£3.5m of the £18m down payment has been included in profits this year, presumably to offset the closure costs of £3.8m. That leaves £14.5m to be taken over the next 9 years. The closure costs do not appear in the cash flow statement and so they presumably still need to be paid.
We appear to have been a net buyer in the transfer market. £4m for purchases of “intangible assets” and £1.5m of sales. Those sold must have been in the books for around £0.5m to produce a profit of £1.0m.
And we may have more to spend. The finance director says "This reflects a strong balance sheet with the ability to direct appropriate funds to enhance the playing squad as the board determines" So we may spend more before the month is out.
Under £6m of debt for a company with turnover of £50m+ is very comfortable. The problems of the early years this century were produced by having a wage bill, which bore no relationship to the revenue line. “Aligning our costs with income is key and this will require careful management and sound financial planning”, says Martin Bain. Pity this lesson (from page one of an Idiot's guide to running a business) was not learned a few years ago!
Much is made of wages being 50% of revenues compared with 58.8% in the English Premiership. Given their guaranteed Sky TV money, this is not really a comparison and it was also the year where revenues were boosted by an appearance in the last 16 of the Champions' League. Let's see how it looks this season. And how much of the £9m (up from £7m) Contributions to Employee Trusts finds its way to the Murray Group Management Ltd Remuneration Trust? I think we should be told.
So how will we mange without the Champions' League money – ticket revenue up by £1m on the year and advertising/sponsorship etc up by £7m? Well for starters, 600 new seats at £900 each in Bar72 will raise over £5m (guaranteed for three years), hopefully the UEFA cup will provide some income, and don't forget that last season saw us make no visits to Hampden for Finals or Semis. In case anyone had forgotten – last season was crap domestically.
And what of Mr Bain's £527,000 salary last year? Value for money? Ian Marchant, Chief Executive of utility business Scottish and Southern Energy, made over £1m last year (basic of £615,000 plus performance bonuses). We've got a bargain then, except his business employs over 12,000 staff (less than 400 at Rangers with retail leaving), it made a pretax profit of £850m (versus our £92,000) and his company is capitalized on the stock market at over £10billion (against £65m for RFC). Brian Soutar who runs Stagecoach got a basic of £499,000 – rising to over £900,000 with performance related bonuses. His company made over £100m. I could come up with other Scottish comparisons, but I think you'd struggle find one which suggests Martin is a bargain!
Brock Stoker