Manchester United plc (Form: 6-K, Received: 11/16/2018 16:33:29)

Manchester United plc

Management’s discussion and analysis of financial condition and results of operations

GENERAL INFORMATION AND FORWARD-LOOKING STATEMENTS

The following Management’s discussion and analysis of financial condition and results of operations should be read in conjunction with the interim consolidated financial statements and notes thereto included as part of this report. This report contains forward-looking statements. You should not place undue reliance on such statements because they are subject to numerous risks and uncertainties relating to Manchester United plc’s (“the Company”) 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 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 interim report 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 Annual Report on Form 20-F for the year ended 30 June 2018, as filed with the Securities and Exchange Commission on 28 September 2018 (File No. 001-35627).

GENERAL

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 140-year heritage we have won 66 trophies, including a record 20 English league titles, enabling us to develop what we believe is one of the world’s leading sports brands and a global community of 659 million followers. Our large, passionate community provides Manchester United with a worldwide platform to generate significant revenue from multiple sources, including sponsorship, merchandising, product licensing, broadcasting and matchday. We attract leading global companies such as adidas, Aon, General Motors (Chevrolet) and Kohler that want access and exposure to our community of followers and association with our brand.

RESULTS OF OPERATIONS

Manchester United adopted IFRS 9 ‘Financial instruments’ and IFRS 15 ‘Revenue from contracts with customers’ with effect from 1 July 2018. The implementation of IFRS 9 did not have an impact on the group’s financial statements as at 1 July 2018. The implementation of IFRS 15 did have an impact on the group’s financial statements as at 1 July 2018 and consequently prior year amounts have been restated. Further details can be found in note 32 to the interim consolidated financial statements.

Three months ended 30 September 2018 as compared to the three months ended 30 September 2017 (as restated)

	Three months ended 30 September (in £ millions)		% Change 2018 over
	2018	2017	2017
Revenue	135.0	143.7	(6.1	)%
Commercial revenue	75.9	80.5	(5.7	)%
Broadcasting revenue	42.8	40.8	4.9	%

Matchday revenue	16.3		22.4		(27.2	)%
Total operating expenses	(143.5	)	(143.1	)	0.3	%
Employee benefit expenses	(77.0	)	(69.9	)	10.2	%
Other operating expenses	(28.6	)	(34.5	)	(17.1	)%
Depreciation	(2.8	)	(2.6	)	7.7	%
Amortization	(35.1	)	(36.1	)	(2.8	)%
Profit on disposal of intangible assets	22.4		17.3		29.5	%
Net finance costs	(5.2	)	(0.8	)	550.0	%
Tax expense	(2.1	)	(7.5	)	(72.0	)%

Revenue

Consolidated revenue for the three months ended 30 September 2018 was £135.0 million, a decrease of £8.7 million, or 6.1%, over the three months ended 30 September 2017, as a result of a decrease in revenue in our commercial and matchday sectors, partially offset by an increase in our broadcasting sector, as described below.

Commercial revenue

Commercial revenue for the three months ended 30 September 2018 was £75.9 million, a decrease of £4.6 million, or 5.7%, over the three months ended 30 September 2017.

· Sponsorship revenue for the three months ended 30 September 2018 was £49.6 million, a decrease of £3.6 million, or 6.8%, over the three months ended 30 September 2017, primarily due to a smaller summer tour; and

· Retail, Merchandising, Apparel & Product Licensing revenue for the three months ended 30 September 2018 was £26.3 million, a decrease of £1.0 million, or 3.7%, over the three months ended 30 September 2017, primarily due to playing two fewer home games across all competitions.

Broadcasting revenue

Broadcasting revenue for the three months ended 30 September 2018 was £42.8 million, an increase of £2.0 million, or 4.9%, over the three months ended 30 September 2017.

Matchday revenue

Matchday revenue for the three months ended 30 September 2018 was £16.3 million, a decrease of £6.1 million, or 27.2%, over the three months ended 30 September 2017, primarily due to playing two fewer home games across all competitions.

Total operating expenses

Total operating expenses (defined as employee benefit expenses, other operating expenses, depreciation, amortization and exceptional items) for the three months ended 30 September 2018 were £143.5 million, an increase of £0.4 million, or 0.3%, over the three months ended 30 September 2017.

Employee benefit expenses

Employee benefit expenses for the three months ended 30 September 2018 were £77.0 million, an increase of £7.1 million, or 10.2%, over the three months ended 30 September 2017, primarily due to investment in the first team playing squad.

Other operating expenses

Other operating expenses for the three months ended 30 September 2018 were £28.6 million, a decrease of £5.9 million, or 17.1%, over the three months ended 30 September 2017, primarily due to a smaller summer tour.

Depreciation

Depreciation for the three months ended 30 September 2018 was £2.8 million, an increase of £0.2 million, or 7.7%, over the three months ended 30 September 2017.

Amortization

Amortization, primarily of players’ registrations, for the three months ended 30 September 2018 was £35.1 million, a decrease of £1.0 million, or 2.8%, over the three months ended 30 September 2017. The unamortized balance of registrations at 30 September 2018 was £336.9 million.

Profit on disposal of intangible assets

Profit on disposal of intangible assets for the three months ended 30 September 2018 was £22.4 million compared to a profit of £17.3 million for the three months ended 30 September 2017. The profit on disposal of intangible assets for the three months ended 30 September 2018 primarily related to the disposal of Blind (Ajax), Johnstone (West Bromwich Albion) and sell on fees relating to former players.

Net finance costs

Net finance costs for the three months ended 30 September 2018 were £5.2 million, an increase of £4.4 million, or 550.0%, over the three months ended 30 September 2017, due to unrealised foreign exchange losses on unhedged USD borrowings compared to gains in the prior year period.

Tax

The tax expense for the three months ended 30 September 2018 was £2.1 million, compared to £7.5 million for the three months ended 30 September 2017. The decrease is due in part to a reduction in the US federal corporate income tax rate in December 2017 from 35% to 21%.

LIQUIDITY AND CAPITAL RESOURCES

Our primary cash requirements stem from the payment of transfer fees for the acquisition of players’ registrations, capital expenditure for the improvement of facilities at Old Trafford and the Aon Training Complex, payment of interest on our borrowings, employee benefit expenses, other operating expenses and dividends on our Class A ordinary shares and Class B ordinary shares. Historically, we have met these cash requirements through a combination of operating cash flow and proceeds from the transfer fees from the sale of players’ registrations. Our existing borrowings primarily consist of our secured term loan facility and our senior secured notes. Additionally, although we have not needed to draw any borrowings under our revolving facility since 2009, we have no intention of retiring our revolving facility and may draw on it in the future in order to satisfy our working capital requirements. We manage our cash flow interest rate risk where appropriate using interest rate swaps. Such interest rate swaps have the economic effect of converting borrowings from floating to fixed rates. We have US dollar borrowings that we use to hedge our US dollar commercial revenue exposure. We continue to evaluate our financing options and may, from time to time, take advantage of opportunities to repurchase or refinance all or a portion of our existing indebtedness to the extent such opportunities arise.

We currently intend to continue paying regular semi-annual cash dividends on our Class A ordinary shares and Class B ordinary shares of $0.09 per share from our operating cash flows. The declaration and payment of any future dividends, however, will be at the sole discretion of our board of directors or a committee thereof, and our expectations and policies regarding dividends are subject to change as our business needs, capital requirements or market conditions change.

Our business generates a significant amount of cash from our matchday revenues and commercial contractual arrangements at or near the beginning of our fiscal year, with a steady flow of other cash received throughout the fiscal year. In addition, we generate a significant amount of our cash through advance receipts, including season tickets (which include general admission season tickets and seasonal hospitality tickets), most of which are received prior to the end of June for the following season. Our broadcasting revenue from the Premier League and UEFA are paid periodically throughout the season, with primary payments made in late summer, December, January and the end of the football season. Our sponsorship and other commercial revenue tends to be paid either quarterly or annually in advance. However, while we typically have a high cash balance at the beginning of each fiscal year, this is largely attributable to deferred revenue, the majority of which falls under current liabilities in the consolidated balance sheet, and this deferred revenue is unwound through the income statement over the course of the fiscal year. Over the course of a year, we use our cash on hand to pay employee benefit expenses, other operating expenses,

interest payments and other liabilities as they become due. This typically results in negative working capital movement at certain times during the year. In the event it ever became necessary to access additional operating cash, we also have access to cash through our revolving facility. As of 30 September 2018, we had no borrowings under our revolving facility.

We also maintain a mixture of long-term debt and capacity under our revolving facility in order to ensure that we have sufficient funds available for short-term working capital requirements and for investment in the playing squad and other capital projects.

Our cost base is more evenly spread throughout the fiscal year than our cash inflows. Employee benefit expenses and fixed costs constitute the majority of our cash outflows and are generally paid throughout the 12 months of the fiscal year.

In addition, transfer windows for acquiring and disposing of registrations occur in January and the summer. During these periods, we may require additional cash to meet our acquisition needs for new players and we may generate additional cash through the sale of existing registrations. Depending on the terms of the agreement, transfer fees may be paid or received by us in multiple installments, resulting in deferred cash paid or received. Although we have not historically drawn on our revolving facility during the summer transfer window, if we seek to acquire players with values substantially in excess of the values of players we seek to sell, we may be required to draw on our revolving facility to meet our cash needs.

Acquisition and disposal of registrations also affects our trade receivables and payables, which affects our overall working capital. Our trade receivables include accrued income from sponsors as well as transfer fees receivable from other football clubs, whereas our trade payables include transfer fees and other associated costs in relation to the acquisition of registrations.

