Big Rangers Administration/Liquidation Thread - All chat here!

[Johnstoun]

For every £5 they raise they'll spend £10

[Bookies Love Me]

You just don't understand it, HT. I'll have a proper look the night when I'm on the laptop and I'll show the positives.

Still waiting

[scottxs]

Where do Frankie de bear go? 1 minute defending his club by bereating me about mine then like kaiser suase he was gone. In actual fact where was all the rangers supporters. Was there a protest going on ?

[The DA]

Can I just check my understanding?

• Rangers made an operating loss of £14M on a turnover of £19M. Does that mean they spent £33M?
• The £14M loss is being paid for by the share issue of £22M?
• So they had £8M of that left at the end of June?
• But that bank account is shrinking at a rate of £1M/month meaning they only have £5M of it left today?
• And that £5M will run out by end-February, or by April if they get the rest of their season ticket money in?

Oh, my! Let's hope they don't have any extraordinary costs over the next few months - like any court cases or tax tribunals that need lawyers.

[Bookies Love Me]

Where do Frankie de bear go? 1 minute defending his club by bereating me about mine then like kaiser suase he was gone. In actual fact where was all the rangers supporters. Was there a protest going on ?

It was way past his bed time (or the nurse had came round with the pills).

[Ken Fitlike]

We service our debt.

We pay our taxes and creditors.

We took stock of overspending years ago (to keep up with the cheating oldco) hence why we have been shockingly bad for so long

But as a club our heads are held high.

Your shameful Newco is an arrogant, immoral, disgusting entity just like your scum support.

Enjoy your big fancy state of the art electronic scoreboard while we watch the Newco die

Enjoy your half a million pound team bus (whats left of it)

Enjoy worshipping the greedy, fat, scaremongering joke of a manager

Enjoy the Charity money your despicable new club have kept for themselves

Enjoy reading articles from an ex-media hack who agrees with us all your club died on your OFFICIAL site

Whilst the rest of us wait for the inevitable day when you have no football club at all to attach your draconian, outdated, bigoted views to.

Hopefully then you will all go back to the caves where you were born and rid Scotland of it's shame.

zinger after zinger.

not that it will worry the entrenched mentality of ra peepul

it's quite frustrating that the bulk of AFC's debt stems from the days of spending to try and put out a side that could compete with the moonbeams era Rangers. OK, a lot of the money went on overpaid duds.

[Ken Fitlike]

It was way past his bed time (or the nurse had came round with the pills).

or a SWAT team came round with tasers

[dirty dingus]

What's funny is that these are the accounts at their fluffy best, after months and months of work at massaging them to be more acceptable to the Orc hordes. Not to worry though Fury is onto them, him and Patey will have them right as rain in no time. Chucky can then return with Agent Whyte and lock themselves in the broom cupboard and play the champions league tune as Seethe Co run out to give (insert some diddy part-time team here) a pasting.

Edited October 2, 2013 by dirty dingus

[dave.j]

Ok, i'll rephrase the question....

why was James easdale paid £29172 as a non exec director in the financial year up to the end of June?

When he wasn't appointed until July.

Has there been 1p shares available for the Easdale brothers to buy?

[strichener]

Not only was it scripted, it was delivered without any real conviction in what he was saying .. he also looked very shifty as he delivered certain key soundbites and answers.

Like the comment that the £11m in the bank only included £4m of season ticket money. Factually correct but also misleading as it includes a total of £8.156m of income received. This includes sponsorship, season ticket and hospitality etc.

[strichener]

The finance leases relate to funding of the refurbishment of the statium fast food outlets,

A standard fixed security has been granted over these assets.

First the fast food outlets, next the whole stadium. Deeds anyone?

[GreenockRover]

So Ally is still drawing full pay ...

Why "close to an agreement.." ?

Surely all they have to do is "..........put a contract in front of (him), I didn't need to read it, I thought - I'm signing that because it's what I want to do"

Stick him on 50k per annum then - job done

[GreenockRover]

Excuse me Sir Alex, have you seen the recent set of accounts issued by The Rangers International Football Club ?

They make for grim reading I'm afraid.....

As a famous Govan "old boy" with a soft spot for them, would you, possibly, consider becoming involved to help them out with your undeniable experience and maybe even some financial backing ?

[AberdeenBud]

from TSFM;

Re: accounts, after a better look this morning.

Firstly, still not convinced that the turnover doesn’t include some 2013/14 season ticket money, but for the purposes of this I’ll say it doesn’t.

I’m also going to ignore the profit and loss side of the accounts, as they are made kinda meaningless by things like ‘negative goodwill’.

