THE full effect of Rangers' share rights issue was revealed yesterday when the club's annual accounts showed a huge reduction in their net debt from a crippling £73.9million to a more manageable £23.1million.
The figure still leaves Ibrox chairman David Murray with considerable work to do if he is to fulfil his intention of eradicating Rangers' debt completely but does place the Scottish champions on a more sound footing after several years of financial crisis.
Rangers raised just over 51.4million from the rights issue, which was underwritten to the tune of 50.2million by Murray who returned as chairman in September last year after a two-year hiatus from the position, and it has at least succeeded in stabilising a situation which was threatening to get out of control.
"The results reflect an excellent performance from all of the business operations of the club," said Murray. "Football business has moved much closer towards a sustainable cost base for the long term."
The accounts do show a 2million drop in turnover to 55.1million on the previous year, largely attributable to Rangers' failure to qualify for the group stage of the Champions League last season, but the club's operating loss was reduced by almost 3million to 7.8million.
Rangers also report a profit on ordinary activities before tax of 12.4million, compared to a 5.9million loss 12 months earlier. This is mainly due to an exceptional gain in the accounts of 15million as a result of buying back shares in the club's subsidiary company Rangers Media Investments Ltd, which were issued in June 2000 for 15million, for a nominal sum of 1.
Murray stressed the need for Rangers to establish a consistent presence in the latter stages of the Champions League if the club are to continue to improve their balance sheet.
"Continuation of the progress made last year both on and off the park is our aim," said Murray. "I am delighted we have safely qualified for the group stage of the Champions League. Participation in the UEFA Cup group stage [last season] was welcome, but does not provide the club with the same level of income as the Champions League can guarantee. Regular and prolonged European football is a key target for everyone at the club, as this has the twin impact of improving financial performance and meeting the sporting aspirations we have for our club."