Review of Rangers accounts 2019

[Bluedell 5,329]

20 minutes ago, Rick Roberts said:

Great article Bluedell.

 

One thing that's notable is the lack of coverage that Sport Direct get for their actions. I guess club are limited in what they can say and everything else has been said over the years, but i'd still expect it to get more airing. After all this is a football club being severely held back by open and deliberate badness from SD. I know fine well why our press don't mention it but can only imagine the coverage it would get if celtic were being disadvantaged.

 

Thanks mate.

 

The problem with press coverage is that the current agreement was freely entered into by the current board so it's difficult for the press to criticise SD, and they'd be loathed to go overboard anyway due to the litigious nature of SD.

[Bill 13,717]

While I enjoyed and agreed with the summary from @Bluedell it's important to remember that the loss was still the full £11.3m stated. Even if some of that figure relates to a previous accounting period and even if some of that loss can be regarded as relating to non-repetitious costs, the accounts nevertheless describe the extent of the journey yet to be undertaken.  No matter how well these losses were predicted by the board, no matter how much they adhere to the current business plan, it would be negligent to assume that means we are now in long term security. We're not, yet.

 

The present board has done a commendable job so far and no doubt is fully aware of our remaining challenges. I'm sure they also have a forward business plan to take us to a more sustainable operating regime. However, we remain a very long way from turning an operating profit and even closing the current deficit is heavily dependent on qualifying for European competition group stages every year - something that is a long way from certain. We also seem very dependent on the continuing health and commitment of a small number of key individuals, without which there's no guarantee the current business plan can survive. We're on the right track at last but that's all we are. We're nowhere near a situation where anyone should feel relaxed about the future. Getting better isn't the same as being fully cured. A great deal of remedial work remains to be done and the path is unlikely to be without its challenges. It's vital the board and supporters don't allow the ten-in-a-row issue to subvert or overshadow the rebuilding of Rangers.

 

I'd love to see the financial projections for the next five years, to see how the board sees our income streams and profitability developing ... and how much risk is attached to each element of this. In this business you need to be heavy on caution, contingency planning and operate within reasonable safety margins. 

 

This is not to pour cold water of achievements to date, which are considerable, but merely to caution that what we've actually achieved so far is more about direction than financial security.

Edited November 6, 2019 by Bill

[buster. 4,808]

13 minutes ago, Bill said:

While I enjoyed and agreed with the summary from @Bluedell it's important to remember that the loss was still the full £11.3m stated. Even if some of that figure relates to a previous accounting period and even if some of that loss can be regarded as relating to non-repetitious costs, the accounts nevertheless describe the extent of the journey yet to be undertaken.  No matter how well these losses were predicted by the board, no matter how much they adhere to the current business plan, it would be negligent to assume that means we are now in long term security. We're not, yet.

 

The present board has done a commendable job so far and no doubt is fully aware of our remaining challenges. I'm sure they also have a forward business plan to take us to a more sustainable operating regime. However, we remain a very long way from turning an operating profit and even closing the current deficit is heavily dependent on qualifying for European competition group stages every year - something that is a long way from certain. We also seem very dependent on the continuing health and commitment of a small number of key individuals, without which there's no guarantee the current business plan can survive. We're on the right track at last but that's all we are. We're nowhere near a situation where anyone should feel relaxed about the future. Getting better isn't the same as being fully cured. A great deal of remedial work remains to be done and the path is unlikely to be without its challenges. It's vital the board and supporters don't allow the ten-in-a-row issue to subvert or overshadow the rebuilding of Rangers.

 

I'd love to see the financial projections for the next five years, to see how the board sees our income streams and profitability developing ... and how much risk is attached to each element of this. In this business you need to be heavy on caution, contingency planning and operate within reasonable safety margins. 

 

This is not to pour cold water of achievements to date, which are considerable, but merely to caution that what we've actually achieved so far is more about direction than financial security.

Very much so.

 

As I said earlier, it's not rocket science to see that most of what is going on is geared towards the first team stopping 9IAR and potentially 10IAR....and the main risk that I can see is fall-out if we weren't able to achieve it......It's something that isn't being talked about at a fan level for understandable reasons but from a business POV, it's more than just an outside possibility. The bookies would probably tell you that it's probable.

 

 

Beyond that, the headline issues for me are:

 

- Player trading

- Retail

- European group stage reliance / what modification of tournament set-up will mean (new 3rd trophy / Euro Conference)

 

We need to normalise retail, start making substantial profits from player trading whilst having a team that can win the title and make European group stages more regularly than we ever have......A considerable challenge to say the least.

 

I tend to think this is the season we have to win the title and IIRC it would fit exactly with what Paul Murray said back in April 2015, that it could take up to 5 years.

 

 

 

 

 

[RANGERRAB 3,254]

Two failed managerial appointments haven’t helped our financial situation either since 2015.

