Fears for the future at Ibrox as chairman David Somers admits:

[ian1964 10,761]

There are real doubts about Rangers' ability to continue as a going concern

 

THE chairman issued the dire warning, which he claims is a direct result of fan proposals to drip-feed season-ticket money to the club via a trust fund.

 

 

 

RANGERS chairman David Somers has admitted that "material uncertainty" over season ticket income may cast doubt about the club's ability to continue as a going concern, as the Ibrox outfit announced its cash reserves fell by more than £17.5million last year.

 

Rangers announced a loss of £3.7million in the seven months up to the end of 2013, an improvement of 50 per cent on the same period 12 months earlier.

 

But they had just £3.5million cash on December 31, despite bringing in £22million in an initial public offering (IPO) share issue just over a year earlier.

 

The main Rangers supporters' groups recently raised the possibility of drip-feeding season-ticket money to the club via a trust fund amid continuing distrust over the board's ability and intentions.

 

And the club, who recently arranged loans totalling £1.5million from two shareholders, admits that casts a shadow over the club's immediate future.

 

In the interim report, Somers said: "This possibility results in the existence of a material uncertainty which may cast doubt about Rangers' ability to continue as a going concern and therefore that the company may be unable to realise its assets and discharge its liabilities in the normal course of business.

 

"Nevertheless, after making the appropriate enquiries and considering the uncertainties referred to above, the directors have concluded that there is a reasonable expectation that the company has adequate resources to continue in operational existence for the foreseeable future. Accordingly, the directors continue to adopt the going concern basis in preparing the interim results."

 

Earlier this month, the Union of Fans, which incorporates all of the main Rangers supporters' groups, urged fans to put season ticket money into a trust, from which it would only be released to the club when assurances were met, including security over Ibrox and the Murray Park training ground.

 

The club's independent auditor, Deloitte, stated the uncertainty might cast "significant" doubt over the club's ability to continue as a going concern.

 

The club have made assumptions including that they "modestly" increase their season-ticket numbers, which stood at 36,000 in League One, next season and beyond.

 

The improvement in financial performance is in large part down to increased retail sales with the club reporting its partnership with Sports Direct was worth £4.8million in the seven months, up from £900,000.

 

Revenue was up 38 per cent to £13.2million, however operating expenses also increased slightly to £16.8million.

 

Staff costs were down £800,000 to £7.5million but the club pointed out that £500,000 was spent on severance payments.

 

Somers and chief executive Graham Wallace came in towards the end of the period and the latter is conducting a 120-day review of the business, and they explained some of the spending that meant cash reserves fell from £21.2million in a year.

 

Somers said: "The majority of the money raised from the IPO in December 2012 had been spent by June 2013 on IPO related fees and commissions, severance payments, the purchases of the Albion car park and Edmiston House and to fund ongoing operating losses.

 

"The club incurred a further £7.7m of cash expenditure in the six months to 31 December 2013, funding additional fixed asset purchases and operating losses. In total the club has spent over £4m on fixed assets since the IPO that are not yet generating incremental revenue."

 

Somers admitted operating costs had been unsustainable.

 

http://www.dailyrecord.co.uk/sport/football/football-news/fears-future-ibrox-chairman-david-3290753

[bluebear54 0]

Such is my faith in Somers that I wouldn't trust him to successfully point me in the right direction to a piss-house in the Govan.

Economic forecasting would appear to be well beyond his capabilities, as would be scaremongering.

Lets leave his salary package for another debate.

[Blue Moon 1,344]

Another misleading headline.

[bluebear54 0]

Another misleading headline.

 

Agreed. You would think the Yahoos are getting edgy as we take a couple of steps closer to knocking them out of their Cuckoo's Nest

[Super Cooper 0]

Is this clown talking about shutting our doors for good?

[Blue Moon 1,344]

No he is spreading alarm.

[bluebear54 0]

Is this clown talking about shutting our doors for good?

Nope The headmaster's threatening you with a damned good caning for not doing what he says and handing over all your pocket money, no questions asked.

What the last couple of years should have shown is that our "doors" can never be shut

35,000 season tickets and the away crowds are testament to that.

We will always live on.

[the gunslinger 3,366]

Just proves how much power the fans have at season ticket time.

 

We can have anything we want in return for our ticket money.

[BrahimHemdani 1]

Whatever one thinks of Mr Summers these comments are highly significant;

 

In implementing a professional basis for managing the Club, it remains a significant concern that external comment and ill-informed opinion continues to create uncertainty with regard to future income and cash flows. In particular, recent public comments suggesting season ticket holders divert payment away from the Club has caused a level of uncertainty over the timing and quantum of season ticket cash flowing into the Club, which as with many other football clubs, is Rangers' primary source of income. If this were to happen then there would be a negative impact on short-term cash balances and it is possible that the Club may need to seek alternative additional short term financing. This clearly would not be in the best interests of Rangers and would likely have a significant impact on our ability to progress the development of the Club in the planned manner.

 

 

 

This possibility results in the existence of a material uncertainty which may cast doubt about Rangers' ability to continue as a going concern and therefore that the Company may be unable to realise its assets and discharge its liabilities in the normal course of business. Nevertheless, after making the appropriate enquiries and considering the uncertainties referred to above, the directors have concluded that there is a reasonable expectation that the Company has adequate resources to continue in operational existence for the foreseeable future. Accordingly, the directors continue to adopt the going concern basis in preparing the Interim results.

 

 

 

Since the founding of the Club in 1872, supporters have, year after year, provided the working capital of the Club through ticket sales. Also providing capital were private individuals who subscribed for shares throughout the life of the Club. This model broke down when Rangers entered administration. The Club could only continue to survive and play football with the help of Rangers supporters and those who subscribed for shares at the IPO in December 2012. Many of those shareholders are fans and lifelong supporters. However, the bulk of the funds came from institutional investors. Both groups are stakeholders in the Company and must work together to help rebuild Rangers and ensure it has a successful, stable and sustainable future.

[BrahimHemdani 1]

Just proves how much power the fans have at season ticket time.

 

We can have anything we want in return for our ticket money.

 

With power comes responsibility; that responsibility must be taken very seriously in the light of the material uncertainty which the action referred to creates.