Losses increase on one-off costs
Rangers plans share issue as club seeks stability
Ibrox: debt free (SNS Group)
Rangers board is planning a share issue next year to provide further funds for the Ibrox club.
It revealed last night that it will require £4 million before the end of this season to meet its liabilities and £3.2m next season.
In a statement with the annual accounts it says the final amount is “dependent on future football performance and European football participation amongst other factors”.
The club is currently dependent on chairman Dave King’s New Oasis Asset company to provide loans which have been extended to July 2019.
The board is also hopeful that the club will be in position to proceed with a share issue during 2018 in order to provide further finance for the group.
A pre-tax loss of £6.83 million for the year ending 30 June 2017 was more than double the £3.33m deficit in the previous year.
Turnover increased by £7m to £29.2m but operating expenses rose by £8m to £32.9m. This included a payment of £3m to Sports Direct to terminate the unpopular retail agreement negotiated by the previous Rangers board. This non-recurring expense was partly a reason for the company not breaking even.
Speaking of the settlement with Mike Ashley’s Sports Direct on merchandising club products, Mr King said: “The termination of the old retail arrangements with Sports Direct resulted in the various intellectual property rights being transferred back to the club.
“These rights have substantial value and the optimisation of that value can now be realised and further developed to the benefit of the company and consequently the team.
“Historically, Rangers retail operations were very profitable and we are now in a position to take the necessary action to return them to that level of contribution.
“We now have a level of operational and financial stability that had not been present in recent years. We have a strong balance sheet with ongoing financial support when this is required.
“Our stadium and training grounds are of the highest standard and are debt free. Our off the field distractions are finally behind us and we can now focus exclusively on improving our core business operations on a sustainable basis.”
The annual general meeting takes place on 30 November.