Cash Flow

The following table summarizes our cash flows for the three months ended 30 September 2018 and 2017:

	Three months ended 30 September (in £ millions)
	2018		2017
Cash flows from operating activities
Cash generated from operations	123.3		26.9
Net interest paid	(7.1	)	(7.8	)
Tax paid	(1.4	)	(1.2	)
Net cash generated from operating activities	114.8		17.9
Cash flows from investing activities
Payments for property, plant and equipment	(4.9	)	(4.4	)
Payments for intangible assets	(128.6	)	(117.1	)
Proceeds from sale of intangible assets	24.9		32.2
Net cash used in investing activities	(108.6	)	(89.3	)
Cash flows from financing activities
Repayment of borrowings	(3.8	)	(0.1	)
Net cash used in financing activities	(3.8	)	(0.1	)
Net increase/(decrease) in cash and cash equivalents(1)	2.4		(71.5	)

(1) Excludes the effects of exchange rate changes on cash and cash equivalents.

Net cash generated from operating activities

Net cash generated from operations represents our operating results and net movements in our working capital. Our working capital is generally impacted by the timing of cash received from the sale of tickets and hospitality and

other matchday revenues, broadcasting revenue from the Premier League and UEFA and sponsorship and other commercial revenue. Cash generated from operations for the three months ended 30 September 2018 produced a cash inflow of £123.3 million, an increase of £96.4 million from a cash inflow of £26.9 million for the three months ended 30 September 2017.

Additional changes in net cash generated from operating activities generally reflect our finance costs. We currently pay fixed rates of interest on our senior secured notes and variable rates of interest on our secured term loan facility. We use interest rate swaps to manage the cash flow interest rate risk. Such swaps have the economic effect of converting interest from variable rates to a fixed rate. Our revolving facility is also subject to variable rates of interest. Net cash generated from operating activities for the three months ended 30 September 2018 was £114.8 million, an increase of £96.9 million from net cash generated of £17.9 million for the three months ended 30 September 2017.

Net cash used in investing activities

Capital expenditure for the acquisition of intangible assets as well as for improvements to property, principally at Old Trafford and the Aon Training Complex, are funded through cash flow generated from operations, proceeds from the sale of intangible assets and, if necessary, from our revolving facility. Capital expenditure on the acquisition, disposal and trading of intangible assets tends to vary significantly from year to year depending on the requirements of our first team, overall availability of players, our assessment of their relative value and competitive demand for players from other clubs. By contrast, capital expenditure on the purchase of property, plant and equipment tends to remain relatively stable as we continue to make improvements at Old Trafford and invest in the expansion of our training facility, the Aon Training Complex.

Net cash used in investing activities for the three months ended 30 September 2018 was £108.6 million, an increase of £19.3 million from £89.3 million for the three months ended 30 September 2017.

For the three months ended 30 September 2018, net capital expenditure on property, plant and equipment was £4.9 million, an increase of £0.5 million from net expenditure of £4.4 million for the three months ended 30 September 2017.

For the three months ended 30 September 2018, net capital expenditure on intangible assets was £103.7 million, an increase of £18.8 million from net expenditure of £84.9 million for the three months ended 30 September 2017.

Net cash used in financing activities

Net cash used in financing activities for the three months ended 30 September 2018 was £3.8 million, an increase of £3.7 million compared to net cash used of £0.1 million for the three months ended 30 September 2017. The remaining balance of the secured bank loan amounting to £3.8 million was repaid on 9 July 2018.

Indebtedness

Our primary sources of indebtedness consist of our senior secured notes and secured term loan facility. As part of the security for our senior secured notes, our secured term loan facility and our revolving facility, substantially all of our assets are subject to liens and mortgages.

Description of principal indebtedness

Senior secured notes

Our wholly-owned subsidiary, Manchester United Football Club Limited, issued $425 million in aggregate principal amount of 3.79% senior secured notes due 2027. As of 30 September 2018 the sterling equivalent of £322.1 million (net of unamortized issue costs of £3.7 million) was outstanding. The outstanding principal amount was $425.0 million. The notes mature on 25 June 2027.

The senior secured notes are guaranteed by Red Football Limited, Red Football Junior Limited, Manchester United Limited and MU Finance Limited and secured against substantially all of the assets of those entities and Manchester United Football Club Limited. These entities are wholly owned subsidiaries.

The note purchase agreement governing the notes contains a financial maintenance covenant requiring us to maintain consolidated profit/loss for the period before depreciation, amortization of, and profit on disposal of, intangible assets, exceptional items, net finance costs, and tax (“EBITDA”) of not less than £65 million for each 12 month testing period. We are able to claim certain dispensations from complying with the consolidated EBITDA floor up to twice (in non-consecutive years) during the life of the notes if we fail to qualify for the first round group stages (or its equivalent from time to time) of the UEFA Champions League. The covenant is tested on a quarterly basis and we were in compliance for the quarter ended 30 September 2018.

The note purchase agreement governing the notes contains events of default typical for securities of this type, as well as customary covenants and restrictions on the activities of Red Football Limited and each of Red Football Limited’s subsidiaries, including, but not limited to, the incurrence of additional indebtedness; dividends or distributions in respect of capital stock or certain other restricted payments or investments; entering into agreements that restrict distributions from restricted subsidiaries; the sale or disposal of assets, including capital stock of restricted subsidiaries; transactions with affiliates; the incurrence of liens; and mergers, consolidations or the sale of substantially all of Red Football Limited’s assets. The covenants in the note purchase agreement governing the notes are subject to certain thresholds and exceptions described in the note purchase agreement governing the notes.

The notes may be redeemed in part, in an amount not less than 5% of the aggregate principal amount of the notes then outstanding, or in full, at any time at 100% of the principal amount plus a “make-whole” premium of an amount equal to the discounted value (based on the US Treasury rate) of the remaining interest payments due on the notes up to 25 June 2027.

Secured term loan facility

Our wholly-owned subsidiary, Manchester United Football Club Limited, has a secured term loan facility with Bank of America, N.A. As of 30 September 2018 the sterling equivalent of £170.4 million (net of unamortized issue costs of £2.1 million) was outstanding. The outstanding principal amount was $225.0 million. We have the option to repay the loan at any time. The remaining balance of the loan is repayable on 26 June 2025.

Loans under the secured term loan facility bear interest at a rate per annum equal to US dollar LIBOR (provided that if the rate is less than zero, LIBOR shall be deemed to be zero) plus the applicable margin. The applicable margin, if no event of default has occurred and is continuing, means the following:

Total net leverage ratio (as defined in the secured term loan facility agreement)		Margin % (per annum)
Greater than 3.5		1.75
Greater than 2.0 but less than or equal to 3.5		1.50
Less than or equal to 2.0		1.25

While any event of default is continuing, the applicable margin shall be the highest level set forth above.

Our secured term loan facility is guaranteed by Red Football Limited, Red Football Junior Limited, Manchester United Limited, MU Finance Limited and Manchester United Football Club Limited and secured against substantially all of the assets of those entities. These entities are wholly owned subsidiaries.

The secured term loan facility contains a financial maintenance covenant requiring us to maintain consolidated profit/loss for the period before depreciation, amortization of, and profit on disposal of, intangible assets, exceptional items, net finance costs, and tax (“EBITDA”) of not less than £65 million for each 12 month testing period. We are able to claim certain dispensations from complying with the consolidated EBITDA floor up to twice (in non-consecutive years) during the life of the secured term loan facility if we fail to qualify for the first round

group stages (or its equivalent from time to time) of the UEFA Champions League. The covenant is tested on a quarterly basis and we were in compliance for the quarter ended 30 September 2018.

Revolving facility

Our revolving facilities agreement allows MU Finance Limited or Manchester United Football Club Limited (or any direct or indirect subsidiary of Red Football Limited that becomes a borrower thereunder) to borrow up to £125 million, plus (subject to certain conditions) the ability to incur a further £25 million by way of incremental facilities, from a syndicate of lenders with Bank of America Merrill Lynch International Limited as agent and security trustee. As of 30 September 2018, we had no outstanding borrowings and had £125 million (exclusive of capacity under the incremental facilities) in borrowing capacity under our revolving facilities agreement.

Our revolving facility is scheduled to expire on 26 June 2021 (although it may be possible for any subsequent incremental facility thereunder to expire at a later date). Any amount still outstanding at that time will be due in full immediately on the applicable expiry date.

Our revolving facility is guaranteed by Red Football Limited, Red Football Junior Limited, Manchester United Limited, MU Finance Limited and Manchester United Football Club Limited and secured against substantially all of the assets of those entities. These entities are wholly owned subsidiaries.

RESEARCH AND DEVELOPMENT, PATENTS AND LICENSES, ETC.

We do not conduct research and development activities.

OFF BALANCE SHEET ARRANGEMENTS

Transfer fees payable

Under the terms of certain contracts with other football clubs in respect of player transfers, additional amounts would be payable by us if certain specific performance conditions are met. We estimate the fair value of any contingent consideration at the date of acquisition based on the probability of conditions being met and monitor this on an ongoing basis. The maximum additional amount that could be payable as of 30 September 2018 is £67.0 million.

Transfer fees receivable

Similarly, under the terms of contracts with other football clubs for player transfers, additional amounts would be payable to us if certain specific performance conditions are met. In accordance with the recognition criteria for contingent assets, such amounts are only disclosed by the Company when probable and recognized when virtually certain. As of 30 September 2018, we believe receipt of £3.1 million to be probable.