Figures which are useful though:

Costs – 33m over 13 months. Add to this another 4m of non recuring costs such as IPO/player transfer fees etc.
Revenue – 8m season tickets, but 13.2m gate receipts. That means 5.2m over 18 games on walk in’s/hospitality, or 288k a game. (too high in my opinion)

Remember these numbers, we’ll come back to them.

Now we’ll move onto the balance sheet. First thing to do is ignore the fixed assets as they are meaningless figures plucked from thin air. Look instead at current assets and liabilities:

Assets:
Trade and other receivables 5,231k
Cash and bank balances 11,198k
Total 16,514k

Liabilities:
Trade and other payables 6,273k
Obligations under finance leases 694k
Deferred income 8,156k

Firstly, 11.2m in the bank on 1st of July.

Included within cash and bank balances is £946,000 relating to Rangers Retail Limited, which is not immediately available as working capital to the Group as a whole…

So really only 10.2m available to the club.

Now, trades. 5.2m is owed to RIFC by other companies. 2.4m of this is season tickets bought on installments, so there is cash to come in which takes the cash available to 15.3m.

Now, liabilities.
Trade is 6.2m. That means they owe 6.2m to other business… more than they are owed.
defered income, explained in note 19 as season ticket money. This is normal for a football club. We can argue all day long about whether this is included in the profit or loss account, but it is clear as day that it is included on the balance sheet. It is a liability as they have already sold these. As seen in the assets, they are still owed 2.4m from this 8m. Therefore, there is 5.6m outstanding – the only place in my opinion for this to be accounted for is in the cash balance.

So, 15.3m – 6.2m – 5.6m = 3.5m.

So, as of June 30 Rangers had only 3.5m to cover any losses for the season ahead. Seeing as they lost 14m (18m once you include the non recuring expenses) this means major cut backs.

Now, what revenue is coming in? Lets go back to the beginning – 5.2m over 18 games, or 288k a game. So maybe another 5-6m over the course of the season. More sponsorship? Doubt it, as it looks like its already included.

Then lets look at the 33m expenses, or 2.5m a month.

At 1st July they had 10.2m in cash. They owe 1m more in liabilities to trade then they will get, so net balance is really 9.2m.

They are spending 2.5m. Each month they receive 550k of match day income (based on 2 home games), so a net loss of 2m. 9.2/2 gives 4 1/2 months, or middle of November. Other income – maybe – lets be kind and give them 5m over 13 months like they claim, or another 380k/month, reducing net loss to 1.6m/month. 9.2/1.6 gives 5.75 months, or, end of December.

I don’t see any other way, and these accounts prove it. In early 2014 Rangers need a fresh injection of capital, or they have to take 1.5m off their monthly costs. Meanwhile, TRFC is 16.1 m in debt to the parent company RIFC and growing at probably 1.6m a month, so around 21m as of today.

RIFC will not go bust, but TRFC will either need to have a share issue, a billionaire benefactor, or cut costs to prevent admin.

[strichener]

from TSFM;

Re: accounts, after a better look this morning.

Firstly, still not convinced that the turnover doesn’t include some 2013/14 season ticket money, but for the purposes of this I’ll say it doesn’t.

I’m also going to ignore the profit and loss side of the accounts, as they are made kinda meaningless by things like ‘negative goodwill’.

Figures which are useful though:

Costs – 33m over 13 months. Add to this another 4m of non recuring costs such as IPO/player transfer fees etc.

Revenue – 8m season tickets, but 13.2m gate receipts. That means 5.2m over 18 games on walk in’s/hospitality, or 288k a game. (too high in my opinion)

Remember these numbers, we’ll come back to them.

Now we’ll move onto the balance sheet. First thing to do is ignore the fixed assets as they are meaningless figures plucked from thin air. Look instead at current assets and liabilities:

Assets:

Trade and other receivables 5,231k

Cash and bank balances 11,198k

Total 16,514k

Liabilities:

Trade and other payables 6,273k

Obligations under finance leases 694k

Deferred income 8,156k

Firstly, 11.2m in the bank on 1st of July.

Included within cash and bank balances is £946,000 relating to Rangers Retail Limited, which is not immediately available as working capital to the Group as a whole…

So really only 10.2m available to the club.

Now, trades. 5.2m is owed to RIFC by other companies. 2.4m of this is season tickets bought on installments, so there is cash to come in which takes the cash available to 15.3m.

Now, liabilities.

