash receipts, and the impact of deferred sponsorship payments, partially offset by increased broadcasting receipts.

Conference Call DetailsThe Company's conference call to review fiscal 2021 second quarter results will be broadcast live over the internet today, 4 March 2021 at 4:30 p.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 143-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 EBITDAAdjusted EBITDA is defined as profit for the period before depreciation, amortization, profit/loss on disposal of intangible assets, net finance income, 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 profit/loss on disposal of intangible assets and exceptional items), 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 profit for the period to adjusted EBITDA is presented in supplemental note 2.

2. Adjusted profit for the period (i.e. adjusted net income)Adjusted 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%; 2019: 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% (2019: 21%) applicable during the financial year. A reconciliation of profit for the period to adjusted profit for the period is presented in supplemental note 3.

3. Adjusted basic and diluted earnings per shareAdjusted basic and diluted earnings per share are calculated by dividing the adjusted 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 earnings per share are presented in supplemental note 3.

4. Net debtNet debt is calculated as non-current and current borrowings minus cash and cash equivalents.

Key Performance Indicators

Three months Six months ended ended

31 December 31 December

2020 2019 2020 2019

Revenue

Commercial % of total revenue 36.2% 41.9% 43.4% 49.7%

Broadcasting % of total revenue 62.9% 38.4% 55.5% 32.1%

Matchday % of total revenue 0.9% 19.7% 1.1% 18.2%

2020/21 2019/20 2020/21 2019/20 2019/20 Season Season Season Season Season

Home Matches Played

PL 7 6 8 3 10

UEFA competitions 3 2 3 1 3

Domestic Cups - 1 - - 2

Away Matches Played

PL 6 7 7 3 10

UEFA competitions 3 3 3 2 3

Domestic Cups 1 1 3 1 1

Other

Employees at period end 991 979 991 979

Employee benefit expenses % of 47.3% 42.1% 54.5% 46.5%revenue

CONSOLIDATED STATEMENT OF PROFIT OR LOSS(unaudited; in lb thousands, except per share and shares outstanding data) Three months ended Six months ended 31 December 31 December

2020 2019 2020 2019

Revenue from contracts with 172,850 168,455 281,822 303,826 customers

Operating expenses (138,659 ) (131,253 ) (262,132 ) (267,674 )

Profit/(loss) on disposal of 14,278 (715 ) 1,683 11,302 intangible assets

Operating profit 48,469 36,487 21,373 47,454

Finance costs (5,722 ) (5,386 ) (25,296 ) (11,912 )

Finance income 25,424 20,644 45,019 18,732

Net finance income 19,702 15,258 19,723 6,820

Profit before income tax 68,171 51,745 41,096 54,274

Income tax expense (4,343 ) (16,738 ) (7,538 ) (18,139 )

Profit for the period 63,828 35,007 33,558 36,135



Basic earnings per share:

Basic earnings per share (pence) 39.17 21.27 20.60 21.96

Weighted average number of ordinaryshares used as the denominator in 162,939 164,573 162,939 164,573 calculating basic earnings pershare (thousands)

Diluted earnings per share:

Diluted earnings per share (pence) 39.07 21.25 20.54 21.94

Weighted average number of ordinaryshares and potential ordinaryshares used as the denominator in 163,385 164,746 163,385 164,737 calculating diluted earnings pershare (thousands) ^(1)

CONSOLIDATED BALANCE SHEET (unaudited; in lb thousands)