Other commitments

In the ordinary course of business, we enter into operating lease commitments and capital commitments. These transactions are recognized in the consolidated financial statements in accordance with International Financial Reporting Standards (“IFRS”), as issued by the International Accounting Standards Board (“IASB”), and are more fully disclosed therein.

As of 30 September 2018, we had not entered into any other off-balance sheet transactions.

TABULAR DISCLOSURE OF CONTRACTUAL OBLIGATIONS

Contractual Obligations

The following table summarizes our contractual obligations as of 30 September 2018:

	Less than 1 year	1-3 years	3-5 years	More than five years	Total contractual cash flows(1)	Total per consolidated financial statements
	£’000	£’000	£’000	£’000	£’000	£’000
Long-term debt obligations(2)	18,904	37,808	37,808	556,012	650,532	494,702
Operating lease obligations(3)	1,902	2,180	162	3,846	8,090	—
Purchase obligations(4)	167,934	41,677	5,948	49	215,608	206,436
Total	188,740	81,665	43,918	559,907	874,230	701,138

(1) Total contractual cash flows reflect contractual non-derivative financial obligations including interest, operating lease payments, purchase order commitments and capital commitments and therefore differ from the carrying amounts in our consolidated financial statements.

(2) As of 30 September 2018, we had $425.0 million of our senior secured notes outstanding and $225.0 million of our secured term loan facility outstanding.

(3) We enter into operating leases in the normal course of business. Most lease arrangements provide us with the option to renew the leases at defined terms. The future operating lease obligations would change if we were to exercise these options, or if we were to enter into additional new operating leases.

(4) Purchase obligations include current and non-current obligations related to the acquisition of registrations, purchase order commitments and capital commitments. Purchase obligations do not include contingent transfer fees of £67.0 million which are potentially payable by us if certain specific performance conditions are met.

Except as disclosed above and in note 27.3 to the unaudited interim consolidated financial statements as of and for the three months ended 30 September 2018 included elsewhere in this interim report, as of 30 September 2018, we did not have any material contingent liabilities or guarantees.

Manchester United plc

Interim consolidated income statement - unaudited

		Three months ended 30 September
	Note	2018 £’000		Restated(1) 2017 £’000
Revenue	6	135,026		143,665
Operating expenses	7	(143,580	)	(143,036	)
Profit on disposal of intangible assets	8	22,428		17,279
Operating profit		13,874		17,908
Finance costs		(5,815	)	(1,001	)
Finance income		689		218
Net finance costs	9	(5,126	)	(783	)
Profit before tax		8,748		17,125
Tax expense	10	(2,102	)	(7,555	)
Profit for the period		6,646		9,570

Earnings per share during the period:
Basic earnings per share (pence)	11	4.04		5.83
Diluted earnings per share (pence)	11	4.04		5.81

(1) Comparative amounts have been restated — see note 32 to the interim consolidated financial statements for further details.

See accompanying notes to the interim consolidated financial statements.

Manchester United plc

Interim consolidated statement of comprehensive income - unaudited

	Three months ended 30 September
	2018 £’000		Restated(1) 2017 £’000
Profit for the period	6,646		9,570
Other comprehensive income:
Items that may be subsequently reclassified to profit or loss
Cash flow hedges	(857	)	11,356
Tax expense relating to cash flow hedges	(650	)	(3,975	)
Other comprehensive (loss)/income for the period, net of tax	(1,507	)	7,381
Total comprehensive income for the period	5,139		16,951

(1) Comparative amounts have been restated - see note 32 to the interim consolidated financial statements for further details.

See accompanying notes to the interim consolidated financial statements.

Manchester United plc

Interim consolidated balance sheet - unaudited

	Note	30 September 2018 £’000	Restated(1) 30 June 2018 £’000	Restated(1) 30 September 2017 £’000	Restated(1) 30 June 2017 £’000
ASSETS
Non-current assets
Property, plant and equipment	13	247,542	245,401	246,831	244,738
Investment property	14	13,804	13,836	13,934	13,966
Intangible assets	15	767,435	799,640	805,694	717,544
Derivative financial instruments	17	5,576	4,807	479	1,666
Trade and other receivables	18	10,146	4,724	9,991	15,399
Tax receivable		547	547	—	—
Deferred tax asset	24	61,386	63,332	135,619	141,485
		1,106,436	1,132,287	1,212,548	1,134,798
Current assets
Inventories	16	2,666	1,416	2,074	1,637
Derivative financial instruments	17	518	1,159	2,433	3,218
Trade and other receivables	18	91,861	168,060	85,243	103,732
Tax receivable		800	800	—	—
Cash and cash equivalents	19	247,505	242,022	216,236	290,267
		343,350	413,457	305,986	398,854
Total assets		1,449,786	1,545,744	1,518,534	1,533,652

(1) Comparative amounts have been restated - see note 32 to the interim consolidated financial statements for further details.

See accompanying notes to the interim consolidated financial statements.

Manchester United plc

Interim consolidated balance sheet — unaudited (continued)

	Note	30 September 2018 £’000		Restated(1) 30 June 2018 £’000		Restated(1) 30 September 2017 £’000		Restated(1) 30 June 2017 £’000
EQUITY AND LIABILITIES
Equity
Share capital	20	53		53		53		53
Share premium		68,822		68,822		68,822		68,822
Merger reserve		249,030		249,030		249,030		249,030
Hedging reserve		(29,065	)	(27,558	)	(23,890	)	(31,271	)
Retained earnings		143,613		136,757		203,608		193,453
		432,453		427,104		497,623		480,087
Non-current liabilities
Derivative financial instruments	17	—		—		523		655
Trade and other payables	21	45,460		104,271		69,898		83,587
Borrowings	22	492,438		486,694		478,065		497,630
Deferred revenue	23	35,248		37,085		35,060		39,648
Deferred tax liabilities	24	29,673		29,134		27,058		21,536
		602,819		657,184		610,604		643,056
Current liabilities
Derivative financial instruments	17	—		—		—		1,253
Tax liabilities		2,675		3,874		8,675		9,772
Trade and other payables	21	185,028		267,996		202,534		190,315
Borrowings	22	2,264		9,074		6,236		5,724
Deferred revenue	23	224,547		180,512		192,862		203,445
		414,514		461,456		410,307		410,509
Total equity and liabilities		1,449,786		1,545,744		1,518,534		1,533,652

(1) Comparative amounts have been restated - see note 32 to the interim consolidated financial statements for further details.

See accompanying notes to the interim consolidated financial statements.

Manchester United plc

Interim consolidated statement of changes in equity - unaudited

	Share capital £’000	Share premium £’000	Merger reserve £’000	Hedging reserve £’000		Retained earnings £’000		Total equity £’000
Balance at 1 July 2017:
As previously reported	53	68,822	249,030	(31,724	)	191,436		477,617
Adjustment	—	—	—	453		2,017		2,470
Restated(1)	53	68,822	249,030	(31,271	)	193,453		480,087
Profit for the period	—	—	—	—		9,570		9,570
Cash flow hedges	—	—	—	11,356		—		11,356
Tax credit relating to cash flow hedges	—	—	—	(3,975	)	—		(3,975	)
Total comprehensive income for the period	—	—	—	7,381		9,570		16,951
Equity-settled share-based payments	—	—	—	—		585		585
Balance at 30 September 2017	53	68,822	249,030	(23,890	)	203,608		497,623
Loss for the period	—	—	—			(47,199	)	(47,199	)
Cash flow hedges	—	—	—	14,041		—		14,041
Tax charge relating to cash flow hedges	—	—	—	(17,709	)	—		(17,709	)
Total comprehensive loss for the period	—	—	—	(3,668	)	(47,199	)	(50,867	)
Equity-settled share-based payments	—	—	—	—		2,330		2,330
Dividends paid	—	—	—	—		(21,982	)	(21,982	)
Balance at 30 June 2018	53	68,822	249,030	(27,558	)	136,757		427,104
Profit for the period	—	—	—	—		6,646		6,646
Cash flow hedges	—	—	—	(857	)	—		(857	)
Tax credit relating to cash flow hedges	—	—	—	(650	)	—		(650	)
Total comprehensive income for the period	—	—	—	(1,507	)	6,646		5,139
Equity-settled share-based payments	—	—	—	—		210		210
Balance at 30 September 2018	53	68,822	249,030	(29,065	)	143,613		432,453

(1) Comparative amounts have been restated - see note 32 to the interim consolidated financial statements for further details.

See accompanying notes to the interim consolidated financial statements.

Manchester United plc

Interim consolidated statement of cash flows - unaudited

		Three months ended 30 September
	Note	2018 £’000		2017 £’000
Cash flows from operating activities
Cash generated from operations	25	123,356		26,951
Interest paid		(7,773	)	(8,018	)
Interest received		633		218
Tax paid		(1,434	)	(1,238	)
Net cash generated from operating activities		114,782		17,913
Cash flows from investing activities
Payments for property, plant and equipment		(4,904	)	(4,344	)
Payments for intangible assets(1)		(128,638	)	(117,121	)
Proceeds from sale of intangible assets		24,928		32,186
Net cash used in investing activities		(108,614	)	(89,279	)
Cash flows from financing activities
Repayment of borrowings		(3,750	)	(100	)
Net cash used in financing activities		(3,750	)	(100	)
Net increase/(decrease) in cash and cash equivalents		2,418		(71,466	)
Cash and cash equivalents at beginning of period		242,022		290,267
Effects of exchange rate changes on cash and cash equivalents		3,065		(2,565	)
Cash and cash equivalents at end of period	19	247,505		216,236

(1) Payments for intangible assets primarily relate to player and key football management staff registrations. When acquiring players’ and key football management staff registrations it is normal industry practice for payments terms to spread over more than one year. During the three months ended 30 September 2018 registrations additions totalled £3,020,000 (three months ended 30 September 2017: £126,446,000) — see note 15. Payables in relation to the acquisition of registrations at the balance sheet date are provided in note 21.

