I don’t suppose he meant it, but David Murray is right when he talks about “historic debt”. If he’s trying to consign it to the past, then he should have called it historical; historic should be used for something famous or outstanding. Our debt is certainly famous (notorious even), and if you included the Bonds and the Premium TV money, the total debt would be £97.4m.
To talk of last season as any sort of success ignores the fact that most of the improvement is temporary. Champions’ League income has gone for this season, selling Arteta was not as lucrative as last season’s trio, and the impact of £5m off the wage bill is there for all to see on the park.
Looking at the wage bill there are a number of points worth making. T
he main item (wages and salaries) fell from £25m to £20.5m, but the “contributions to employee trusts” continues to rise, up from £6.8m to 7.3m. This item first appeared at £1m in the 2001 accounts and has been rising steadily. Two trusts benefit – the Rangers Employee Benefit Trust and the Murray Group Management Ltd Remuneration Trust. Who gets this money – now 25% of the wage bill – and why? We should be told.
Wages were down, but directors’ costs went up by 30% to £789,000. Now we have two more directors but I don’t suppose that Messrs Greig and Johnston take in £170,000 between them. In fact the highest paid director (presumably John McClelland as David Murray doesn’t take a penny out) got a nice £61,000 pay rise to £289,000. And for good measure the auditors saw their fees go up by 12%. It truly is tough at the top.
Some of the statements are bizarre to say the least. Top in the Basil Fawlty blinding glimpse of the bleeding obvious category is “Our media revenues remain low in comparison with the revenues achieved in the FA Premier League”. Yes, and a Skoda continues to sell for less than a BMW. “Applications for employment by disabled persons are always fully considered”. Well we all knew that one given our record of signing crocks.
“Budgetary control is a key ingredient within any successful business, and in that connection Rangers is no different”. Pity this business maxim went out the window over the past few years.
“The promise of media revenues that did not materialise”. Who promised what? Short of the Old Firm joining the English Premiership, media revenue was always going to be low in Scotland. Who promised entry to the Premiership? Or did Dick Advocaat promise to bring home the Champions’ League and all the media revenue that this would have brought?
On the asset front, the player pool is now in the books for £1.5m, so in future the charge for writing this down will be less. But this affects profits and not cash flow. The fact that debt went up by a similar amount to the losses is almost coincidental. Last year the loss was £30m but debt rose by around half of that amount. Companies can make a profit but still see debt go up, or record a loss and reduce debt.
This was another good season for Murray Group companies which sold services worth £4.3m to RFC. This represented over 10% of the turnover of Murray International Holdings excluding metals, property and mining. I still find it amazing that a group which generates 85% of its turnover in metals, property and mining, is chosen by Rangers to provide catering, call centres, mail order, information technology and travel. In addition £288,000 interest was paid on the revolving credit facility.
Along with my report and accounts, I received notification that I was not one of the lucky winners in the Shareholders’ Prize Draw. Shame! A company that looks like being a lucky winner is Premier Property Group Ltd. PPG which bought the Albion Car Park from Rangers is now going to sell it back so that we can build a casino on it. I wonder if the price of the land has gone up over the time that PPG owned the property? Will they make a profit? Presumably not, since “PPG is a person connected with David E Murray, the Chairman and a Director of Rangers” and he ‘never personally takes a penny out of the club.’
As is always the case, when a set of report and accounts comes out it tells you more about the past than the future. This is the financial story of last season, and a snap shot of what the financial position was at the end of June. All of this has been superseded by the announcement of the Rights Issue and David Murray’s intention to clear the rest of the debt – which will be at least £17m. Until we see how this is going to happen the financial position of Rangers FC plc is unable to provide much comfort to those of us hoping to see something better on the pitch.
The AGM is to be held this year at Ibrox rather than the SECC – cost cutting I hope.
BROCK STOKER