Annual Accounts

[bossy 0]

I have done a little cash flow, making assumptions but I reckon that we have the following once we account for the season ticket cash:

 

Bank balance at 30/6 11,181

Ranger Retail cash (946)

 

Net balance 10,235

 

Season ticket cash 2,850

 

Balance going forward 13,085

 

 

I believe that we could have a deficit of £885K per month (giving the directors the benefit of increasing income by around £2m and reducing costs by the same amount), so we could still have around £10.4m in the bank. This could decrease down to around £4m by the end of April next year, and season ticket cash would start to flow in after that.

 

My back of an envelope calculations are that we should have around £29 million in cash for this financial year. This number comes from £11 in the bank, plus gate receipts and other revenues as identified in the annual report, less those gate receipts already counted in the cash in bank number. That £29 million contains an assumption that management can increase overall revenue by 20% during the year.

 

On the outgoings side, we had around £33 million in cash going out last year (see note 3). Assuming around £5 of that was for one off costs and assuming that management can take another 10% off the cost base then we are looking at outgoings of around £25 million.

 

So, at the end of next year we are still solvent but most of the cash is gone. Our longer term problem is how we grow revenue and/or cut costs so that we are not running an annual operating loss. Note 2 to the annual report gives our revenue at £19 million. But we also know that includes some season ticket revenue for this season. So our annual revenue is overstated by around £4 million. Even if we can grow the annual revenue to £18-£20 million we still have a £5 million gap. And this assumes pretty stellar performance from management.

 

I just don't see how we can avoid going back to investors for more money towards the end of next year. And the problem there is that the institutional investors are backing McColl/Murray while the changing of NOMAD once again will not endear the investing community. In addition, the current board are doing a grand job of alienating the support. We really need a board that has the respect and trust of both the support and the investing community. Right now I am not sure that this board has either

[Bluedell 5,329]

My back of an envelope calculations are that we should have around £29 million in cash for this financial year. This number comes from £11 in the bank, plus gate receipts and other revenues as identified in the annual report, less those gate receipts already counted in the cash in bank number. That £29 million contains an assumption that management can increase overall revenue by 20% during the year.

I don't see how revenue is going to increase by 20%. Gate receipts will stay static. Retail will probably increase but given what we got pre-JJB and the fact that we weren't negotiating from a position of strength, I doubt we will get more than £2m net.

 

On the outgoings side, we had around £33 million in cash going out last year (see note 3). Assuming around £5 of that was for one off costs and assuming that management can take another 10% off the cost base then we are looking at outgoings of around £25 million.

Most one-off costs would be included in note 5 and not note 3. There would be some, but I can't see it being anywhere near £5m. Knocking 10% off the cost base is a big ask as well and probably a bit over-optimistic.

 

So, at the end of next year we are still solvent but most of the cash is gone. Our longer term problem is how we grow revenue and/or cut costs so that we are not running an annual operating loss. Note 2 to the annual report gives our revenue at £19 million. But we also know that includes some season ticket revenue for this season. So our annual revenue is overstated by around £4 million.

The £19m does not include any season ticket money from this season..

 

I just don't see how we can avoid going back to investors for more money towards the end of next year. And the problem there is that the institutional investors are backing McColl/Murray while the changing of NOMAD once again will not endear the investing community. In addition, the current board are doing a grand job of alienating the support. We really need a board that has the respect and trust of both the support and the investing community. Right now I am not sure that this board has either

Agree with most of that.

[bossy 0]

I don't see how revenue is going to increase by 20%. Gate receipts will stay static. Retail will probably increase but given what we got pre-JJB and the fact that we weren't negotiating from a position of strength, I doubt we will get more than £2m net.

 

I am trying to give management the benefit of the doubt.

 

Most one-off costs would be included in note 5 and not note 3. There would be some, but I can't see it being anywhere near £5m. Knocking 10% off the cost base is a big ask as well and probably a bit over-optimistic.

