Football finance expert Neil Patey believes that Rangers will be out of money before they are even back in the Scottish Premiership.
Patey, a partner at Ernst & Young, has pored over the accounts – revealed on Tuesday – that show a £14.4 million operating loss for the year ending 30 June.
The £22.2m that was raised in last December’s share issue (IPO) ensured the club still had £11m in the bank but Patey, who believes the Ibrox outfit haemorrhaged £600,000 a month last season, does not think that will get the League One side that far.
Patey said: “It will be a fine line on whether they have positive cash in the bank by the time they do potentially get back to the top flight. Without having a crystal ball, if you look at the operating cash outflow for the 13 months it was £7.5m and I’m ignoring the one-off items like buying the club and investing in some infrastructure.
“The pure operating cash was £7.5m, which is roughly £600,000 per month outflow. If you divide that by £11m of cash in the bank, that gets you broadly through half of next season.
“Could you eke it out a bit longer? Yes, they might improve cash flow because of the revenue and costs actions but it seems like it could be a challenge for them to make that cash last until they get back to the Premiership.
“I think there has to be at least the possibility that at some point during next season, they will have to raise additional external funds and that will be both just to see them through the season, if they do indeed run out, but also, if they get back to the Scottish Premiership, I’m sure they will want to make further investment in squad and other things.
“It kind of feels like the IPO fund gets them in striking distance of the Premiership but then they will need another injection of funds, I believe.”
Patey insists the account figures are no great surprise given the size of club and their determination to get back to the top tier of Scottish football as quickly as possible.
He added: “People say ‘how are they losing so much?’ It’s a difficult trade-off for the club in that they’re a very large club and it obviously costs a lot of money to run.
“They also have aspirations to get back to the Scottish Premiership so you don’t run it as a third-division side, they’re running it to get back to the Premiership.
“That does not have to mean you run the full cost base of an actual Scottish Premiership team but you have to be on the trajectory that you’re building up.
“It is inevitable that they will be running at a fairly significant loss until such point that they get back into the top flight.
“I can see this trend continuing until they get back to the top league. I would imagine and I’m sure the board are doing everything they can to reduce the level of loss year-on-year.”