The devil is in the retail

Ah these accounts

It is almost as if Philip Nash had not been on a messianic cost cutting drive this last year.

However it really happened.

He clamped down on the living off the tab and the expense culture at Ibrox and Murray Park.

However, despite all of that sweat and harsh words the cost base actually increased by £150,000!

I got two of my number crunching guys to go over these accounts for me.

They both independently of one another told me that the reason for this increase, despite the austerity, was the ‘Onerous Contracts’.

It fits the evidence of what we already know of these wheezes artfully constructed by Charles of Normandy and his minions.

The only people making money out of RIFC are the beneficiaries of the ‘Onerous Contracts’ and that includes Mr Ashley.

The merchandising deal is a joy to behold and the devil truly is in the retail.

RIFC had to pay £411,000 under their obligation to purchase stock at cost higher than resale value through Rangers Retail Ltd.

Sorry, but that is just brilliant business for both Big Mike and Puma.

Charles of Normandy was desperate to get a big name kit supplier on-board when he was setting up Sevco.

In order to get the German outfit providing apparel for the Bearmacht Charlie had to offer them guaranteed sales that were off the radar.

In this deal neither Puma nor Sports Direct can lose.

It is undeniable that RIFC is in stormy financial waters and there are now mines bobbing on the surface that could do for the good ship Sevco.

Firstly the dis-application of pre-emption rights needs to go through.

If that is blocked by some angry shareholders then that is a big problem.

Secondly the rights issue needs to be a major success because that £8m is badly needed.

One minor problem is that it will cost money to put a prospectus together. That is why they last Shareholder Share Option was for less than €4m as that was below the threshold for such an expensively constructed document.

The third explosive device floating dangerously towards the badly riveted hull is actually about football.

If the mighty Glasgow Sevco does not gain promotion then that will represent a massive loss of expected revenue.

The only silver lining in no silverware is that the ‘Onerous Contracts’ will not ratchet up to Premiership levels of remuneration for Charlie and the boys.

One of my number crunching pals told me that, on currently available figures, even if they get the full £8m then they will still lose around £15m next year.

This is because of the increase in the ‘Onerous Contracts’ and the strong possibility of a decrease in Season Ticket sales.

Many of The People have simply had enough of this circus.

There is also the small matter of Mr Ashley being repaid £3m in April 2015

Strangely the Chairman David Somers sought to include as a highlight things that had happened after the 30th June.

These accounts, according to my guys, are screaming that Charles of Normandy is still doing very well out of the Ibrox match day experience.

The Going Concern Warning was written in standard auditor style and should come as no surprise to regular readers.


“In forming our opinion on the financial statements, which is not modified, we have considered the adequacy of the disclosures in note 1 to the financial statements concerning the Group’s ability to continue as a going concern. The Group requires additional funding to continue to meet its liabilities as they fall due. The Group has made key assumptions in relation to its ability to secure further funding in addition to the timing and value of season ticket income, increases in matchday income and sponsorship, the timing and value of dividends and further cost reductions.

“These conditions around the need to secure further funding, along with the details provided in note 1 of the financial statements, indicate the existence of a material uncertainty which may cast significant doubt over the Group’s ability to continue as a going concern and therefore that the Group may be unable to realise its assets and discharge its liabilities in the normal course of business. The financial statements do not include the adjustments that would result if the Group was unable to continue as a going concern.”

Only the seriously deluded amongst The People could now deny that this club/company/celestial entity is in serious financial trouble.

The AGM should be interesting and no doubt The People will deport themselves with all available dignity.

It takes place on the 22nd December and that is one week from payday.

As it currently stands my sources tell me that there is not enough cash to make payroll next month.

It would be a good time for Mr Ashley to put Sevco on  special offer.

I would not discount that possibility.


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