As of

31 December 2020

30 June 2020

31 December 2019

ASSETS

Non-current assets

Property, plant and equipment

251,183

254,439

253,523

Right-of-use assets

3,930

4,559

5,168

Investment properties

20,692

20,827

24,792

Intangible assets

777,473

775,170

758,476

Deferred tax asset

61,786

58,362

53,862

Trade receivables

34,333

43,694

40,586

Derivative financial instruments

536

1,609

-

1,149,933

1,158,660

1,136,407

Current assets

Inventories

2,792

2,186

2,535

Prepayments

16,183

6,503

13,211

Contract assets - accrued revenue

65,795

45,966

78,098

Trade receivables

62,907

115,985

26,313

Other receivables

371

239

614

Income tax receivable

1,223

1,214

618

Derivative financial instruments

1,776

1,174

-

Cash and cash equivalents

80,620

51,539

100,856

231,667

224,806

222,245

Total assets

1,381,600

1,383,466

1,358,652

CONSOLIDATED BALANCE SHEET(unaudited; in lb thousands)

As of

31 December 30 June 31 December 2020 2020 2019

ASSETS

Non-current assets

Property, plant and equipment 251,183 254,439 253,523

Right-of-use assets 3,930 4,559 5,168

Investment properties 20,692 20,827 24,792

Intangible assets 777,473 775,170 758,476

Deferred tax asset 61,786 58,362 53,862

Trade receivables 34,333 43,694 40,586

Derivative financial instruments 536 1,609 -

1,149,933 1,158,660 1,136,407

Current assets

Inventories 2,792 2,186 2,535

Prepayments 16,183 6,503 13,211

Contract assets - accrued revenue 65,795 45,966 78,098

Trade receivables 62,907 115,985 26,313

Other receivables 371 239 614

Income tax receivable 1,223 1,214 618

Derivative financial instruments 1,776 1,174 -

Cash and cash equivalents 80,620 51,539 100,856

231,667 224,806 222,245

Total assets 1,381,600 1,383,466 1,358,652

CONSOLIDATED BALANCE SHEET (continued) (unaudited; in lb thousands)

As of

31 December 2020

30 June 2020

31 December 2019

EQUITY AND LIABILITIES

Equity

Share capital

53

53

53

Share premium

68,822

68,822

68,822

Treasury shares

(21,305

)

(21,305

)

-

Merger reserve

249,030

249,030

249,030

Hedging reserve

(13,529

)

(32,565

)

(26,247

)

Retained earnings

122,508

87,197

169,341

405,579

351,232

460,999

Non-current liabilities

Deferred tax liabilities

30,851

31,337

37,766

Contract liabilities - deferred revenue

13,772

18,759

23,605

Trade and other payables

60,809

51,322

31,241

Borrowings

471,026

520,010

486,852

Lease liabilities

3,255

3,326

3,626

Derivative financial instruments

7,390

9,136

2,323

587,103

633,890

585,413

Current liabilities

Contract liabilities - deferred revenue

137,447

171,574

143,577

Trade and other payables

173,008

216,093

152,093

Income tax liabilities

12,607

4,005

9,429

Borrowings

65,114

5,605

5,288

Lease liabilities

568

1,067

1,622

Derivative financial instruments

174

-

231

388,918

398,344

312,240

Total equity and liabilities

1,381,600

1,383,466

1,358,652

CONSOLIDATED BALANCE SHEET (continued)(unaudited; in lb thousands)

As of

31 December 30 June 31 December 2020 2020 2019

EQUITY AND LIABILITIES

Equity

Share capital 53 53 53

Share premium 68,822 68,822 68,822

Treasury shares (21,305 ) (21,305 ) -

Merger reserve 249,030 249,030 249,030

Hedging reserve (13,529 ) (32,565 ) (26,247 )

Retained earnings 122,508 87,197 169,341

405,579 351,232 460,999

Non-current liabilities

Deferred tax liabilities 30,851 31,337 37,766

Contract liabilities - deferred revenue 13,772 18,759 23,605

Trade and other payables 60,809 51,322 31,241

Borrowings 471,026 520,010 486,852

Lease liabilities 3,255 3,326 3,626

Derivative financial instruments 7,390 9,136 2,323

587,103 633,890 585,413

Current liabilities

Contract liabilities - deferred revenue 137,447 171,574 143,577

Trade and other payables 173,008 216,093 152,093

Income tax liabilities 12,607 4,005 9,429

Borrowings 65,114 5,605 5,288

Lease liabilities 568 1,067 1,622

Derivative financial instruments 174 - 231

388,918 398,344 312,240

Total equity and liabilities 1,381,600 1,383,466 1,358,652

CONSOLIDATED STATEMENT OF CASH FLOWS (unaudited; in lb thousands)