See accompanying notes to the interim consolidated financial statements.

Manchester United plc

Notes to the interim consolidated financial statements — unaudited (continued)

3 Accounting policies

The accounting policies adopted are consistent with those of the consolidated financial statements for the year ended 30 June 2018, with the exception of the implementation of IFRS 9 ‘Financial instruments’ and IFRS 15 ‘Revenue from contracts with customers’ and except as described below.

Taxes on income in the interim periods are accrued using the tax rate that would be applicable to expected total annual earnings.

New and amended standards and interpretations adopted by the Group

The Group adopted IFRS 9 ‘Financial instruments’ and IFRS 15 ‘Revenue from contracts with customers’ with effect from 1 July 2018. Information on the implementation of new accounting standards is included in the Company’s Annual Report on Form 20-F for the year ended 30 June 2018 — note 2 “Summary of significant accounting policies — Changes in accounting policy and disclosures”.

The implementation of IFRS 9 did not have a material impact on the Group’s financial statements as at 1 July 2018.

The implementation of IFRS 15 did have a material impact on the Group’s financial statements as at 1 July 2018 and consequently prior year amounts have been restated. Further details can be found in note 32 to the interim consolidated financial statements.

New and amended standards and interpretations issued but not yet adopted

The following new standards, amendments to standards and interpretations are not yet effective and have not been applied in preparing these interim consolidated financial statements. Adoption may affect the recognition, measurement and disclosures in the Group’s financial statements in the future. The adoption of these standards, amendments and interpretations is not expected to have a material impact on the consolidated financial statements of the Group, except as set out below.

· IFRS 16, “Leases” addresses the definition of a lease, recognition and measurement of leases and establishes principles for reporting useful information to users of financial statements about the leasing activities of both lessees and lessors. A key change arising from IFRS 16 is that most operating leases will be accounted for on balance sheet for lessees. As at the reporting date, the Group has non-cancellable operating lease commitments, however, the Group has not yet determined to what extent these commitments will result in the recognition of an asset and a liability for future payments and how this will affect the Group’s profit and classification of cash flows. The Group expects to adopt IFRS 16 from 1 July 2019.

There are no other IFRSs or IFRS IC interpretations that are not yet effective that would be expected to have a material impact on the Group.

Manchester United plc

Notes to the interim consolidated financial statements — unaudited (continued)

5 Seasonality of revenue

We experience seasonality in our revenue and cash flow, limiting the overall comparability of interim financial periods. In any given interim period, our total revenue can vary based on the number of games played in that period, which affects the amount of Matchday and Broadcasting revenue recognized. Similarly, certain of our costs are derived from hosting games at Old Trafford, and these costs will also vary based on the number of games played in the period. We historically recognize the most revenue in our second and third fiscal quarters due to the scheduling of matches. However, a strong performance by our first team in European competitions and domestic cups could result in significant additional Matchday and Broadcasting revenue, and consequently we may also recognize the most revenue in our fourth fiscal quarter in those years.

Commercial revenue comprises revenue receivable from the exploitation of the Manchester United brand through sponsorship and other commercial agreements, including minimum guaranteed revenue, and fees for the Manchester United first team undertaking tours. For sponsorship contracts any additional revenue receivable over and above the minimum guaranteed revenue contained in the sponsorship and licensing agreements is taken to revenue when a reliable estimate of the future performance of the contract can be obtained and it is probable that the amounts will not be recouped by the sponsor in future years. Revenue is recognized over the term of the sponsorship agreement in line with the performance obligations included within the contract and based on the sponsorship rights enjoyed by the individual sponsor. In instances where the sponsorship rights remain the same over the duration of the contract, revenue is recognized on a straight-line basis. In respect of contracts with multiple elements, the Group allocates the total consideration receivable to each separately identifiable element based on their relative fair values, and then recognizes the allocated revenue on a straight-line basis over the relevant period of each element. Minimum guaranteed revenue under the agreement with adidas is subject to certain adjustments. Management’s current best estimate is that the full minimum guarantee amount will be received, as management do not expect two consecutive seasons of non-participation in the Champions League. Retail revenue is recognized at the point of sale while license revenue is recognized in the period in which the goods and services are provided.

Broadcasting rights revenue represents revenue receivable from all UK and overseas media contracts, including contracts negotiated centrally by the Premier League and UEFA. In addition, broadcasting rights revenue includes revenue receivable from the exploitation of Manchester United media rights through the internet or wireless applications. Distributions from the Premier League comprise a fixed element (which is recognized evenly as domestic Premier League matches are played), facility fees for live coverage and highlights of domestic home and away matches (which are recognized when the respective match is played), and merit awards (which are recognized when domestic Premier League matches are played based on management’s estimate of where the first team will finish at the end of the football season). Distributions from UEFA relating to participation in European competitions comprise market pool payments (which are recognized over the matches played in the competition, a portion of which reflects Manchester United’s performance relative to the other Premier League clubs in the competition) and fixed amounts for participation in individual matches (which are recognized when the matches are played).

Matchday revenue is recognized based on matches played throughout the year with revenue from each match being recognized only after the match to which the revenue relates has been played. Revenue from related activities such as Conference and Events or the Museum is recognized as the event or service is provided or the facility is enjoyed. Matchday revenue includes revenue receivable from all domestic and European match day activities from Manchester United games at Old Trafford, together with the Group’s share of gate receipts from cup matches not played at Old Trafford (where applicable), and fees for arranging other events at the Old Trafford stadium. The share of gate receipts payable to the other participating club and competition organiser for cup matches played at Old Trafford (where applicable) is treated as an operating expense.

Manchester United plc

Notes to the interim consolidated financial statements — unaudited (continued)

6 Segment information

The principal activity of the Group is the operation of men’s and women’s professional football clubs. All of the activities of the Group support the operation of the football clubs and the success of the men’s first team in particular is critical to the on-going development of the Group. Consequently the Chief Operating Decision Maker (being the Board and executive officers of Manchester United plc) regards the Group as operating in one material segment, being the operation of professional football clubs.

All revenue derives from the Group’s principal activity in the United Kingdom. Revenue can be analysed into its three main components as follows:

	Three months ended 30 September
	2018 £’000	Restated(1) 2017 £’000
Commercial	75,900	80,478
Broadcasting	42,842	40,833
Matchday	16,284	22,354
	135,026	143,665

(1) Comparative amounts have been restated - see note 32 to the interim consolidated financial statements for further details.

All non-current assets, other than US deferred tax assets, are held within the United Kingdom.

7 Operating expenses

	Three months ended 30 September
	2018 £’000		2017 £’000
Employee benefit expenses	(77,043	)	(69,885	)
Depreciation - property, plant and equipment (note 13)	(2,777	)	(2,542	)
Depreciation - investment property (note 14)	(32	)	(32	)
Amortization (note 15)	(35,131	)	(36,054	)
Other operating expenses	(28,597	)	(34,523	)
	(143,580	)	(143,036	)

8 Profit on disposal of intangible assets

	Three months ended 30 September
	2018 £’000	2017 £’000
Profit on disposal of registrations	22,349	17,008
Player loan fee income	79	271
	22,428	17,279

Manchester United plc

Notes to the interim consolidated financial statements — unaudited (continued)

9 Net finance costs

	Three months ended 30 September
	2018 £’000		2017 £’000
Interest payable on bank loans and overdrafts	(264	)	(404	)
Interest payable on secured term loan facility and senior secured notes	(4,531	)	(4,578	)
Amortization of issue costs on secured term loan facility and senior secured notes	(156	)	(151	)
Foreign exchange (losses)/gains on retranslation of unhedged US dollar borrowings	(219	)	5,496
Unwinding of discount relating to registrations	(726	)	(810	)
Fair value movement on derivative financial instruments:
Embedded foreign exchange derivatives	81		(554	)
Total finance costs	(5,815	)	(1,001	)
Total finance income - interest receivable on short-term bank deposits	689		218
Net finance costs	(5,126	)	(783	)

Manchester United plc

Notes to the interim consolidated financial statements — unaudited (continued)

10 Tax expense

	Three months ended 30 September
	2018 £’000		Restated(1) 2017 £’000
Current tax
Current tax on result for the period	(650	)	—
Foreign tax	(111	)	(142	)
Total current tax expense	(761	)	(142	)
Deferred tax
Origination and reversal of temporary differences	(1,341	)	(7,413	)
Total deferred tax expense	(1,341	)	(7,413	)
Total tax expense	(2,102	)	(7,555	)

(1) Comparative amounts have been restated - see note 32 to the interim consolidated financial statements for further details.

Tax is recognised based on management’s estimate of the weighted average annual tax rate expected for the full financial year. Based on current forecasts, the estimated weighted average annual tax rate used for the year to 30 June 2019 is 28.01% (30 June 2018: 40.72%).

In addition to the amount recognized in the income statement, the following amounts relating to tax have been recognized directly in other comprehensive income:

	Three months ended 30 September
	2018 £’000		Restated(1) 2017 £’000
Current tax	494		—
Deferred tax (note 24)	(1,144	)	(3,975	)
Total tax credit/(expense) recognized in other comprehensive income	(650	)	(3,975	)

(1) Comparative amounts have been restated - see note 32 to the interim consolidated financial statements for further details.

Manchester United plc

Notes to the interim consolidated financial statements — unaudited (continued)

11 Earnings per share

(a) Basic

Basic earnings per share is calculated by dividing the profit for the period by the weighted average number of ordinary shares in issue during the period.