MW I can sympathise with as he looked sound to begin with but Pedro was never going to work 

[Bluedell 5,329]

2 hours ago, Bill said:

While I enjoyed and agreed with the summary from @Bluedell it's important to remember that the loss was still the full £11.3m stated. Even if some of that figure relates to a previous accounting period and even if some of that loss can be regarded as relating to non-repetitious costs, the accounts nevertheless describe the extent of the journey yet to be undertaken. 

It's not the full £11.3m noted. It's really the £8.7m figure that I refer to.

 

The notional interest doesn't refer to a previous period or is a non-repetitious cost.

 

Accounting rules have changed since you had your company. 

 

Let's say that Rangers owe £9m for players and there are directors' loans of £15m. We both understand that these are the amounts that are to be paid. However new accounting rules state that notional interest has to be charged on these amounts, so accounting entries of £1m interest for the players and £1.5m interest on the loans are charged.

 

This means that in the balance sheet rather than £9m and £15m showing as being owed, it now shows £10m and £16.5m and we've got an interest payable charge of £2.5m in the P&L. This is despite the fact that we're only going to repay £9m for the players and the loans will probably be converted to share capital. We're never going to incur the £2.5m through the P&L.

 

It's crazy, but that's the way that accounts are being prepared at the moment.

 

Apologies if you understood that already but I fail to see why notional interest is an actual loss.

 

I'd agree with your point on the non-repetitious costs and the fact that we've still got a way to go yet to survive without support.

[Bluedell 5,329]

We already had the article on the other thread on the accounts and I don't see the need for our forum to be infected by mad Celtic fans who throw doubt on our ability to trade through to the end of the season, no matter where they're published.

[ian1964 10,409]

Just now, Bluedell said:

We already had the article on the other thread on the accounts and I don't see the need for our forum to be infected by mad Celtic fans who throw doubt on our ability to trade through to the end of the season, no matter where they're published.

Agreed. We don't need to read their shite again 

[buster. 4,808]

4 hours ago, Bluedell said:

We already had the article on the other thread on the accounts and I don't see the need for our forum to be infected by mad Celtic fans who throw doubt on our ability to trade through to the end of the season, no matter where they're published.

Just read the Forbes article and whilst there are several parts of it that I take issue with / don't agree with, the final line about and I paraphrase...'winning or else' is along the same lines as my question about what happens if we don't stop 10IAR ? 

 

That isn't a mad question. 

 

As a football fan, I think we have a real chance of doing it this season with the squad and management/coaching team we currently have but looking at the situation from a financial POV, it's not something to be ignored.

 

 

 

[Bluedell 5,329]

49 minutes ago, buster. said:

Just read the Forbes article and whilst there are several parts of it that I take issue with / don't agree with, the final line about and I paraphrase...'winning or else' is along the same lines as my question about what happens if we don't stop 10IAR ? 

 

That isn't a mad question. 

 

As a football fan, I think we have a real chance of doing it this season with the squad and management/coaching team we currently have but looking at the situation from a financial POV, it's not something to be ignored.

 

I'm not sure I see the relevance of 10IAR financially. We move onto the next season and try and win the league and do as well as we can in Europe if they do. 

 

I'm not bothered about XIAR. It's tainted as it was won off the park by them voting us down to the bottom division and and threatening others to do so. It's not worth anything. I couldn't even tell you what number this season would be if they were to win the League. 

 

We need to continue to rebuild and strengthen and we'll get there. Let's focus on ourselves and not the mob across the city. 

[Gaffer 1,665]

2 hours ago, buster. said:

Just read the Forbes article and whilst there are several parts of it that I take issue with / don't agree with, the final line about and I paraphrase...'winning or else' is along the same lines as my question about what happens if we don't stop 10IAR ? 

 

That isn't a mad question. 

 

As a football fan, I think we have a real chance of doing it this season with the squad and management/coaching team we currently have but looking at the situation from a financial POV, it's not something to be ignored.

 

 

 

Ten in a row is a complete red herring.  It has absolutely nothing to do with the strategy of our board.  Winning the league is more of a status thing rather than a financial thing.  Yes, if we qualify for the Champions League group stages it can be lucrative but our finances are not based on winning the league this season or next.  They're not even based on qualifying for the Europa league every year.  Our strategy is clearly to grow the club to a point where it can become self sufficient with player sales.  This takes investment, which King has said since day one.  He was ridiculed by some commentators for suggesting he'd put in at least £50m, but that's exactly what he's doing.  King is successful and knows what it takes to get a business off the ground.

 

The worst case scenario for us before was losing our club.  Now the worst case scenario is that we have a club that operates as the second best club in Scotland, unable to compete with the financial strength of Celtic.  However, already these accounts show that we could operate on a break even basis if we chose to do so.  I'm just delIghted we have a board that's willing to fund our development, meaning we can live beyond our means for as long as they're prepared to fund it.  I think we should by all means scrutinise, but let's also celebrate the fortunate position we enjoy at the moment.