Three months ended 31 December

Six months ended 31 December

2020

2019

2020

2019

Cash flows from operating activities

Cash generated from/(used in) operations (see supplemental note 4)

2,100

(13,833

)

74,510

(18,439

)

Interest paid

(2,498

)

(1,585

)

(10,184

)

(10,506

)

Interest received

-

406

1

1,050

Tax paid

(641

)

(208

)

(3,056

)

(1,697

)

Net cash (outflow)/inflow from operating activities

(1,039

)

(15,220

)

61,271

(29,592

)

Cash flows from investing activities

Payments for property, plant and equipment

(1,339

)

(9,879

)

(3,158

)

(13,030

)

Payments for intangible assets

(37,968

)

(11,598

)

(108,775

)

(187,311

)

Proceeds from sale of intangible assets

2,991

4,530

22,182

22,009

Payments for derivative financial assets

(939

)

-

(939

)

-

Net cash outflow from investing activities

(37,255

)

(16,947

)

(90,690

)

(178,332

)

Cash flows from financing activities

Proceeds from borrowings

60,000

-

60,000

-

Principal elements of lease payments

(412

)

(382

)

(820

)

(761

)

Net cash inflow/(outflow) from financing activities

59,588

(382

)

59,180

(761

)

Net increase/(decrease) in cash and cash equivalents

21,294

(32,549

)

29,761

(208,685

)

Cash and cash equivalents at beginning of period

58,940

140,307

51,539

307,637

Effects of exchange rate changes on cash and cash equivalents

386

(6,902

)

(680

)

1,904

Cash and cash equivalents at end of period

80,620

100,856

80,620

100,856

SUPPLEMENTAL NOTES

1 General informationManchester 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 profit for the period to adjusted EBITDA

CONSOLIDATED STATEMENT OF CASH FLOWS(unaudited; in lb thousands)

Three months ended Six months ended 31 December 31 December

2020 2019 2020 2019

Cash flows from operating activities

Cash generated from/(used in) 2,100 (13,833 ) 74,510 (18,439 )operations (see supplemental note 4)

Interest paid (2,498 ) (1,585 ) (10,184 ) (10,506 )

Interest received - 406 1 1,050

Tax paid (641 ) (208 ) (3,056 ) (1,697 )

Net cash (outflow)/inflow from (1,039 ) (15,220 ) 61,271 (29,592 )operating activities

Cash flows from investing activities

Payments for property, plant and (1,339 ) (9,879 ) (3,158 ) (13,030 )equipment

Payments for intangible assets (37,968 ) (11,598 ) (108,775 ) (187,311 )

Proceeds from sale of intangible 2,991 4,530 22,182 22,009 assets

Payments for derivative financial (939 ) - (939 ) - assets

Net cash outflow from investing (37,255 ) (16,947 ) (90,690 ) (178,332 )activities

Cash flows from financing activities

Proceeds from borrowings 60,000 - 60,000 -

Principal elements of lease payments (412 ) (382 ) (820 ) (761 )

Net cash inflow/(outflow) from 59,588 (382 ) 59,180 (761 )financing activities

Net increase/(decrease) in cash and 21,294 (32,549 ) 29,761 (208,685 )cash equivalents

Cash and cash equivalents at 58,940 140,307 51,539 307,637 beginning of period

Effects of exchange rate changes on 386 (6,902 ) (680 ) 1,904 cash and cash equivalents