Trade is 6.2m. That means they owe 6.2m to other business… more than they are owed.

defered income, explained in note 19 as season ticket money. This is normal for a football club. We can argue all day long about whether this is included in the profit or loss account, but it is clear as day that it is included on the balance sheet. It is a liability as they have already sold these. As seen in the assets, they are still owed 2.4m from this 8m. Therefore, there is 5.6m outstanding – the only place in my opinion for this to be accounted for is in the cash balance.

So, 15.3m – 6.2m – 5.6m = 3.5m.

So, as of June 30 Rangers had only 3.5m to cover any losses for the season ahead. Seeing as they lost 14m (18m once you include the non recuring expenses) this means major cut backs.

Now, what revenue is coming in? Lets go back to the beginning – 5.2m over 18 games, or 288k a game. So maybe another 5-6m over the course of the season. More sponsorship? Doubt it, as it looks like its already included.

Then lets look at the 33m expenses, or 2.5m a month.

At 1st July they had 10.2m in cash. They owe 1m more in liabilities to trade then they will get, so net balance is really 9.2m.

They are spending 2.5m. Each month they receive 550k of match day income (based on 2 home games), so a net loss of 2m. 9.2/2 gives 4 1/2 months, or middle of November. Other income – maybe – lets be kind and give them 5m over 13 months like they claim, or another 380k/month, reducing net loss to 1.6m/month. 9.2/1.6 gives 5.75 months, or, end of December.

I don’t see any other way, and these accounts prove it. In early 2014 Rangers need a fresh injection of capital, or they have to take 1.5m off their monthly costs. Meanwhile, TRFC is 16.1 m in debt to the parent company RIFC and growing at probably 1.6m a month, so around 21m as of today.

RIFC will not go bust, but TRFC will either need to have a share issue, a billionaire benefactor, or cut costs to prevent admin.

This bit is wrong. The 5.6m in season ticket money that Rangers have already received, you cannot take it off available cash balances. This then makes the rest of the assumptions incorrect.

[thelegendthatis]

zinger after zinger.

not that it will worry the entrenched mentality of ra peepul

it's quite frustrating that the bulk of AFC's debt stems from the days of spending to try and put out a side that could compete with the moonbeams era Rangers. OK, a lot of the money went on overpaid duds.

Yes a lot of money did go on overpaid duds. One secret in running a business successfully is learning from your own mistakes and the mistakes of others.

Why then is Rangers still overpaying for duds?

Which takes you directly to the door of the boardroom. Have Mather and Stockbridge made the sensible decisions on controlling costs? I doubt that Jim McColl or Frank Blin think they have.

Are Mather and Stockbridge two of the overpaid duds?

[thelegendthatis]

This bit is wrong. The 5.6m in season ticket money that Rangers have already received, you cannot take it off available cash balances. This then makes the rest of the assumptions incorrect.

Of course we can go through the figures emanating from Ibrox and second guess what they mean. You can be sure the shifty brigade now in charge will be making sure things as obscure as they can possibly make them.

What gets me is what Mather and Stockbridge have been up to. They will know that any company has to run efficiently and that means controlling costs. And not overpaying for anything.

The starting point is salaries. Especially when they demand such a high percentage of overall running costs. Get a list with the highest paid at the top, the rest in descending order. Start at the top. Do we really need them? What contract are they on? Cost of punting them? Can we get someone to do the job for less? Then work your way down the list. Staff and players. Make decisions to let some go.

Especially before the AGM is important to show the board is willing to make these sort of decisions.

Then look at the other costs to see what can be reduced.

Increase sales? Including sponsorship. How do we do this? This is an ongoing job, not a one off.

Funny thing is, I see none of this happening. Why not?

It is as if they have closed their eyes, put a pillow over their heads hoping the bogey man of administration would go away.

He won't.

[strichener]

Of course we can go through the figures emanating from Ibrox and second guess what they mean. You can be sure the shifty brigade now in charge will be making sure things as obscure as they can possibly make them.

What gets me is what Mather and Stockbridge have been up to. They will know that any company has to run efficiently and that means controlling costs. And not overpaying for anything.

The starting point is salaries. Especially when they demand such a high percentage of overall running costs. Get a list with the highest paid at the top, the rest in descending order. Start at the top. Do we really need them? What contract are they on? Cost of punting them? Can we get someone to do the job for less? Then work your way down the list. Staff and players. Make decisions to let some go.

Especially before the AGM is important to show the board is willing to make these sort of decisions.

Then look at the other costs to see what can be reduced.

Increase sales? Including sponsorship. How do we do this? This is an ongoing job, not a one off.

Funny thing is, I see none of this happening. Why not?

