Rangers announce operating losses of £14.4m

The club, who raised £22million through a share issue in December, revealed they had £11.2million cash in the bank on June 30, £4.5million of which came from season-ticket sales.

Rangers also announced they would hold their annual general meeting on October 24.

Rangers' accounts

Meanwhile, Rangers revealed they had received a request for a notice with the resolution that Malcolm Murray, Paul Murray, Scott Murdoch and Alex Wilson be appointed directors at the AGM. However, the board claim the resolution is "unlikely to be properly constituted under s338 of the Companies Act 2006".

The accounts, for a 13-month period, also show that former chief executive Charles Green was paid a total of £933,000.

Green stepped down in April following allegations over links with former oldco Rangers owner Craig Whyte, which he denied and were the subject of an internal investigation by the club, which was not published.

The club today announced that Green, whose proposed return to the club as consultant in August was vetoed following an outcry, no longer had any notifiable interest in the company following the sale of shares.

Green received wages of £333,000, a severance payment of almost £220,000 and a bonus of £360,000.

Other highly-paid employees included manager Ally McCoist, who received £825,000. McCoist revealed on Friday that he had agreed a pay cut.

Finance director Brian Stockbridge received more than £400,000, about half of which was a bonus, while former commercial director Imran Ahmad, who has launched legal action against the club over a bonus row, received £300,000.

A breakdown of the figures showed first-team wages were £7.8million while the club's biggest income stream by far was gate receipts and hospitality (£13.2million).

Other major sources of revenue included sponsorship and advertising (£819,000), retail (£1.6million), broadcasting rights (£778,000) and commercial revenues of almost £1million.

The club revealed they had £4.2million of non-recurring expenses, most of it from the repayment of oldco Rangers' football debts totalling £2.7million, as agreed when the club's Scottish Football Association membership was transferred.

The rest of this total was made up of investigation expenses and acquisition expenses totalling £600,000 each and share issue costs of £300,000.

Rangers also revealed they had spent £600,000 fighting Whyte's legal claim against the club as part of an overall legal bill of £2million.

Stockbridge claimed Rangers had turned the corner to reach financial stability.

Stockbridge, who formed part of the consortium who launched the new company after a £5.5million purchase of the liquidation-bound club's assets and business, wrote in his business report: "It should also be noted that we have committed to investing £1.8m in stadium Wifi, trackside LED screens and the jumbo screens to improve fan experience.

"This should also help generate additional revenue streams and it is the intention to make profitable use of Edmiston House, which was brought back into the club's ownership along with the Albion car park for £2.5m.

"Inherited contracts from pre-administration included termination payments of £1.7m for expensive players and their agents, which would have cost the club £2.5m for the current season had we not acted when we did.

"However, as has been made clear, these are all exceptional cash costs which will not be repeated and so going forward we can look to costs continuing to narrow and sponsorship developing."

Stockbridge added: "Whilst an operating loss of £14m was made on a turnover of £19.1m in the period, it will not be repeated this season. Turnover in retail this season is expected to bemuch higher than the £1.6m received.

"Operational costs are now significantly lower than they were at the start of the period and additional revenue streams are being generated."

While Stockbridge is claiming the club is on the road to financial stability despite the losses, the struggle for power in the boardroom shows no signs of calming.

Last month, the plc board reached an agreement with a group of dissenting shareholders, led by Clyde Blowers chairman Jim McColl, that saw them drop demands for a general meeting to vote on proposed boardroom change in return for a guarantee that the AGM would be held before the end of October.

The current directors could be voted off at the AGM but the board aims to block a fresh bid to install new directors, including former chairman Malcolm Murray and Paul Murray, who was director of oldco Rangers before being removed by Whyte.

In an announcement to the London Stock Exchange, the board confirmed it had received a notice dated September 27 requesting the company circulate resolutions to shareholders including the appointment of the four proposed new directors.

However, the board stated that no amendment to the terms of the withdrawal of the original request for change had been discussed or agreed and said it therefore considered the notice "is unlikely to be properly constituted under s338 of the Companies Act 2006".

The statement added: "Given the basis upon which the requisitioners had agreed the withdrawal of the requisition and as the notifying shareholders have not requested to discuss this prior to sending the notice, the board currently considers the proposed resolutions to be vexatious.

"The board is also concerned that the contents of the proposed resolutions may also be either ineffective or frivolous as any director appointment must comply with the company's articles of association and is subject to prior regulatory approval.

"The board further notes that the notice for the annual general meeting of the company to be held on 24 October 2013 had in any event been sent to the company's printers for printing on Friday 27 September 2013."

