RANGERS International Football Club PLC Annual Report & Accounts and Notice Of 2021 AGM.
The year to 30 June 2021 was undoubtedly and heavily affected by the COVID-19 pandemic.
The associated negative impact on revenue (both matchday and non-matchday) was in excess of £20m, resulting in a reduction in profitability of more than £10m.
When the current Board and investors wrestled back control of our Club in 2015, it saw before it a 10-year recovery project. Today, we consider that prognosis to be accurate.
Painstakingly and with unerring resolve, your Board and executive management team have undertaken the rebuilding process. Sticking to the task has been no mean feat and has been made possible with the support of our loyal investors and fans.
Despite the manifold challenges, our football club has relentlessly strode forward. On the field of play, winning our 55th League title provided a significant milestone in this process and was the crowning achievement of our year.
Off the pitch, notwithstanding a COVID impacted financial performance, we believe that demonstrable progress is evident from our results and activity subsequent to the reporting date of 30th June which should also be considered to fully appreciate our advancement.
In an extremely challenging economic environment, we have continued to:
GROW OUR KEY REVENUE PILLARS through strengthening existing and forming new commercial partnerships.
INVEST IN OUR PLAYING SQUAD with this set of accounts showing a further £17m invested in the First Team squad over the period with additional spend since the year end.
INVEST IN OUR FACILITIES with £5m spent in relation to construction and improvement works around the Stadium and Training Centre during the reporting year (including the New Edmiston House project).
STRENGTHEN OUR CAPITAL AND FUNDING STRUCTURE
During the course of the year, the Club was approached with a number of investment proposals, notably from the private equity and family office sphere. We are extremely fortunate to have an investor group that is able and willing to match or better the indicative terms from such groups whilst retaining the ownership in the hands of dedicated Rangers supporters.
Thus, the Club has secured a formal, long term, loan facility which represents a key milestone in our progress towards a normalised capital structure.
This has been progressed further since 30th June with additional investment from our investor base to support the funding needs of the Club, including the repayment of Dave King’s £5m loan plus interest of £832k on that loan.
Replacing this high interest, short-term borrowing with a long term, lower coupon structured facility provides significant benefit for the Club.
Complementing the above we are also delighted to have concluded a bank term loan facility which represents our first such facility with a major UK high street lender since the regime change in 2015.
Thus, we have significantly enhanced both debt and equity structures, including conversion of over £26m of shareholder loans to equity and supplemented by our successful Tifosy share issue.
In summary, clear and decisive steps have been taken to simplify, strengthen and normalise our financial structure as we drive the business toward a sustainable model.
In this context it is important to note that the commitment and investment of your Board and its loyal and aligned investors has enabled a significant reduction in the Company’s identified future funding requirement. This figure, which includes the expected cost to complete capital projects, now stands at £7.5m for the coming 21/22 season and only £0.4m in the following season.
While still a substantial sum, the remaining requirement demonstrates the very significant progress made given that the funding requirement identified in last year’s accounts was more than £23m over the subsequent two seasons. Pivotal to this reduction has been the commitment of our current group of investors to provide funding to settle the considerable player transfer liabilities built up in the early years of the recovery period.
Your Board remains steadfast and committed to its support in meeting this funding requirement. Much work remains to be done as we close in on improving our business model: a model that must be fit for this football club, sustainably so, to provide solid foundations as we complete our recovery programme and build a path of maintainable growth.