It is always – whether it be in football or financial terms – about the results at Ibrox. The performance on the pitch continues to have the greatest bearing on Rangers’ fortunes off it.

The annual report for RIFC plc was released late on Monday afternoon and covers the year end to June 30, 2023. It is the first to be signed off by John Bennett as chairman and covers entry to the Champions League group stages and the transition from Giovanni van Bronckhorst to Michael Beale.

The annual general meeting will be held at New Edmiston House next month as shareholders and supporters get the chance to quiz Bennett and his board about the financial health of the company and the direction of the club. Here, the Rangers Review looks at the key questions that have emerged from a set of results that have, as always, sparked plenty of debate and discussion.

What are the headline numbers?

Rangers generated a small operating profit – this time of £252,000 – for the second successive year but a loss of just over £4million was recorded when one-off items were taken into account. Revenue was down to £83.3million, with the decrease of £3.1million ‘driven largely by not having post-group stage knockout European football’.

Gate receipts and hospitality income contributed £39.9million as £18.2million was brought in via season ticket sales. Broadcasting revenues that were impacted during the pandemic period returned to normal levels, while commercial partnerships and sponsorship income accounted for £6.3million of the total and £11.1million came in from retail and other commercial activities.

In his chairman’s report, Bennett addressed the four pillars that he has spoken about in previous years. In that regard, there is one alarming point from these figures, and it is clear where Rangers must see progress if their position is to improve on and off the park. Rangers need to buy better players, win with them and then sell them on.

“While successive years of operating profitability can be seen as encouraging, especially in light of what had gone before, there is still much work to be done,” Bennett said. “The club vision must be simple and clear: sustainable success. This applies both on and off the pitch and it must be a mantra by which all at the club live.

“Football is a business which is particularly prone to being reactive. While this may be inherent to the industry, sustainable success can only come when we are systematic in our processes and in our actions. It is my firm conviction that this is a pre-cursor to returning the club to the status of serial winners.”

That ambition does, of course, come with a caveat and Rangers have to compare themselves to Celtic in every aspect of business and sport. The revenue gap between the clubs had been narrowed in recent seasons but Celtic saw a 35.8 per cent increase for their financial year to just under £120million as a profit before taxation of £40.1million was posted. Cash in the bank at year-end was £72.3million, while Rangers had just £5.3million.

Why do Rangers need to get their player-trading model right?

The fact that Bennett highlighted this issue speaks volumes. Rangers have talked up the need for a profitable transfer plan for several seasons now but the successes – most notably the record sales of Nathan Patterson and Calvin Bassey and the departure of Joe Aribo – are overshadowed by the failures. Bassey’s exit to Ajax and Aribo’s move to Southampton saw a transfer profit of £23.6million.

“Player trading will always be inherently volatile, yet Rangers must replace sporadic ‘wins’ with systematic success,” Bennett said. “It is a given that it all begins with player recruitment. This is an area of priority for your Board, and we anticipate that the coming months will see a strengthening in the leadership and processes of our football department, specifically with this in mind.”

Post the year end, Rangers have also sold off the likes of Glen Kamara, Fashion Sakala and Antonio Colak. A squad investment of £17.5million during the period followed £7.5million the previous term and Bennett revealed that sum ‘was supplemented further by £21.0m of spend since the year end, in the summer transfer window.’

A wages-to-turnover ratio of 51 per cent is up on last season but still within the KPI parameters that the board have set. Yet that total spend of around £42million on squad remuneration delivered no trophies, a humiliating Champions League campaign and Rangers are now on their third manager in just over 12 months. Once again, the questions centre on not what Rangers spend but how they spend it and the value for money has not been there as costly mistakes have piled up.

One of the issues that Rangers now face is the lack of sellable assets within the squad. The likes of Jack Butland and Nicolas Raskin could attract decent fees but there is no conveyor belt of players from a buy low, sell high model. That is one that Celtic continues to reap the rewards of and Rangers must cash in every two seasons out of three to be successful and sustainable. 

Rangers have got their recruitment badly wrong in recent windows and have paid the price in terms of medals. Until it is rectified, they will feel the cost of it in black and white as well.

How important is European football?

