Rangers progress in cup – but SPL glory key to club's financial future

• Nacho Novo evades a tackle from Chris Innes on a night when Rangers sealed a narrow 1-0 win over St Mirren in the Scottish Cup. Picture: SNS

Speaking as Rangers published half-yearly accounts which reveal an operating profit of 13.1 million for the six months to 31 December 2009, Johnston admitted the value of Champions League qualification cannot be overstated in addressing the prospects of reducing his club's 31million debt and attracting new ownership and investment.

The Scottish champions' interim figures also showed a turnover of 37.8million, directly attributable to their participation in the group stage of European football's elite club competition this season. Twelve months earlier, on the back of elimination from the Champions League in the second qualifying round by Lithuanian side Kaunas, Rangers posted a loss of almost 9million and turnover of just 20.1million.

• Match report: Rangers 1 - 0 St Mirren

• Ally McCoist pays cheeky tribute to Kris Boyd's finishing

The contrast is startling and illuminates Rangers' need to retain their domestic title this season. With Scotland's Uefa co-efficient ranking in freefall, it is likely to be the last year for some time the SPL champions will qualify directly for the lucrative group phase of the Champions League. Rangers, who squeezed into the quarter-finals of the Scottish Cup last night with a 1-0 win over St Mirren, are ten points ahead of Celtic at the top of the SPL with 13 games to play, leaving them on course for a championship success which would underpin Johnston's quest to steer his club out of their current fiscal storm.

"The main thing for us at the moment is the short term and focusing on matters on the field," Johnston told The Scotsman last night. "The next ten weeks will impact significantly on how we aspire to make progress for the club.

"The figures we are announcing today are pleasing and they show just how crucial it is to be in the Champions League. We have to sound a note of caution, because we still face many challenges, but clearly getting into the Champions League again would be of significant benefit."

Johnston succeeded Sir David Murray as Rangers chairman last August during a period of turmoil for the club as their finances came under intense scrutiny from Lloyds TSB. While he concedes the bank's ongoing involvement in the club's affairs is "not desirable", Johnston sought to ease concern among supporters as he insisted it is currently to Rangers' benefit. "Looking back to August, when Lloyds TSB were taking a more than unusual interest in Rangers, we have to be satisfied with where we are now," he added. "We were successful in persuading them that their immediate reaction, which was to look to downsize the club, was impractical and particularly unwise in terms of maintaining the club's value.

"We reached an agreement with them which is not ideal for either party but is practical in the circumstances. In no way would I criticise the fans who are entitled to voice their opinions. But as far as our relationship with Lloyds goes, it is working. We need them at this point in time. Murray (International Holdings) are not going to put any more money into the club, so we need the bank. They have been left holding the baby after the economic crisis hit Murray. The bank are our stop-gap measure."

Donald Muir, the corporate troubleshooter appointed to the board to oversee the club's financial restructuring, has become the focal point of protests from Rangers supporters, but Johnston called for understanding of his fellow director's position.

"To say Donald Muir is conflicted may be overstating it, but he is wearing two hats," said Johnston. "He is a non-executive director of Rangers and is expected to work within that role. He also represents the Murray group of companies, so in that role he is seeking to liquidate to Murray's advantage.

"In terms of a possible new owner, there is activity, but it is like shadow boxing at the moment. I would hope something will happen sooner rather than later, but there has to be understanding and probably compromise. It will be challenging going forward and hopefully we can adjust the current business plan which was the subject of Walter Smith's ire recently, rightly so in my opinion."

Smith had expressed his frustration at the restrictions placed on him in the transfer market where Rangers have now not paid money for a new player since August 2008. Johnston praised the veteran manager for his part in achieving ongoing success for Rangers despite those handicaps and is hopeful Smith and his assistants Ally McCoist and Kenny McDowall will be in a position to agree new contracts this summer.

"The guys know our position," he said. "Walter is at the stage of his career that whenever his time at Rangers does end, he will probably go and play golf. With Ally and Kenny, who are a bit younger, we are dealing with different scenarios. Walter is keeping an open mind at the moment. Whatever happens, history will show that Rangers were very fortunate to have him as manager during this period."

Emerging from the January transfer window with the loss of only Pedro Mendes and Jerome Rothen was regarded as something of a bonus by Rangers but the club face further uncertainty at the end of the season when several players, including top scorer Kris Boyd, are out of contract. Boyd has decided to wait until the summer before making a decision on his future.

"The offer to Kris Boyd remains on the table," said Johnston. "We hope he will stay but circumstances outwith our control, such as offers from English football, could persuade him to leave. We can't control the environment we are in when it comes to contract negotiations."

KEY FIGURES

TURNOVER

37.8m

Up by 17.7m

OPERATING PROFIT

13.1m

Up by 17.0m

OPERATING EXPENSES

21.0m

Down by 3.6m