	Three months ended 30 September
	2018	Restated(1) 2017
Profit for the period (£’000)	6,646	9,570
Class A ordinary shares (thousands)	40,526	40,195
Class B ordinary shares (thousands)	124,000	124,000
Basic earnings per share (pence)	4.04	5.83

(1) Comparative amounts have been restated - see note 32 to the interim consolidated financial statements for further details.

(b) Diluted

Diluted earnings per share is calculated by adjusting the weighted average number of ordinary shares in issue during the year to assume conversion of all dilutive potential ordinary shares. The Company has 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.

	Three months ended 30 September
	2018	Restated(1) 2017
Profit for the period (£’000)	6,646	9,570
Class A ordinary shares (thousands)	40,526	40,195
Adjustment for assumed conversion into Class A ordinary shares (thousands)	172	390
Class B ordinary shares (thousands)	124,000	124,000
Diluted earnings per share (pence)	4.04	5.81

(1) Comparative amounts have been restated - see note 32 to the interim consolidated financial statements for further details.

12 Dividends

No dividend has been paid by the Company during the three month period ended 30 September 2018 (three months ended 30 September 2017: £nil). A regular semi-annual cash dividend on the Company’s outstanding Class A and Class B ordinary shares of $0.09 per share is expected to be paid in January and June 2019.

Manchester United plc

Notes to the interim consolidated financial statements — unaudited (continued)

13 Property, plant and equipment

	Freehold property £’000		Plant and machinery £’000		Fixtures and fittings £’000		Total £’000
At 1 July 2018
Cost	269,367		34,790		57,800		361,957
Accumulated depreciation	(50,032	)	(30,621	)	(35,903	)	(116,556	)
Net book amount	219,335		4,169		21,897		245,401
Three months ended 30 September 2018
Opening net book amount	219,335		4,169		21,897		245,401
Additions	23		1,240		3,655		4,918
Depreciation charge	(819	)	(490	)	(1,468	)	(2,777	)
Closing net book amount	218,539		4,919		24,084		247,542
At 30 September 2018
Cost	269,390		36,030		61,455		366,875
Accumulated depreciation	(50,851	)	(31,111	)	(37,371	)	(119,333	)
Net book amount	218,539		4,919		24,084		247,542

At 1 July 2017
Cost	269,372		34,475		50,236		354,083
Accumulated depreciation	(46,744	)	(31,090	)	(31,511	)	(109,345	)
Net book amount	222,628		3,385		18,725		244,738
Three months ended 30 September 2017
Opening net book amount	222,628		3,385		18,725		244,738
Additions	—		885		3,750		4,635
Depreciation charge	(822	)	(513	)	(1,207	)	(2,542	)
Closing net book amount	221,806		3,757		21,268		246,831
At 30 September 2017
Cost	269,372		35,360		53,986		358,718
Accumulated depreciation	(47,566	)	(31,603	)	(32,718	)	(111,887	)
Net book amount	221,806		3,757		21,268		246,831

Manchester United plc

Notes to the interim consolidated financial statements — unaudited (continued)

14 Investment property

	Total £’000
At 1 July 2018
Cost	19,769
Accumulated depreciation and impairment	(5,933	)
Net book amount	13,836
Three months ended 30 September 2018
Opening net book amount	13,836
Depreciation charge	(32	)
Closing net book amount	13,804
At 30 September 2018
Cost	19,769
Accumulated depreciation and impairment	(5,965	)
Net book amount	13,804

At 1 July 2017
Cost	19,769
Accumulated depreciation and impairment	(5,803	)
Net book amount	13,966
Three months ended 30 September 2017
Opening net book amount	13,966
Depreciation charge	(32	)
Closing net book amount	13,934
At 30 September 2017
Cost	19,769
Accumulated depreciation and impairment	(5,835	)
Net book amount	13,934

Management obtained an external valuation report carried out in accordance with the Royal Institution of Chartered Surveyors (“RICS”) Valuation - Professional Standards, January 2014 as of 30 June 2018 which supported the carrying value of investment property as of that date and consequently there were no changes to the net book amount. Management has considered the carrying amount of investment property as of 30 September 2018 and concluded that, as there are no indicators of impairment, an impairment test is not required. The external valuation was carried out on the basis of Market Value, as defined in the RICS Valuation — Professional Standards, January 2014. Fair value of investment property is determined using inputs that are not based on observable market data, consequently the asset is categorized as Level 3 (see note 29.3).

Manchester United plc

Notes to the interim consolidated financial statements — unaudited (continued)

15 Intangible assets

	Goodwill £’000	Registrations £’000		Other intangible assets £’000		Total £’000
At 1 July 2018
Cost	421,453	785,594		10,379		1,217,426
Accumulated amortization	—	(416,086	)	(1,700	)	(417,786	)
Net book amount	421,453	369,508		8,679		799,640
Three months ended 30 September 2018
Opening net book amount	421,453	369,508		8,679		799,640
Additions	—	3,020		1,203		4,223
Disposals	—	(1,297	)	—		(1,297	)
Amortization charge	—	(34,331	)	(800	)	(35,131	)
Closing book amount	421,453	336,900		9,082		767,435
At 30 September 2018
Cost	421,453	773,346		11,582		1,206,381
Accumulated amortization	—	(436,446	)	(2,500	)	(438,946	)
Net book amount	421,453	336,900		9,082		767,435

At 1 July 2017
Cost	421,453	645,433		6,619		1,073,505
Accumulated amortization	—	(354,913	)	(1,048	)	(355,961	)
Net book amount	421,453	290,520		5,571		717,544
Three months ended 30 September 2017
Opening net book amount	421,453	290,520		5,571		717,544
Additions	—	126,446		602		127,048
Disposals	—	(2,844	)	—		(2,844	)
Amortization charge	—	(35,703	)	(351	)	(36,054	)
Closing book amount	421,453	378,419		5,822		805,694
At 30 September 2017
Cost	421,453	730,460		7,222		1,159,135
Accumulated amortization	—	(352,041	)	(1,400	)	(353,441	)
Net book amount	421,453	378,419		5,822		805,694

Manchester United plc

Notes to the interim consolidated financial statements — unaudited (continued)

17 Derivative financial instruments

	30 September 2018		30 June 2018		30 September 2017
	Assets	Liabilities	Assets	Liabilities	Assets	Liabilities
	£’000	£’000	£’000	£’000	£’000	£’000
Derivatives used for hedging:
Interest rate swaps	5,388	—	4,490	—	—	(523	)
Derivatives at fair value through profit or loss:
Embedded foreign exchange derivatives	706	—	624	—	1,160	—
Forward foreign exchange contracts	—	—	852	—	1,752	—
	6,094	—	5,966	—	2,912	(523	)
Less non-current portion:
Derivatives used for hedging:
Interest rate swaps	5,388	—	4,490	—	—	(523	)
Derivatives at fair value through profit or loss:
Embedded foreign exchange derivatives	188	—	317	—	479	—
Non-current derivative financial instruments	5,576	—	4,807	—	479	(523	)
Current derivative financial instruments	518	—	1,159	—	2,433	—

Further details of derivative financial instruments are provided in note 29.

Manchester United plc

Notes to the interim consolidated financial statements — unaudited (continued)

18 Trade and other receivables

	30 September 2018 £’000		30 June 2018 £’000		Restated(1) 30 September 2017 £’000
Trade receivables	57,597		133,505		65,200
Less: provision for impairment of trade receivables	(14,258	)	(9,708	)	(14,736	)
Net trade receivables	43,339		123,797		50,464
Other receivables	159		107		3,730
Accrued income	45,853		38,018		25,967
	89,351		161,922		80,161
Prepayments	12,656		10,862		15,073
	102,007		172,784		95,234
Less: non-current portion
Trade receivables	10,146		4,724		9,991
Non-current trade and other receivables	10,146		4,724		9,991
Current trade and other receivables	91,861		168,060		85,243

(1) Comparative amounts have been restated - see note 32 to the interim consolidated financial statements for further details.

Net trade receivables include transfer fees receivable from other football clubs of £26,998,000 (30 June 2018: £29 ,214,000; 30 September 2017: £34,096,000) of which £10,146,000 (30 June 2018: £4,724,000; 30 September 2017: £9,991,000) is receivable after more than one year. Net trade receivables also include £10,420,000 (30 June 2018: £77,357,000; 30 September 2017: £5,077,000) of deferred revenue that is contractually payable to the Group, but recorded in advance of the earnings process, with corresponding amounts recorded as deferred revenue liabilities.

The fair value of net trade receivables as at 30 September 2018 was £44,519,000 (30 June 2018: £124,050,000; 30 September 2017: £51,377,000) before discounting of cash flows. The fair value of other receivables is not materially different to their carrying value.

19 Cash and cash equivalents

		30 September 2018 £’000		30 June 2018 £’000		30 September 2017 £’000
Cash at bank and in hand		247,505		242,022		216,236

Cash and cash equivalents for the purposes of the consolidated statement of cash flows are as above.

