Accounts Say Rangers Shares Worth 6 pence
Today Rangers announced their results to the end of June 2002, but all will not be revealed until we see a copy of the annual report which gets sent out to shareholders over the week-end. All we have today is a summary and therefore what follows includes a fair amount of guesswork some educated, some less so.
Trading Losses Rises by £11m
This is a result of two things, turnover down by £2m largely UEFA Cup vs Champions¹ League and operating expenses up by £9m. Expenses include the £1.4m written off on Northern Spirit, but last year 60% of operating expenses was the wage bill. It looks like the wage bill has risen by £5m or around £100,000 a week. The stated trading loss is £19m up from £8m.
Operating Losses Double
Charge for player registrations which nets off transfer fees paid and received, and writes the value of players down as another year of their contracts go has risen by £4m to £12.8m. This appears to be explained by changes in accounting standards, but in a year when we got the cash for Gio, Abertz, Tugay, Reyna and Miller and spent much less, I would have thought this number would be lower.
As a result ³Intangible Assets² 95% of which was the value of players last year has fallen from £40m to £26m. On the upside this means that the charge will need to be lower next year. Two more years of writing the player pool down by £12.8m wouldn¹t leave a lot!
What about the Debt?
>From the information available I can¹t say for certain but here¹s a
>guess or
two. Last year¹s net debt was £51.7m. Part of this will come in ³Net Current Liabilities² which rose by almost £7m, and some in ³Amounts falling due after one year² which rose by almost £4m. With no change in the Rangers Bond or the NTL loans, this would seem to indicate debt of around £60m.
Actual numbers will be in the Annual Report.
Disaster or Not?
Revenue this season will be boosted by sales of Orange (sorry Tangerine) shirts as well as the new home top. TV revenues will be down and Europe is anybody¹s guess. The wage bill will definitely be down, but to turn in an operating profit on last year¹s turnover would need costs to come down by nearly £20m more than half the current staff costs. Unless we become a selling club, then there will always be some charge for player registrations and so a trading profit is some way off and an operating profit even further away unless we move to a league where someone will pay decent money to televise it.
Book Value of the shares falls to 6p
For the accounting anoraks among us an item worth looking at is Shareholders Funds. Last year it was stated at £38.9m but this has been increased to £47.4m by including the Rangers Bond something not deemed appropriate in the past. This year¹s shareholders funds are stated at £12.1m but on last year¹s treatment this would only have been £3.5m to give a book value per share of 6 pence! Even assuming the new £12.1m number is correct still only adds up to 21 pence per share.
Do the Accounts Matter?
With most of the debt long term, the cash flow problems being addressed and a supportive majority shareholder, Rangers are not under any immediate threat of insolvency. However, like everyone else the imbalance between money in and money out must be sorted and this has already been addressed.
If only we could get shot of our part-time Director of Football.
Brock Stoker