Quite simply, it is hugely significant for Rangers. Without it, their cost base and business plan just does not work and their forecasts predict that the club will ‘finish 1st or 2nd in the SPFL Premiership in 2023/24 and participate in the group stages of European competition in the season thereafter’.

The discussion regarding the benefits of a Champions League campaign compared to a Europa League one has been held several times. It was noted that the run to the final in Seville brought in £17.3million the previous year. Had Rangers been able pick up a handful of points from the matches with Liverpool, Napoli and Ajax, their overall revenues would have increased but the impact of their pointless campaign has been laid bare.

The euphoria of reaching the Champions League group stage with the wins over Union Saint-Gilloise and PSV Eindhoven quickly evaporated. It proved to be a costly campaign for Rangers once bonuses due to players were taken into account and their early elimination from European competition saw Ibrox host four fewer matches as revenues were missed out on. Overall operating expenses increased to £95.2million but that will reduce come the next set of accounts due to the lower sums to be paid to the squad after Beale’s side were humbled by PSV this time around.

Celtic noted that their £31.7million increase in revenue had been driven by ‘greater ticket and media rights income’ in the Champions League as opposed to the Europa League. Every time Rangers fail in the Champions League, the task becomes that much more difficult as the financial balance falls in Celtic’s favour.

The European exit played a part in Beale’s demise and Rangers find themselves back in the familiar territory of UEFA’s secondary competition. It is one that Philippe Clement must do well in, for a variety of reasons.

“The aim for everyone at the Club is to get back to winning silverware in the current season,” Bennett said. “We look forward to competing again in the UEL, bringing back memories of our strong run two years ago in that competition.”

Who is still providing additional financial support?

The buzzwords around self-sustainability have been prominent for some time now but Rangers cannot lay out a definitive path towards it at present. Eight years after regime change, Rangers are still reliant on the generosity of their directors and investors to keep driving the club forward on and off the pitch.

Loans of £7.14m from Bennett and £1.28m from Julian Wolhardt – both of which are charged at 4% on an accruals basis – were made under a secured debt facility and were outstanding at 30 June, 2023. Those loans will be repaid in quarterly instalments over the next five years and Bennett also has a further £5million facility, on the same percentage terms, that is currently outstanding. Security is held over New Edmiston House.

Former chairman Douglas Park saw his £2milllion loan repaid during the financial year, while facilities of £0.07million from Alistair Johnston and £1million from John Halsted were converted to equity. Halsted, who invests through Perron Investments LLC, became a non-executive director in August. Interest-free loans totalling more than £1million from George Letham, George Taylor, Janet McAlpine and Stuart Gray were also converted to equity.

The investment from so many is both emotional and financial yet there must come a point where Rangers do not need that lifeline. If there is a positive in the situation, it is that no external debt exists and that those who are writing the cheques have the best interests of the club at heart.

Executive figures highlight the commitment of the board and those closest to the top table. As discussions continue over the redevelopment of Ibrox, for example, that backing cannot be taken for granted. 

Indeed, it has been extended once again and a post-balance sheet event notes that: ‘The Group has extended its revolving credit facility and entered into a new term loan facility with certain investors. These facilities will be available as required for working capital purposes.’

An agreement with Park’s of Hamilton brought £0.5million of revenue and a further £4.5million is due over the term of the contract. In his report, Bennett noted that Douglas Park ‘remains on hand to offer his valued guidance and support.’

Are there other ways in which Rangers can boost revenue levels?

As Bennett noted the contribution of the man he replaced as chairman, he laid down a challenge to the executive team that he has installed. The appointment of James Bisgrove as chief executive officer was the first part of the jigsaw and three others followed as Karim Virani and James Taylor joined in commercial and finance roles respectively and Creag Robertson was promoted to director of football operations.

“Now, myself, the RIFC Board and our new executive management team must continue the work,” Bennett said. “Yet, it is not simply a continuation that is required: it is a raising of the bar. Having spent recent months getting closer to the daily operations of the club, it is clear to me that there is widespread scope for improvement.”

Commercial revenues hit the £28million mark for the second financial period in succession. Retail income increased from £5.5million to £7.2million during the third year of the agreement with Castore. A comparison with Celtic is difficult in this regard due to the manner in which the figures are recorded.