Manchester United plc

Notes to the interim consolidated financial statements — unaudited (continued)

20 Share capital

	Number of shares (thousands)	Ordinary shares £’000
At 1 July 2017	164,195	53
Employee share-based compensation awards — issue of shares	—	—
At 30 September 2017	164,195	53
Employee share-based compensation awards — issue of shares	331	—
At 30 June 2018	164,526	53
Employee share-based compensation awards — issue of shares	—	—
At 30 September 2018	164,526	53

The Company has two classes of ordinary shares outstanding: Class A ordinary shares and Class B ordinary shares. The rights of the holders of Class A ordinary shares and Class B ordinary shares are identical, except with respect to voting and conversion. Each Class A ordinary share is entitled to one vote per share and is not convertible into any other shares. Each Class B ordinary share is entitled to 10 votes per share and is convertible into one Class A ordinary share at any time. In addition, Class B ordinary shares will automatically convert into Class A ordinary shares upon certain transfers and other events, including upon the date when holders of all Class B ordinary shares cease to hold Class B ordinary shares representing, in the aggregate, at least 10% of the total number of Class A and Class B ordinary shares outstanding. For special resolutions (which are required for certain important matters including mergers and changes to the Company’s governing documents), which require the vote of two-thirds of the votes cast, at any time that Class B ordinary shares remain outstanding, the voting power permitted to be exercised by the holders of the Class B ordinary shares will be weighted such that the Class B ordinary shares shall represent, in the aggregate, 67% of the voting power of all shareholders.

As of 30 September 2018, the Company’s issued share capital comprised 40,526,390 Class A ordinary shares and 124,000,000 Class B ordinary shares.

Manchester United plc

Notes to the interim consolidated financial statements — unaudited (continued)

21 Trade and other payables

	30 September 2018 £’000	30 June 2018 £’000	30 September 2017 £’000
Trade payables	141,068	266,316	198,758
Other payables	4,967	4,754	2,173
Accrued expenses	60,401	83,280	55,483
	206,436	354,350	256,414
Social security and other taxes	24,052	17,917	16,018
	230,488	372,267	272,432
Less: non-current portion:
Trade payables	43,367	102,067	69,284
Other payables	2,093	2,204	614
Non-current trade and other payables	45,460	104,271	69,898
Current trade and other payables	185,028	267,996	202,534

Trade payables include transfer fees and other associated costs in relation to the acquisition of players’ registrations of £129,814,000 (30 June 2018: £258 ,316,000; 30 September 2017: £192,804,000) of which £43,367,000 (30 June 2018: £102,067,000; 30 September 2017: £69,284,000) is due after more than one year. Of the amount due after more than one year, £31,572,000 (30 June 2018: £65,495,000; 30 September 2017: £37,622,000) is expected to be paid between 1 and 2 years, and the balance of £11,795,000 (30 June 2018: £36,572,000; 30 September 2017: £31,662,000) is expected to be paid between 2 and 5 years.

The fair value of trade payables as at 30 September 2017 was £144,552,000 (30 June 2018: £270,548,000; 30 September 2017: £204,392,000) before discounting of cash flows. The fair value of other payables is not materially different to their carrying amount.

Manchester United plc

Notes to the interim consolidated financial statements — unaudited (continued)

22 Borrowings

	30 September 2018 £’000	30 June 2018 £’000	30 September 2017 £’000
Senior secured notes	322,084	318,347	312,754
Secured term loan facility	170,354	168,347	165,311
Secured bank loan	—	3,750	4,068
Accrued interest on senior secured notes	2,264	5,324	2,168
	494,702	495,768	484,301
Less: non-current portion:
Senior secured notes	322,084	318,347	312,754
Secured term loan facility	170,354	168,347	165,311
Non-current borrowings	492,438	486,694	478,065
Current borrowings	2,264	9,074	6,236

The senior secured notes of £322,084,000 (30 June 2018: £318,347,000; 30 September 2017: £312,754,000) is stated net of unamortized issue costs amounting to £3,686,000 (30 June 2018: £3,770,000; 30 September 2017: £4,032,000). The outstanding principal amount of the notes is $425,000,000 (30 June 2018: $425,000,000; 30 September 2017: $425,000,000). The notes have a fixed coupon rate of 3.79% per annum and interest is paid semi-annually. The notes mature on 25 June 2027.

The notes were issued by our wholly-owned subsidiary, Manchester United Football Club Limited, and are guaranteed by Red Football Limited, Red Football Junior Limited, Manchester United Limited and MU Finance Limited and are secured against substantially all of the assets of those entities and Manchester United Football Club Limited. These entities are wholly owned subsidiaries of Manchester United plc.

The secured term loan facility of £170,354,000 (30 June 2018: £ 168,347,000; 30 September 2017: £165,311,000) is stated net of unamortized issue costs amounting to £2,113,000 (30 June 2018: £2,185,000; 30 September 2017: £2,399,000). The outstanding principal amount of the loan is $225,000,000 (30 June 2018: $225,000,000; 30 September 2017: $225,000,000). The loan attracts interest of US dollar LIBOR plus an applicable margin of between 1.25% and 1.75% per annum and interest is paid monthly. The remaining balance of the loan is repayable on 26 June 2025, although the Group has the option to repay the secured term loan facility at any time.

The secured term loan facility was provided to our wholly-owned subsidiary, Manchester United Football Club Limited, and is guaranteed by Red Football Limited, Red Football Junior Limited, Manchester United Limited, MU Finance Limited and Manchester United Football Club Limited and is secured against substantially all of the assets of each of those entities. These entities are wholly owned subsidiaries of Manchester United plc.

The secured bank loan of £nil (30 June 2018: £3,750,000; 30 September 2017: £4,068,000) was repaid at par on 9 July 2018. The loan attracted interest of LIBOR + 1% per annum.

Manchester United plc

Notes to the interim consolidated financial statements — unaudited (continued)

22 Borrowings (continued)

The Group also has undrawn committed borrowing facilities of £125,000,000 (30 June 2018: £125,000,000; 30 September 2017: £125,000,000). The Group also has (subject to certain conditions) the ability to incur a further £25,000,000 by way of incremental facilities. The new facility terminates on 26 June 2021 (although it may be possible for any incremental facilities to terminate after such date). Drawdowns would attract interest of LIBOR or EURIBOR plus an applicable margin of between 1.25% and 1.75% per annum (depending on the total net leverage ratio at that time). No drawdowns were made from these facilities during 2018 or 2017.

As of 30 September 2018, the Group was in compliance with all covenants under the note purchase agreement governing the senior secured notes, the secured term loan facility and the revolving facility.

23 Deferred revenue

	30 September 2018 £’000		Restated(1) 30 June 2018 £’000		Restated(1) 30 September 2017 £’000
Total	259,795		217,597		227,922
Less non-current deferred revenue	(35,248	)	(37,085	)	(35,060	)
Current deferred revenue	224,547		180,512		192,862

(1) Comparative amounts have been restated - see note 32 to the interim consolidated financial statements for further details.

Revenue from commercial, broadcasting and matchday activities received in advance of the period to which it relates is treated as deferred revenue. The deferred revenue is then released to revenue in accordance with the substance of the relevant agreements or, where applicable, as matches are played. The Group receives substantial amounts of deferred revenue prior to the previous financial year end which is then released to revenue throughout the current and, where applicable, future financial years.

Manchester United plc

Notes to the interim consolidated financial statements — unaudited (continued)

24 Deferred tax

Deferred tax assets and liabilities are offset where the Group has a legally enforceable right to do so. The following is the analysis of the deferred tax balances (after allowable offset) for financial reporting purposes:

	30 September 2018 £’000		Restated(1) 30 June 2018 £’000		Restated(1) 30 September 2017 £’000
US deferred tax assets	(61,386	)	(63,332	)	(135,619	)
UK deferred tax liabilities	29,673		29,134		27,058
Net deferred tax asset	(31,713	)	(34,198	)	(108,561	)

The movements in the net deferred tax asset are as follows:

	30 September 2018 £’000		Restated(1) 30 June 2018 £’000		Restated(1) 30 September 2017 £’000
At the beginning of the period	(34,198	)	(119,949	)	(119,949	)
Expensed to income statement (note 10)	1,341		63,519		7,413
Expensed to other comprehensive income (note 10)	1,144		21,685		3,975
Reclassification to tax receivable	—		547		—
At the end of the period	(31,713	)	(34,198	)	(108,561	)

(1) Comparative amounts have been restated - see note 32 to the interim consolidated financial statements for further details.

Manchester United plc

Notes to the interim consolidated financial statements — unaudited (continued)

25 Cash generated from operations

	Three months to 30 September 2018 £’000		Restated(1) Three months to 30 September 2017 £’000
Profit before tax	8,748		17,125
Depreciation	2,809		2,574
Amortization	35,131		36,054
Profit on disposal of intangible assets	(22,428	)	(17,279	)
Net finance costs	5,126		783
Equity-settled share-based payments	210		585
Foreign exchange losses on operating activities	277		991
Reclassified from hedging reserve	1,308		3,881
Changes in working capital:
Inventories	(1,250	)	(437	)
Trade and other receivables	69,596		21,501
Trade and other payables and deferred revenue	23,829		(38,827	)
Cash generated from operations	123,356		26,951

(1) Comparative amounts have been restated - see note 32 to the interim consolidated financial statements for further details.

26 Contingencies

At 30 September 2018, the Group had no material contingent liabilities in respect of legal claims arising in the ordinary course of business. Contingent transfer fees are disclosed in note 27.3.

Manchester United plc

Notes to the interim consolidated financial statements — unaudited (continued)

27 Commitments

27.1 Operating lease arrangements

The Group leases various premises and plant and equipment under non-cancellable operating lease agreements. The Group leases out its investment properties.

27.2 Capital commitments

At 30 September 2018 the Group had capital commitments relating to property, plant and equipment amounting to £3.1 million (30 June 2018: £4.1 million; 30 September 2017: £5.0 million) and to other intangible assets amounting to £nil (30 June 2018: £nil; 30 September 2017: £nil).

