Rangers declare £7m operating loss

Cash in the bank at the turn of the year sat at £21.2million.

In December, Rangers raised £22.2million from its listing on the London Stock Exchange.

In a statement, after the financial figures were published this morning, Ibrox chief executive Charles Green said: "This has been a significant period in the club's history, in which vital steps were taken to ensure the survival and rebuilding of one of the UK's most venerable football institutions.

"The priority for the company to date has been to stabilise the business and put in place solid financial foundations for the future.

"To this end, revenue streams have been enhanced, and costs cut.

"In addition, important strategic steps have been taken, such as the agreements now in place with Sports Direct, Puma and Blackthorn Cider.

"These achievements have been made whilst retaining the important fabric and structure of the club.

"We will continue to execute our growth plan, and investors and supporters can have confidence in the development of operations as the club progresses.

"In the last several months, those of us new to the club have learned very quickly how much Rangers means to its phenomenal fan base but also to football in general.

"Undoubtedly, challenges lie ahead but the club is now well equipped to meet them successfully.

"Above all, the club and its supporters are resolute in the belief that, both on and off the pitch, Rangers can look to the future with confidence and pride.

"We have made great strides in a short spell but there is much work to be done to fully restore Rangers.

"Given that the club is in the unprecedented situation of playing in the Scottish League Division Three, there is, at this stage, a clear impact on a range of revenue streams, particularly in broadcasting and with the absence of European participation.

"We are pleased however that operational costs, particularly staff costs and wages, have been substantially reduced over the period, although the company is not expected to report an operating profit at the year-end given revenue stream forecasts.

"In the current financial year our focus is firmly on rescuing the club and starting the rebuilding process in earnest."

Green again paid tribute to the club's supporters for the part they have played in Rangers' recovery so far.

He added: "All of us involved in the management of the club are particularly delighted and are indeed in awe of the contribution supporters have made to the club.

"Season ticket sales for 2012-13 stand in excess of 38,000 - representing an improvement on the previous season.

"It is also among the highest levels of season ticket sales achieved by any UK club.

"The response from supporters to the Initial Public Offering was also remarkable raising £4.5m in the weeks preceding Christmas and we could not have asked more from our supporters in terms of attendance at matches."

Green's consortium purchased the business and assets of Rangers last summer after the oldco was consigned to liquidation.

A further drop in overall operational costs is expected as part of further cost-saving initiatives.

Rangers expect to report an operating loss at year end in accordance with the business plan and broader growth strategy.

Chairman Malcolm Murray reflected on "a period of extraordinary progress for the club."

He added in a statement: "These interim results cover the seven-month period to December 31 2012 and reflect the fact that the club is successfully rebuilding one of the UK's most renowned football institutions.

"In my 30 years' investment experience, I have never seen a business move from the liquidation of one company to another's successful flotation in such a short space of time.

"This could only have been achieved by the outstanding efforts of management, staff, advisers and fans. This unity and sense of purpose has, rightly, been admired internationally.

"The company's performance to date will give further encouragement to all Rangers supporters who are unswerving in their commitment to ensure the club enjoys a successful future."

Rangers finance director Brian Stockbridge claims the club were never expected to make a profit in the first year.

He said: "Nobody expects the club to be making a big profit in the first year.

"We are not about trying to make profit at the expense of everything else.

"We do need to create shareholder value because we are now a public company but it's about approaching things in a sensible way.

"The existing investors haven't invested to make profits in the first six months, put it that way."

He added: "As long as we have proper, stable financial procedures in place, as long as we continue to push forward and enhance the other commercial revenue opportunities that the club hasn't enjoyed before and as long as we are efficient in what we spend - and we do need to spend on players at the right time as well - then the club can continue for the foreseeable future."

The figures also came as no surprise to finance expert Neil Patey of Ernst and Young.

And he believes Rangers - currently sitting top of the Irn-Bru Third Division - may have to secure their return to the Clydesdale Bank Premier League before making a profit.

He said: "Most people were expecting some sort of loss but just weren't sure exactly how big the loss would be.

"I don't think the fact it's making a loss is a big surprise. The quantum of it, again, is not totally unexpected.

"It's slightly depressed by the fact the seven month period includes June and July, where there is very low revenue, particularly for Rangers who weren't playing any pre-season friendlies or European football.

"Is it something to be concerned about?

"I think the most important thing from a fan's point of view is that there is cash of about £21million sitting in the bank, off the back of the IPO fund raised.

"For the time being, Rangers can continue to incur fairly significant losses because of the money raised from the IPO.

"What Charles Green will want to do is continue to try to improve his revenue line and, if they work their way back up the divisions, make work the continued support of all the fans buying season tickets and buying tickets for home games.

"I'm sure he will review ticket pricing as they go back up the leagues.

"Also, improving retail and sponsorship deals, some of which are already alluded to in the results with Puma and Sports Direct.

"But it also stresses the need for a continued tight control of costs because obviously you can't continue to run a loss of around £10million or £11million over the year indefinitely."

He added: "I don't have a crystal ball but I would think it's quite challenging to make a profit until they're back in the SPL.

"They might come close in the First Division.

"But I would have thought, from a prudent point of view, any sensible break-even or significant profit can only be achieved when they're back in Europe.

"I would say there are two successes as a financial commentator looking at it.

"One is the IPO - to raise in excess of £20million so soon after the club had gone into liquidation was a big success.

"Secondly, there are the fan attendances and season ticket sales, which have really helped revenue lines.

"Those are two major successes for the club, without which Rangers would be in a much more perilous financial state.

"Then it comes down to the cost control. They are running a squad that is obviously more expensive than your average Third Division team. Probably more than your average Second or First Division team for that matter.

"I'm sure they will continue to review that when they can go back into the transfer market when the transfer embargo is lifted.

"I think there is also the recognition that this is Rangers and it's always going to cost more to run Rangers than your First, Second or Third Division teams.

"What's most important for them is just to get back to the SPL, which brings increased media money and gives them an access to Europe and the associated revenues."