The extent of the financial crisis at Sevco has forced ‘finance guru’ Neil Patey to voice his concern about the future of the club.
Yesterday’s interim accounts, unqualified, carried the ominous warning from Deloitte that there were significant doubt about the new club as a going concern.
Predictably the focus since the results were published has been on the impact of a season ticket boycott, ignoring the fact that in their current condition the clock is ticking down rapidly on the club going into administration due to the massive gap between outgoings and income.
Patey, a partner at Ernst & Young, has been the favoured financial voice on all matters Ibrox over the last few years, regularly appearing on BBC and STV and often at the same time!
Throughout Craig Whyte’s tenure he could be relied on to apply soothing upbeat spin on whatever results were being announced, predicting that the club would come out of administration and that HMRC would accept a CVA.
Despite calling those scenarios spectacularly wrong he has remained a regular sounding board- talking up the £22m share issue and the plans of Charles Green to create a power house in world football with commercial income flooding in from around the globe.
Yesterday’s figures and going concern warning have caused a stir with even Patey appreciating that the club is in serious trouble although he stopped short of discussing administration and liquidation.
“The warning in the accounts report appears to be genuine,” he told The Herald. “Deloitte wouldn’t scaremonger, they just do their job. They have raised the fact their is a material uncertainty because they think the fans season-ticket trust plan will have a serious impact.
“Scottish clubs especially rely on on ticket sales and if they don’t receive that money then there is a serious short-fall of cash.
“Now we’re not sure if the fans’ plan will put the club on life support just yet but it could have serious financial consequences if the club don’t get the money though.”
Deloitte’s warning of serious concern made no reference to a proposed boycott of season tickets by the Fans Umbrella Division- it was made on the boards projection of increased income from season tickets.
Having started the year with £21.2m and ended it with £3.5m the scale of losses is obvious, as was the need for an emergency loan to meet the February payroll.
With little in the way of proper analysis and the reassuring voice of Patey and others providing reassuring soundbites the demise of Sevco seems as assured as the liquidation of Rangers.
Only the timing and precise reason for administration is up for debate- once it happens, and despite all the evidence to the contrary there will be no shortage of experts willing to explain why the next club out of Ibrox has such a glorious future having learned the lessons from the two clubs that died from spending way outside of it’s income.