27.3 Transfer fees payable

Under the terms of certain contracts with other football clubs in respect of player transfers, additional amounts, in excess of the amounts included in the cost of players’ registrations, would be payable by the Group if certain substantive performance conditions are met. These excess amounts are only recognised within the cost of players’ registrations when the Company considers that it is probable that the condition related to the payment will be achieved. For MUFC appearances, the Company estimates the probability of the player achieving the contracted number of appearances. The conditions relating to the signing of a new contract and international appearances are only considered to be probable once they have been achieved. The maximum additional amounts that could be payable is £66,998,000 (30 June 2018: £66 ,411,000; 30 September 2017: £61,748,000).

At 30 September 2018 the potential amount payable by type of condition and category of player was:

Type of condition	First team squad £’000	Other £’000	Total £’000
MUFC appearances/team success/new contract	29,217	8,677	37,894
International appearances	10,909	47	10,956
Other	17,817	331	18.148
	57,943	9,055	66,998

Similarly, under the terms of contracts with other football clubs for player transfers, additional amounts would be payable to the Group if certain specific performance conditions are met. In accordance with the recognition criteria for contingent assets, such amounts are only disclosed by the Group when probable and recognized when virtually certain. As of 30 September 2018, the amount of such receipt considered to be probable was £3,077,000 (30 June 2018: £ 2,392,000; 30 September 2017: £2,380,000).

Manchester United plc

Notes to the interim consolidated financial statements — unaudited (continued)

29 Financial risk management

29.1 Financial risk factors

The Group’s activities expose it to a variety of financial risks: market risk (including currency risk, interest rate risk and cash flow risk), credit risk, and liquidity risk.

The interim consolidated financial statements do not include all financial risk management information and disclosures required in the annual financial statements, and should be read in conjunction with the audited consolidated financial statements and notes thereto for the year ended 30 June 2018, as filed with the Securities and Exchange Commission on 28 September 2018, in the Company’s Annual Report on Form 20-F.

There have been no changes in risk management since the previous financial year end or in any risk management policies.

29.2 Hedging activities

The Group uses derivative financial instruments to hedge certain exposures, and has designated certain derivatives as hedges of cash flows (cash flow hedge).

The Group hedges the foreign exchange risk on contracted future US dollar revenues whenever possible using the Group’s US dollar net borrowings as the hedging instrument. The foreign exchange gains or losses arising on re-translation of the Group’s US dollar net borrowings used in the hedge are initially recognized in other comprehensive income, rather than being recognized in the income statement immediately. Amounts previously recognized in other comprehensive income and accumulated in the hedging reserve are subsequently reclassified into the income statement in the same accounting period, and within the same income statement line (i.e. Commercial revenue), as the underlying future US dollar revenues, which given the varying lengths of the commercial revenue contracts will be between October 2018 to June 2024. The foreign exchange gains or losses arising on re-translation of the Group’s unhedged US dollar borrowings are recognized in the income statement immediately, within net finance costs. The table below details the net borrowings being hedged at the balance sheet date:

	30 September 2018 $’000		30 June 2018 $’000		30 September 2017 $’000
USD borrowings	650,000		650,000		650,000
Hedged USD cash	(228,000	)	(128,500	)	(116,200	)
Net USD debt	422,000		521,500		533,800
Hedged future USD revenues	(330,530	)	(307,019	)	(300,201	)
Unhedged USD borrowings	91,470		214,481		233,599
Closing exchange rate	1.3046		1.3194		1.3416

Manchester United plc

Notes to the interim consolidated financial statements — unaudited (continued)

29 Financial risk management (continued)

29.2 Hedging activities (continued)

The Group hedges its cash flow interest rate risk where considered appropriate using interest rate swaps. Such interest rate swaps have the economic effect of converting borrowings from floating rates to fixed rates. The following table details the interest rate swaps at the balance sheet date that are used to hedge borrowings:

	30 September 2018	30 June 2018	30 September 2017
Principal value of loan outstanding ($’000)	150,000	150,000	225,000
Rate received	1 month $ LIBOR	1 month $ LIBOR	1 month $ LIBOR
Rate paid	Fixed 2.032%	Fixed 2.032%	Fixed 2.032%
Expiry date	30 June 2024	30 June 2024	30 June 2024

As of 30 September 2018 the fair value of the above interest rate swap was an asset of £5,388,000 (30 June 2018: asset of £4,490 ,000; 30 September 2017: liability of £523,000).

The Group seeks to hedge the majority of the currency risk on revenue arising as a result of participation in UEFA competitions, either by using contracted future foreign currency expenses or by placing forward foreign exchange contracts, at the point at which it becomes reasonably certain that it will receive the revenue.

29.3 Fair value estimation

The following table presents the financial instruments carried at fair value. The different levels used in measuring fair value have been defined as follows:

· Level 1 - quoted prices (unadjusted) in active markets for identical assets or liabilities;

· Level 2 - inputs other than quoted prices included within Level 1 that are observable for the asset or liability, either directly (i.e. as prices) or indirectly (i.e. derived from prices);

· Level 3 - inputs for the asset or liability that are not based on observable market data (unobservable inputs).

	30 September 2018 £’000	30 June 2018 £’000	30 September 2017 £’000
Assets
Derivatives used for hedging (note 17):
Interest rate swaps	5,388	4,490	—
Derivatives at fair value through profit or loss (note 17):
Embedded foreign exchange derivatives	706	624	1,160
Forward foreign exchange contracts	—	852	1,752
Liabilities
Derivatives used for hedging (note 17):
Interest rate swaps	—	—	(523	)
	6,094	5,966	2,389

The fair value of financial instruments that are not traded in an active market is determined by using valuation techniques. These valuation techniques maximise the use of observable market data where it is available and rely as little as possible on entity specific estimates. If all significant inputs required to fair value an instrument are observable, the instrument is categorised as Level 2. All of the financial instruments detailed above are categorised as Level 2.

Manchester United plc

Notes to the interim consolidated financial statements — unaudited (continued)

30 Related party transactions

Trusts and other entities controlled by six lineal descendants of Mr. Malcolm Glazer collectively own 7.45% of our issued and outstanding Class A ordinary shares and all of our issued and outstanding Class B ordinary shares, representing 97.07% of the voting power of our outstanding capital stock.

31 Subsidiaries

The following companies are the subsidiary undertakings of the Company as of 30 September 2018:

Subsidiaries	Principal activity	% of ownership interest
Red Football Finance Limited*	Finance company	100
Red Football Holdings Limited*	Holding company	100
Red Football Shareholder Limited	Holding company	100
Red Football Joint Venture Limited	Holding company	100
Red Football Limited	Holding company	100
Red Football Junior Limited	Holding company	100
Manchester United Limited	Holding company	100
Alderley Urban Investments Limited	Property investment	100
Manchester United Commercial Enterprises (Ireland) Limited	Dormant company	100
Manchester United Football Club Limited	Professional football club	100
Manchester United Women’s Football Club Limited	Professional football club	100
Manchester United Interactive Limited	Dormant company	100
MU 099 Limited	Dormant company	100
MU Commercial Holdings Limited	Holding company	100
MU Commercial Holdings Junior Limited	Holding company	100
MU Finance Limited	Dormant company	100
MU RAML Limited	Retail and licensing company	100
MUTV Limited	Media company	100
RAML USA LLC	Retail company	100

* Direct investment of Manchester United plc, others are held by subsidiary undertakings.

All of the above are incorporated and operate in England and Wales, with the exception of Red Football Finance Limited which is incorporated and operates in the Cayman Islands, Manchester United Commercial Enterprises (Ireland) Limited which is incorporated in Ireland, and RAML USA LLC which is incorporated in the United States.

Manchester United plc

Notes to the interim consolidated financial statements — unaudited (continued)

32 Restatement of prior periods following implementation of IFRS 15

The Group adopted IFRS 15 ‘Revenue from contracts with customers’ with effect from 1 July 2018. The implementation of IFRS 15 had an impact on the Group’s financial statements as at 1 July 2018 and consequently prior year amounts have been restated. The following tables and notes explain how this restatement affected the consolidated income statement, consolidated statement of comprehensive income, consolidated balance sheet, and consolidated statement of cash flows.

Commercial revenue

IFRS 15 focuses on the identification and satisfaction of performance obligations and includes specific guidance on the methods for measuring progress towards complete satisfaction of a performance obligation therefore revenue on certain commercial contracts is recognized earlier under IFRS 15. The effect of the retrospective application is an increase in cumulative revenue recognized over the financial years up to and including the year ended 30 June 2018 including a reduction to the amount of revenue recognized during the financial year ended 30 June 2018 only.

Broadcasting revenue

Following adoption of IFRS 15, certain performance obligations are satisfied over time as each Premier League match (home and away) is played — accordingly revenue is recognized evenly as each Premier League match (home and away) is played. Broadcasting merit awards were previously recognized one share in the first quarter with the remainder being recognized when they were known at the end of each football season. Merit awards represent variable consideration and therefore, following adoption of IFRS 15, are estimated using the most likely amount method based on management’s estimate of where the Club’s finishing position will be at the end of each season. Broadcasting equal share payments were previously recognized evenly as each Premier League home match was played. Note, these changes only affect the amount of broadcasting revenue recognized in each quarter, they do not affect the amount of broadcasting revenue recognized for the financial year as a whole.

Matchday revenue

The adoption of IFRS 15 has no impact on the recognition of matchday revenue.

Tax, deferred tax, hedging reserve, retained earnings and deferred revenue

The impact of the above changes in revenue recognition has subsequent impact on tax (including deferred tax), accrued revenue, the hedging reserve, retained earnings and deferred revenue.

Tax — adjustments to the tax expense and deferred tax are directly in line with the adjustments to revenue.