Cash and cash equivalents at end of 80,620 100,856 80,620 100,856 period

SUPPLEMENTAL NOTES

1 General informationManchester 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 profit for the period to adjusted EBITDA

Three months ended Six months ended 31 December 31 December

2020 2019 2020 2019 lb'000 lb'000 lb'000 lb'000

Profit for the period 63,828 35,007 33,558 36,135

Adjustments:

Income tax expense 4,343 16,738 7,538 18,139

Net finance income (19,702 ) (15,258 ) (19,723 ) (6,820 )

(Profit)/loss on disposal of intangible (14,278 ) 715 (1,683 ) (11,302 )assets

Amortization 32,459 31,257 64,002 63,444

Depreciation 3,663 3,626 7,449 7,268

Adjusted EBITDA 70,313 72,085 91,141 106,864

3 Reconciliation of profit for the period to adjusted profit for the period and adjusted basic and diluted earnings per share

Three months ended Six months ended 31 December 31 December



2020 2019 2020 2019 lb'000 lb'000 lb'000 lb'000

Profit for the period 63,828 35,007 33,558 36,135

Foreign exchange gains on unhedged US (23,752 ) (19,522 ) (42,835 ) (17,074 )dollar denominated borrowings

Foreign exchange losses immediatelyreclassified from the hedging reserve - - 14,837 - following change in contract currencydenomination of future revenues

Fair value movement on embeddedforeign exchange derivatives/foreign 316 425 446 346 currency options

Income tax expense 4,343 16,738 7,538 18,139

Adjusted profit before income tax 44,735 32,648 13,544 37,546



Adjusted income tax expense (using a (9,394 ) (6,856 ) (2,844 ) (7,885 )normalized tax rate of 21% (2019:21%))

Adjusted profit for the period (i.e. 35,341 25,792 10,700 29,661 adjusted net income)



Adjusted basic earnings per share:

Adjusted basic earnings per share 21.69 15.67 6.57 18.02 (pence)

Weighted average number of ordinaryshares used as the denominator in 162,939 164,573 162,939 164,573 calculating adjusted basic earningsper share (thousands)

Adjusted diluted earnings per share:

Adjusted diluted earnings per share 21.63 15.66 6.55 18.01 (pence)

Weighted average number of ordinaryshares and potential ordinary sharesused as the denominator in calculating 163,385 164,746 163,385 164,737 adjusted diluted earnings per share(thousands)

4 Cash generated from/(used in) operations

Six months Three months ended 31 December ended 31 December

2020 2019 2020 2019 lb'000 lb'000 lb'000 lb'000

Profit for the period 63,828 35,007 33,558 36,135

Income tax expense 4,343 16,738 7,538 18,139

Profit before income tax 68,171 51,745 41,096 54,274

Adjustments for:

Depreciation 3,663 3,626 7,449 7,268

Amortization 32,459 31,257 64,002 63,444

(Profit)/loss on disposal of (14,278 ) 715 (1,683 ) (11,302 )intangible assets

Net finance income (19,702 ) (15,258 ) (19,723 ) (6,820 )

Non-cash employee benefit expense - 488 227 1,753 365 equity-settled share-based payments

Foreign exchange losses/(gains) on 50 87 1,174 (286 )operating activities

Reclassified from hedging reserve 114 2,957 (412 ) 5,811

Changes in working capital:

Inventories 750 129 (606 ) (405 )

Prepayments 3,519 2,171 (9,908 ) (181 )

Contract assets - accrued revenue (38,920 ) (38,165 ) (19,829 ) (38,566 )

Trade receivables 9,950 6,160 63,256 8,504

Other receivables 67 14,655 (132 ) 574

Contract liabilities - deferred (41,234 ) (66,449 ) (39,114 ) (56,318 )revenue

Trade and other payables (2,997 ) (7,690 ) (12,813 ) (44,801 )

Cash generated from/(used in) 2,100 (13,833 ) 74,510 (18,439 )operations

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