Rangers count cost of Covid with losses of £23.5m
Impacted: Ibrox (pic: SNS Group)
Rangers have been left counting the cost of the pandemic after announcing a loss of £23.5 million.
The figure for the financial year ending June 2021 is nearly £8m up on the previous 12 months despite the club winning its first Scottish Premiership title for 10 years.
Revenue was down £13m, the club indicating this was mostly due to the “profound” effects of Covid-19.
Chairman Douglas Park said: “The past year has continued to bring unprecedented challenges to our club.
“The full impact of COVID-19 had yet to play out when I penned my previous annual report.
“The pandemic wrought a profound impact on our club, both on and off the field of play and its effects continue to be felt.”
The club’s annual report stated: “The year to 30 June 2021 was undoubtedly and heavily affected by the COVID-19 pandemic.
“The associated negative impact on revenue (both matchday and non-matchday) was in excess of £20m, resulting in a reduction in profitability of more than £10m.”
Rangers were supported by nearly £21m from directors and existing shareholders, with £17m invested in Steven Gerrard’s playing squad.
Such reliance in the future, the club indicated, would call into question its ability to continue as a going concern.
“The board has considered the level and timing of additional funding that may be needed and is satisfied that any such amounts will be made available as and when required,” the report said.
“The board acknowledge that the uncertainty over the level of additional funds that will be required and a lack of a binding debt facility indicate that a material uncertainty exists which may cast doubt over the group’s ability to continue as a going concern and therefore its ability to realise its assets and discharge its liabilities in the normal course of business.
“Nevertheless, having secured the offer of further loan funding referred to above, the board of directors believe that there is a reasonable expectation that the Group will at all times have adequate resources to continue in operational existence for the foreseeable future.
Challenges: Douglas Park (pic: SNS Group)
“Accordingly, they continue to adopt the going concern basis in preparing this report and the statutory financial statements.
“When the current board and investors wrestled back control of our club in 2015, it saw before it a 10-year recovery project. Today, we consider that prognosis to be accurate.
“Painstakingly and with unerring resolve, your Board and executive management team have undertaken the rebuilding process. Sticking to the task has been no mean feat and has been made possible with the support of our loyal investors and fans.
In summary, clear and decisive steps have been taken to simplify, strengthen and normalise our financial structure as we drive the business toward a sustainable model.
“In this context it is important to note that the commitment and investment of your board and its loyal and aligned investors has enabled a significant reduction in the company’s identified future funding requirement. This figure, which includes the expected cost to complete capital projects, now stands at £7.5m for the coming 21/22 season and only £0.4m in the following season.
“While still a substantial sum, the remaining requirement demonstrates the very significant progress made given that the funding requirement identified in last year’s accounts was more than £23m over the subsequent two seasons. Pivotal to this reduction has been the commitment of our current group of investors to provide funding to settle the considerable player transfer liabilities built up in the early years of the recovery period.
“Your board remains steadfast and committed to its support in meeting this funding requirement. Much work remains to be done as we close in on improving our business model: a model that must be fit for this football club, sustainably so, to provide solid foundations as we complete our recovery programme and build a path of maintainable growth.”
The club’s AGM is scheduled to go ahead on Tuesday, 30 November 30 at the Clyde Auditorium.