 

One-off costs in Note 5 not counting the release of negative goodwill was £4.261 million. I just rounded it to £5 million. The 10% off costs is another example of giving management the benefit of doubt.

 

The £19m does not include any season ticket money from this season.

 

Agree on the £19 million (my mistake). Given that season ticket revenue was £8 million, I am curious as to where the other £5 million in gate receipts and hospitality came from. The more so as we had 38,000 season tickets sold and an average attendance of 39,335. There is clearly scope to increase season ticket revenue. An increase in the average price to £250 would yield another £1.4 million.

 

I have tried to be generous to management and make best-case projections which assumes they are competent. But it doesn't change the fundamental problem which is the gap in revenue and outgoings and which is eating into our cash.

Edited October 3, 2013 by bossy

[Bluedell 5,329]

One-off costs in Note 5 not counting the release of negative goodwill was £4.261 million. I just rounded it to £5 million. The 10% off costs is another example of giving management the benefit of doubt.

But you were using note 3 as your base and the costs in note 5 aren't included in note 3.

[calscot 0]

I thought a modest increase should have been applied this year. I think its inevitable for next year.

 

As someone said recently that this is a bit of a wilderness year - last year was the first and so the start of the adventure, next year has the excitement of re-qualifying for the top league, while this year is a bit flat. So I think the board took that on and kept the prices the same this year to keep up the fan-base who go to games (with maybe the small drop that we're seeing), and they are planning a "double" increase next season which could be significant (50%?).

[stewarty 1,876]

As someone said recently that this is a bit of a wilderness year - last year was the first and so the start of the adventure, next year has the excitement of re-qualifying for the top league, while this year is a bit flat. So I think the board took that on and kept the prices the same this year to keep up the fan-base who go to games (with maybe the small drop that we're seeing), and they are planning a "double" increase next season which could be significant (50%?).

 

I accept the logic. And it was a good gesture to all those who stuck with the club in hard times. Nonetheless, I did think a modest increase to cover inflationary increases in costs was likely for this season.

[calscot 0]

I am trying to give management the benefit of the doubt.

 

 

 

One-off costs in Note 5 not counting the release of negative goodwill was £4.261 million. I just rounded it to £5 million. The 10% off costs is another example of giving management the benefit of doubt.

 

 

 

Agree on the £19 million (my mistake). Given that season ticket revenue was £8 million, I am curious as to where the other £5 million in gate receipts and hospitality came from. The more so as we had 38,000 season tickets sold and an average attendance of 39,335. There is clearly scope to increase season ticket revenue. An increase in the average price to £250 would yield another £1.4 million.

 

I have tried to be generous to management and make best-case projections which assumes they are competent. But it doesn't change the fundamental problem which is the gap in revenue and outgoings and which is eating into our cash.

 

Is the average attendance for league games or overall? I think the league was actually 45,750 (including non-attending season ticket holders) which gives an average of 7,750 over season ticket income.

 

At say £18 average a ticket, that would make an additional £2.5m.

 

Then there are the cup games although some of that money is given to the opposition.

 

We had seven cup games at home at say an average of 24k @ £18 * 0.6 is about quarter of a million. Say 50k from the other fixtures and that's £2.8m to add on.

 

Then there is hospitality which we've not yet included... How much is that? £2m for 25 games?

 

That would add up to £12.8m although it's all speculative.

[bossy 0]

But you were using note 3 as your base and the costs in note 5 aren't included in note 3.

 

That wasn't clear to me from the notes. It is stated more clearly in the business review. In any event, it just makes the revenue/outgoings gap worse. I'm not an accountant. But I have plenty of experience in what a business needs to do to be successful. In this respect, Rangers still have a lot to do and are going to need more cash. And I am not confident that this board has the means to raise the sort of cash we will need to complete the journey.

[the gunslinger 3,366]

If we need to sell players sobeit, as much as i'd be gutted at losing Wallace in particular.

 

we wouldn't need to if we weren't paying spiv bonuses.