As widely expected, the club from Ibrox have used the Friday evening slot to publish their annual accounts revealing a loss of £11.3m despite increasing turnover by £20m on the back of the Gerrard Revolution.
Turnover includes various factors including £1.6m from a share issue and £14.3m from seven matches in the Europa League.
With combined losses of £25.6m over two seasons the company is clearly miles outside UEFA’s Financial Fair Play rules but that is unlikely to be flagged up by the SFA or any of the SPFL clubs that live within their means but are denied the opportunity to play in the Europa League qualifiers.
Steven Gerrard has already gone on record to say that his squad will need to be cut during the January transfer window despite pay outs made to Kyle Lafferty, Graham Dorrans and Joe Dodoo during the summer transfer window.
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The report makes no allowance for the ‘many millions of pounds’ that will have to be paid to Sports Direct in January with auditors Campbell Dallas (page 20) issuing a grim warning relating to the company as a going concern.
We draw attention to information in note 1 in the financial statements concerning the Group’s ability to continue as a going concern. In order to continue operations for the next 12 months the Group is dependent upon raising additional finance to cover projected cash shortfalls in season 2019/20. The precise level of funding required is uncertain as it is inherently dependent on a number of key variables, including the achievement of forecast football performance and player trading. As stated in note 1 the risk that key cash flows are not achieved as forecast , along with the absence of a binding debt facility for any shortfalls, indicate that a material uncertainty exists that may cast significant doubt on the Group’s ability to continue as a going concern.
Under the responsibilities of Directors the report adds:
In preparing the financial statements, the Directors are responsible for assessing the Group and Parent Company’s ability to continue as a going concern, disclosing, as applicable, matters related to going concern and using the going concern basis of accounting unless the Directors either intend to liquidate the company or to cease operations, or have no realistic alternative but to do so.
Since the end date of the accounts Filip Helander and Ryan Kent have been purchased for fees reported to be £3m and £7m. Former Director of Football Mark Allen did raise £200,000 from the sale of Daniel Candeias.
There is no Financial Fair Play rules in Scottish football despite the loss of Clydebank, Gretna and Rangers in recent years.
CLICK HERE for the full annual report to 30 June 2019.