In a statement on the club website, Craig Mather said: "In presenting my first annual report as Chief Executive, I am delighted to state that substantial progress is being made in rebuilding Rangers.

"The club is in a very different place to where we were in May 2012. Then, the situation was traumatic and the future uncertain. Now, we enjoy financial stability and have a solid platform from where we can focus all our efforts on achieving success as one of football's great clubs.

"In the last year, key milestones have been passed successfully. The first team squad has strengthened considerably. The club enjoys a healthy bank balance. The cost base has been reduced significantly. Business performance is improving and, most importantly, the club continues to benefit enormously from the unwavering commitment of our fans. Without this support, the re-establishment of Rangers could not happen."

Mathers added that the operating losses and retained profit were consistent with the club's five-year business plan.

He said: "As expected, we are reporting significant operating losses, although a retained profit. This is consistent with the club's five-year business plan. At no stage was it anticipated nor forecast that the business of the football club could return an operating profit in the first year since acquisition. The full recovery of Rangers will take time and I am delighted to report that the Club is firmly on track to achieve this objective.

"Revenues totalled £19.1 million and while there was significant progress made in terms of first team wages/turnover ratio, now at one of the lowest for leading clubs at 43%. Operating losses totalled £14 million. First team players wages were reduced to £7.8 million and more than £4.2 million of expenditure is non-recurring. Profit on ordinary activities before taxation totalled £1.3 million leaving a profit for the period of £1.2 million.

"Lower season ticket prices reflecting the league status meant a drop of nearly 33% in season ticket revenues. Media revenues fell and there were financial consequences of the collapse of JJB Sports. There were also substantial payments of £2.4 million made to clear football debts to other clubs incurred pre-administration which the management of the club was committed to addressing, although were not strictly liable to do so.

"We have invested £1.8m in stadium wifi and LED/Jumbo screens to improve fan experience. This should also help generate additional revenue streams and it is the intention to make profitable use of Edmiston House, which was brought back into the club's ownership along with the Albion Car Park for £2.5 million.

"Following the acquisition of the club in June last year and the securing of our position within the Scottish league structure, Rangers was floated successfully on the Alternative Investment Market in December of last year, raising finance in the order of £22m."

Mathers said the Rangers' victory in Division 3 demonstrated that the first stage of the club's recovery was complete.

He said: "The first stage of the club's recovery process was completed with the team winning the Scottish Football League Division 3 by 24 points. This was achieved despite being severely curtailed in preparation for the season due to uncertainty surrounding the club's league status and an embargo on player registration.

"With nine new players now on board, who should help make the matchday experience more memorable and entertaining, the club has made a very encouraging start to this season and is leading the new SPFL League One.

"The rebuilding process is also continuing apace off the pitch and is wholly consistent with the five-year business plan that was set out to investors ahead of the Initial Public Offering in December. In that plan we forecast that in year one the club would endure challenging trading conditions given its new league status in Division 3. The commercial impact of being in that division was substantial with revenues from season tickets and hospitality reduced by approximately one third. There was also a reduction in sponsorship values.

"Financial discipline has been essential and we will continue to keep a firm grip on expenditure. As we strive to progress through the leagues, revenues can be expected to rise and there will be greater opportunity to improve financial performance further."

He added: "Given the circumstances of Rangers in recent years, there has continued to be widespread comment and speculation about the financial position of the club, much of it ill-informed. It has been imperative for us to retain focus. The Group has a very healthy bank balance and very little debt.

"There is only £1.6 million of finance leases being repaid and the club has no loans, overdrafts or bank borrowings.

"The club's largest revenue stream is season tickets and the commitment demonstrated by supporters last season and again this season has been gratifying. The club's business is performing well and there is good cause for optimism.

"We have in place significant sponsorship agreements with PUMA, Blackthorn, SportsDirect.com, Coca-Cola, and Ladbrokes among others. Indeed, our sponsorship portfolio contains some of the biggest global brands and we are justified in taking pride in these relationships. It is important to note that we have not stopped innovating and developing with new business and technological initiatives. The club is confident that these investments will generate essential revenue growth in the future.

"Business is getting stronger, people and companies do wish to engage with Rangers again and this club is gearing up to return to its rightful place in Scottish football. This is made possible because of this club's fans - men, women and families who have shown outstanding commitment to Rangers.

"I am confident that Rangers can deliver enduring success for them. They deserve nothing less.

"The players, the management and the club staff have all worked tirelessly in order to achieve the progress made so far and remain dedicated to meeting the challenges that lie ahead. The club's legends, such as Walter Smith and Sandy Jardine, have also played their parts in supporting these efforts. Rangers are in a position to move forward with growing confidence and within the club there is a real determination to ensure the future is secure, sustainable and successful."