It is as if they have closed their eyes, put a pillow over their heads hoping the bogey man of administration would go away.

He won't.

Not wanting to appear to be defending them but surely Sally and his staff being asked to take a pay cut is the start of this? They have also got the boardroom savings that will come from Green and the savings from Ahmed, this could be a couple of million right off. They have also saved costs by not spending any money on the Ibrox structural improvements (maybe they could have saved the money from the jumbotrons and wifi). Didn't they also dump 2 players that were on £1m a year each?

They also have Ian Black placing a little £10.2m wager for them at odds of 1/50 thinking that it will turn them into a half billion dollar business (£1 for each supporter)

[thehoss]

:lol: :lol: Daily Record comment

The gravy train isn't going to last!

What gravy train?!

[AberdeenBud]

RANGERS have released their annual accounts this week which will lead to deep scrutiny from all aspects of the media. While it may seem at times on Twitter and blogs that everyone and his granny is a financial and legal expert, I am sure this is not the case. This article is an attempt to simplify the information published and put it into more basic terms.

Firstly, the warning. Although people were saying “wait until the annual accounts are published – they will reveal everything”, that is not the case. The accounts disclose only what is required by the Companies Act and financial regulations. If I make any assumptions in trying to explain items, I will say so. It is possible that the accounts will raise more questions than they will answer.

What period do the accounts cover?

They cover the 13 month period from May 2012 to June 2013, the period since the assets and trade were acquired from the administrators of the old company.

What business(es) are included in the accounts?

The accounts show information for the holding company (Rangers International Football Club Plc) and for the group. As such, it includes the financial information for Rangers Football Club Ltd (which operates the club) and Garrion Security Services Ltd (formerly Rangers Security Services Ltd) which are both fully owned. Rangers also own 51% of Rangers Media Ltd but that company has not started to trade. I think it is safe to say that the security services side will be fairly minor and won’t impact much on the group accounts.

Layout of the Accounts

The accounts follow a traditional format – there is a lengthy Board report and Business Review, followed by the Auditors’ Report, then the main accounting statements – the Income Statement, Balance Sheet and Cash Flow Statement. These are followed by the Notes to the Accounts (page 28 on) which provide supporting information and required disclosures.

Consolidated Income Statement (Page 22)

This is more commonly known as the Profit and Loss Account and summaries the income and expenditure that relates to the period being reported on. As such any season ticket income for 2013/14 or other income which relates to future periods is not included.

The accounts show that Rangers generated £19.1 million in the year of which £13.2M came from gate receipts and hospitality. The remainder of the income came from sponsorship, advertising, retail sales, broadcasting, and other activities.

The operating expenses for the year totalled £33.7M. That total doesn’t include one-off expenditure that is not expected to recur in the future. It is made up of staff costs of £17.9M, general operating costs of £13.3M (covering the running costs of the business – everything from upkeep and maintenance, heat and light, telephones, etc). Back in June 2010, the general operating costs were £13.5M, so while this set of accounts is for a 13 month period, we could say that pro-rata, these charges have dropped by about 10% on the 2019/10 year.

We then have some other, separately categorised items. One is a credit to the account for the ‘release of negative goodwill’ of £20.4M. Basically, when the company purchased the assets from the administrators for £5.5M, the value of these assets was considered to be fairly stated at £27.2M, thereby producing an immediate gain of £20.4M.

Going the opposite way, further exceptional costs of £4.2M were incurred, including £2.7M in repaying the old company’s football debt, £599k on the investigation into Craig Whyte’s claims, plus costs incurred in the acquisition and in the IPO issue.

Along with some other items, the end result is a £1.192M surplus for the period. Eliminating the one-off non-recurring income and expenses though, there was a loss for the period of £15M.

Consolidated Balance Sheet (page 24)

The balance sheet summarises the position at the year-end date (30 June 2013). It is split into sections: Fixed Assets (the property, equipment, the brand and the player registrations), Current Assets (the trade assets such as stock, debtors and cash), Current Liabilities (amounts to be paid or income to be earned in the next year), and Non-Current Liabilities (the portion of liabilities that will require to be paid in more than a year’s time).

The fixed assets are stated at £65M. Within this figure, the properties were included at a revalued amount of £42.5M, the equipment at a cost (less depreciation) of £4M, the player contracts (signing-on fees, agents fees, etc, which are written off annually over the period of the contract) £2.4M and the Brand itself has been valued at £16.1M.

The current assets of £16.5M include £11.2M in the bank and £5.2M in debtors. Of that £5.2M, £2.4M relates to money to be collected from season tickets for 2013/14 which were sold up to 30 June.