The complicated history of Rangers’ merchandise operation continues to play a part in the present at Ibrox. During the review year, a claim was raised by Elite Sports Group Limited, who entered administration in November, against Rangers in respect of previous contracts. The board are ‘satisfied that no provision is required in the financial statements’ regarding this claim.

Bennett revealed that £18.9million had been invested in Ibrox, Auchenhowie and New Edmiston House over a two-year period and went on to talk up the importance of the latter as Rangers seek to expand their off-field offering following the partnership with Gordon Ramsay and launch of the Blue Sky Lounge. 

The NEH project came in over budget and now houses the main retail space and museum. A sports bar will be launched in the old Megastore in the coming months. Those investments have and will make a difference to the matchday experience at Ibrox but their financial benefit in the grand scheme of things is relatively minor when compared to the sums on offer in sporting senses.

Rangers remain hugely sceptical of the worth of the commercial deals that were signed by the SPFL in relation to cinch sponsorship and Sky’s broadcast agreement. While those contracts are valued as they are, the focus must be on driving their own revenues to bolster their bottom line.

Where does this leave Philippe Clement in terms of building a squad?

Clement has certainly held up his end of the bargain since being appointed as Beale’s successor last month and six wins from his first seven matches in charge represents an impressive start to life at Ibrox. He knows as well as anyone the trials and tribulations that are ahead, though, and there is no doubt that Clement will look to strengthen the squad during the January transfer window and, more extensively, in his first summer as manager.

Bisgrove addressed the recruitment question on the day that Clement was unveiled in the Blue Room and the board will look to back their manager when they can. Both of Clement’s predecessors – Van Bronckhorst and Beale – were given significant funds to put their stamp on the squad and the Belgian will expect the same given the situation that he inherited. He must spend his budget wisely. 

In his manager’s review on page seven of the report, Clement spoke of Rangers’ history, the passion of the supporters and his own mindset and track record as a winner. Only he and the board will know what promises and plans were made during their discussions before his arrival but the Belgian is sure everyone at the club is on the same page.

“In my discussions with the board prior to being offered the job, we were very clear with each other on what we believe is required here to improve us on the pitch, what we expect from each other and our shared desire to be successful,” Clement said. “That strong bond between myself, James Bisgrove, our CEO, Creag Robertson, our Director of Football Operations and the wider Board and executive team will be crucial going forward.”

That team will be bolstered in the coming weeks as Rangers seek to appoint a new technical director. The recruitment strategy will naturally form a key part of the successful candidate’s remit. If he and Clement fail, Rangers will be in an extremely difficult position once again.

What should supporters expect from the figures in 12 months?

It is impossible to predict the future but it is clear what Rangers need to happen if the financial picture is to become healthier in the seasons to come. As above, their fortunes in football terms will determine the mood around the boardroom table in more ways than one.

Winning the Premiership title is non-negotiable for many reasons and the importance of a prolonged European run cannot be underestimated. The pressure is on Clement to deliver and Bennett’s board will come under huge scrutiny if it transpires that they have backed the wrong man after investing so much time, money and effort into the ultimately wasteful Beale era.

The recruitment process must improve, and quickly. Rangers do not have enough players with the required value on the pitch or the balance sheet and that must be addressed by Clement and the incoming technical director. The football board – which also consists of Bisgrove, Zeb Jacobs and Dr Mark Waller – has been talked up and now must deliver at all levels.

At June 30, Rangers had £13.4million in loans to investors outstanding alongside other loans of £3.1million and lease agreements of £1.8million. As those sums are paid off, further investments will follow and Rangers have contracted for £0.95million worth of stadium and building improvements. Funding plans for further expansion works will need to be carefully costed. 

There will continue to be a reliance on investors to provide funds along the way. In Bennett’s strategic report, it states that: ‘These forecasts have been prepared for a range of possible scenarios with sensitivity analysis applied to the key revenue streams and costs. Based on these forecasts the board are satisfied that the club has adequate working capital and undrawn facilities to meet its forecast cash requirements.’

The days of going concern warnings are behind Rangers. Whatever questions are asked and answered today, they are largely insignificant compared to some of those of yesteryear when supporters were left to fear for the existence of their club.

That doesn’t mean that this board get a free pass, though. Their decisions must still be discussed and deliberated. Right now, it is how Rangers are spending their money that is the most pertinent point.