Accrued revenue — adjustments to broadcasting merit award revenue impact accrued revenue as the revenue is received after the period in which the revenue is recognized.

Hedging reserve — adjustments to commercial revenue impact the hedging reserve as the underlying US dollar revenue is initially hedged against a portion of the Group’s US dollar net borrowings. Amounts accumulated in the hedging reserve are reclassified to the income statement in the period when the hedged revenue is recognized in the income statement.

Deferred revenue — all other adjustments to revenue impact deferred revenue as the revenue is received or receivable prior to the period in which the revenue is recognized.

Manchester United plc

Notes to the interim consolidated financial statements — unaudited (continued)

32 Restatement of prior periods following implementation of IFRS 15 (continued)

Consolidated balance sheet as at 1 July 2017

	As previously reported £’000		Adjustment £’000		Restated £’000
ASSETS
Non-current assets
Property, plant and equipment	244,738		—		244,738
Investment property	13,966		—		13,966
Intangible assets	717,544		—		717,544
Derivative financial instruments	1,666		—		1,666
Trade and other receivables	15,399		—		15,399
Deferred tax asset	142,107		(622	)	141,485
	1,135,420		(622	)	1,134,798
Current assets
Inventories	1,637		—		1,637
Derivative financial instruments	3,218		—		3,218
Trade and other receivables	103,732		—		103,732
Cash and cash equivalents	290,267		—		290,267
	398,854		—		398,854
Total assets	1,534,274		(622	)	1,533,652

EQUITY AND LIABILITIES
Equity
Share capital	53		—		53
Share premium	68,822		—		68,822
Merger reserve	249,030		—		249,030
Hedging reserve	(31,724	)	453		(31,271	)
Retained earnings	191,436		2,017		193,453
	477,617		2,470		480,087
Non-current liabilities
Derivative financial instruments	655		—		655
Trade and other payables	83,587		—		83,587
Borrowings	497,630		—		497,630
Deferred revenue	39,648		—		39,648
Deferred tax liabilities	20,828		708		21,536
	642,348		708		643,056
Current liabilities
Derivative financial instruments	1,253		—		1,253
Tax liabilities	9,772		—		9,772
Trade and other payables	190,315		—		190,315
Borrowings	5,724		—		5,724
Deferred revenue	207,245		(3,800	)	203,445
	414,309		(3,800	)	410,509
Total equity and liabilities	1,534,274		(622	)	1,533,652

Manchester United plc

Notes to the interim consolidated financial statements — unaudited (continued)

32 Restatement of prior periods following implementation of IFRS 15 (continued)

Consolidated income statement for the three months ended 30 September 2017

	As previously reported £’000		Adjustment £’000		Restated £’000
Commercial revenue	80,544		(66	)	80,478
Broadcasting revenue	38,082		2,751		40,833
Matchday revenue	22,354		—		22,354
Total revenue	140,980		2,685		143,665
Operating expenses	(143,036	)	—		(143,036	)
Profit on disposal of intangible assets	17,279		—		17,279
Operating profit	15,223		2,685		17,908
Finance costs	(1,001	)	—		(1,001	)
Finance income	218		—		218
Net finance costs	(783	)	—		(783	)
Profit before tax	14,440		2,685		17,125
Tax expense	(6,493	)	(1,062	)	(7,555	)
Profit for the period	7,947		1,623		9,570

Earnings per share during the period:
Basic earnings per share (pence)	4.84		0.99		5.83
Diluted earnings per share (pence)	4.83		0.98		5.81

Consolidated statement of comprehensive income for the three months ended 30 September 2017

	As previously reported £’000		Adjustment £’000		Restated £’000
Profit for the period	7,947		1,623		9,570
Other comprehensive income:
Items that may be subsequently reclassified to profit or loss
Cash flow hedges	11,476		(120	)	11,356
Tax expense relating to cash flow hedges	(4,016	)	41		(3,975	)
Other comprehensive income for the period, net of tax	7,460		(79	)	7,381
Total comprehensive income for the period	15,407		1,544		16,951

Manchester United plc

Notes to the interim consolidated financial statements — unaudited (continued)

32 Restatement of prior periods following implementation of IFRS 15 (continued)

Consolidated balance sheet as at 30 September 2017

	As previously reported £’000		Adjustment £’000		Restated £’000
ASSETS
Non-current assets
Property, plant and equipment	246,831		—		246,831
Investment property	13,934		—		13,934
Intangible assets	805,694		—		805,694
Derivative financial instruments	479		—		479
Trade and other receivables	9,991		—		9,991
Deferred tax asset	136,705		(1,086	)	135,619
	1,213,634		(1,086	)	1,212,548
Current assets
Inventories	2,074		—		2,074
Derivative financial instruments	2,433		—		2,433
Trade and other receivables	80,415		4,828		85,243
Cash and cash equivalents	216,236		—		216,236
	301,158		4,828		305,986
Total assets	1,514,792		3,742		1,518,534

EQUITY AND LIABILITIES
Equity
Share capital	53		—		53
Share premium	68,822		—		68,822
Merger reserve	249,030		—		249,030
Hedging reserve	(24,264	)	374		(23,890	)
Retained earnings	199,968		3,640		203,608
	493,609		4,014		497,623
Non-current liabilities
Derivative financial instruments	523		—		523
Trade and other payables	60,898		—		60,898
Borrowings	478,065		—		478,065
Deferred revenue	35,060		—		35,060
Deferred tax liabilities	25,802		1,256		27,058
	609,348		1,256		610,604
Current liabilities
Tax liabilities	8,675		—		8,675
Trade and other payables	202,534		—		202,534
Borrowings	6,236		—		6,236
Deferred revenue	194,390		(1,528	)	192,862
	411,835		(1,528	)	410,307
Total equity and liabilities	1,514,792		3,742		1,518,534

Manchester United plc

Notes to the interim consolidated financial statements — unaudited (continued)

32 Restatement of prior periods following implementation of IFRS 15 (continued)

Consolidated statement of cash flows for the three months ended 30 September 2017

The implementation of IFRS 15 affected elements of cash generated from operations but did not affect the overall total. Other than that, the implementation of IFRS 15 had no impact on the consolidated statement of cash flows.

Cash generated from operations for the three months ended 30 September 2017

	As previously reported £’000		Adjustment £’000		Restated £’000
Profit before tax	14,440		2,685		17,125
Depreciation	2,574		—		2,574
Amortization	36,054		—		36,054
Profit on disposal of intangible assets	(17,279	)	—		(17,279	)
Net finance costs	783		—		783
Equity-settled share-based payments	585		—		585
Foreign exchange losses on operating activities	991		—		991
Reclassified from hedging reserve	4,001		(120	)	3,881
Changes in working capital:
Inventories	(437	)	—		(437	)
Trade and other receivables	16,673		4,828		21,501
Trade and other payables and deferred revenue	(31,434	)	(7,393	)	(38,827	)
Cash generated from operations	26,951		—		26,951

Manchester United plc

Notes to the interim consolidated financial statements — unaudited (continued)

32 Restatement of prior periods following implementation of IFRS 15 (continued)

Consolidated balance sheet as at 30 June 2018

	As previously reported £’000		Adjustment £’000		Restated £’000
ASSETS
Non-current assets
Property, plant and equipment	245,401		—		245,401
Investment property	13,836		—		13,836
Intangible assets	799,640		—		799,640
Derivative financial instruments	4,807		—		4,807
Trade and other receivables	4,724		—		4,724
Tax receivable	547		—		547
Deferred tax asset	63,974		(642	)	63,332
	1,132,929		(642	)	1,132,287
Current assets
Inventories	1,416		—		1,416
Derivative financial instruments	1,159		—		1,159
Trade and other receivables	168,060		—		168,060
Tax receivable	800		—		800
Cash and cash equivalents	242,022		—		242,022
	413,457		—		413,457
Total assets	1,546,386		(642	)	1,545,744

EQUITY AND LIABILITIES
Equity
Share capital	53		—		53
Share premium	68,822		—		68,822
Merger reserve	249,030		—		249,030
Hedging reserve	(27,738	)	180		(27,558	)
Retained earnings	135,099		1,658		136,757
	425,266		1,838		427,104
Non-current liabilities
Trade and other payables	104,271		—		104,271
Borrowings	486,694		—		486,694
Deferred revenue	37,085		—		37,085
Deferred tax liabilities	28,559		575		29,134
	656,609		575		657,184
Current liabilities
Tax liabilities	3,874		—		3,874
Trade and other payables	267,996		—		267,996
Borrowings	9,074		—		9,074
Deferred revenue	183,567		(3,055	)	180,512
	464,511		(3,055	)	461,456
Total equity and liabilities	1,546,386		(642	)	1,545,744

	MANCHESTER UNITED PLC

	By:	/s/ Edward Woodward
	Name:	Edward Woodward
	Title:	Executive Vice Chairman

Exhibit Number		Description
99.1		Press Release of Manchester United plc, dated November 16, 2018

Management’s discussion and analysis of financial condition and results of operations	2
Interim consolidated income statement for the three months ended 30 September 2018 and 2017	10
Interim consolidated statement of comprehensive income for the three months ended 30 September 2018 and 2017	11
Interim consolidated balance sheet as of 30 September 2018, 30 June 2018, 30 September 2017 and 30 June 2017	12
Interim consolidated statement of changes in equity for the three months ended 30 September 2018, the nine month period ended 30 June 2018 and the three month period ended 30 September 2017	14
Interim consolidated statement of cash flows for the three months ended 30 September 2018 and 2017	15
Notes to the interim consolidated financial statements	16