The Current Liabilities figure of £15.1M is slightly misleading as it includes £8.1M of income which has been earned in advance. From information elsewhere in the accounts, it would appear that £6.9M of this is season ticket renewals, the rest sponsorship, advertising etc in advance. The remaining liabilities are a mix of creditors and finance leases, with £1.8M due to HMRC re PAYE and VAT at the year-end date.

So, at 30 June, £6.9M of season tickets had been sold, £2.4M was to be collected under payment plans, and £4.5M had been received in cash and formed part of the £11.2M cash balance.

The Non Current Liabilities of £9.3M look to include £950k of finance lease payments in relation to the refurbishment of the food outlets, £315k in payments to terminate player contracts, and £7.8M in future tax liabilities that may emerge (but only if properties are disposed of at their revalued amounts).

Overall, the balance sheet shows that Rangers had net assets of £57M of which £11.2M was in cash.

Consolidated Statement of Cash Flows (page 27)

So where has the cash gone? Firstly, the revenue generated in the year from day-to-day operations wasn’t enough to meet the day-to-day costs and the cash needed to fund this shortfall was £7.6M.
In addition to the operating revenue coming in through the business, £29.79M was received in cash from the proceeds of shares, both initially and through the later IPO issue. A further £1.05M was received from the sale of player contracts. That’s a total of £30.84M.

That money has been used up as follows:
To fund the day-to-day operational cash shortfall £7.56M
To acquire the assets from the administrators £6.75M
To purchase property and equipment £3.27M
To purchase players’ contracts £1.33M
To make finance lease payments £0.5M
Interest charges incurred £0.23M

That leaves the balance of £11.2M in the bank.

That is a shortened summary of the main financial statements in the accounts, but what else is of interest in the accounts?

Auditors’ Report (page 20)

The auditors have issued an unqualified audit report. That means that, among other things, they are satisfied that the accounts give a true and fair view and they have also satisfied themselves that the projections that they have seen are robust enough for them to agree that the company remains a going concern for the next 12 months. That is 12 months from the date of signing the audit report (not 12 months from the year-end).

They have referred to a potential liability arising from legal claims made by Craig Whyte and Aidan Earley, stating that the outcome of these claims cannot be determined at this stage.

Auditors Fees

The auditors have charged £90,000 for the audit of the group but have also charged £594,000 or other work in respect of the flotation, investigation and tax advice.

Staff Costs

Staff costs in the 13 months were £17.9 million, with Brian Stockbridge stating in his report that First Team players’ wages were £7.8M. He also states that the First Team wages/Turnover ratio was 43% which would make the wages £8.2M. It is unclear how many players out of the playing staff of 50 are considered to be first team players. However, if I assume a First Team squad of 25 and 13 months’ wages of £7.8M, then the average weekly salary works out at £5,500.

Directors Remuneration

Directors received £1.6M in the 13 months. That included £933K for Charles Green and £409K for Brian Stockbridge. Craig Mather’s appointment was late in the year (30 April) so his salary of £58,557 would be for 2 months (equivalent to an annual salary of £351,342).

As a comparison, the Celtic accounts showed the Celtic directors receiving £1.4M for the 2011/12 year. Their main director, Peter Lawwell, earned £999K with Eric Riley, finance director, earning £221K.

Remuneration of key management for Rangers is shown, with Imran Ahmad earning £303K while at the club and Ally McCoist earning £826K. Ahmad also received a £50K arrangement fee on a £200K loan he provided to the club in May 2012.

IPO Money

Much has been written about the funds raised through the IPO share issue. It is impossible to isolate this item, but the way the money has been used is detailed in the Cash Flow notes above.

Other items

There are other items within the accounts that merit a mention. £5.7M of costs have been written off against the Share Premium account (note 23) with the narrative ‘Costs incurred in relation to fundraising’ but it is unclear how this significant figure has been incurred.

Comparison with Interim Figures

Rangers previously released interim figures for the 7 months to 31 December 2012. These figures showed revenue of £9.5M and operating expenses of £16.6M. We can therefore identify that in the final 6 months, Rangers’ revenue was £9.6M and the operating expenses were £17.1M. There can obviously be factors affecting this, but it contradicts the explanations that costs are being reduced and brought under control.

This has been a summary of the position reflected in the accounts. I will leave it to others to draw their conclusions on the strength of the financial position. For my own part, I would hesitate to comment without seeing the projections for future trading which will, of course, not be made public.

Arnold Black is a Chartered Accountant and lifelong Rangers fan.

Edited October 2, 2013 by AberdeenBud