TIDMRFC
RNS Number : 9220I
Rangers Int. Football Club PLC
31 March 2015
31 March 2015
Rangers International Football Club plc
("Rangers" or the "Company")
Interim Results
Rangers International Football Club plc (AIM:RFC), the holding
company for the Scottish football Club 'Rangers', is pleased to
announce interim results for the six month period to 31 December
2014.
Operational Highlights
-- Season ticket sales of 24,589 at period-end
-- Average home league attendance of 32,321 during the period;
thirteenth highest UK football attendance
-- Semi-finalist for QTS Scottish League Cup and Petrofac Training Cup
-- Currently placed 3rd in Championship and in play-off spot
Financial Highlights
-- Revenue of GBP13.1m
-- Operating expenses of GBP16.1m
-- Profit on disposal of player registrations of GBP0.2m
-- Loss before finance costs of GBP2.6m
-- Finance leases of GBP0.7m at 31 December 2014
Paul Murray, Interim Chairman of Rangers, commented
"These results are historical and relate to a period before the
new Board took office. I wish to draw shareholders' attention to
the fact that these interim results have been reviewed by Jeffreys
Henry LLP. I have been informed by Deloitte, the existing auditor,
that they informed the previous Board of their intention to resign
following the June 2014 audit. The previous Board chose not to
announce this nor did they find a replacement for Deloitte. With
limited time to have these results reviewed the Board asked
Jeffreys Henry to perform the exercise as Independent Reporting
Accountants, not auditors. They have previously carried out work
for the Club and therefore know the finance functions well. The
Board will make a further announcement on this subject once we have
found a replacement firm for Deloitte.
The new Board's focus is on the future. We are in the process of
developing a business and funding plan which will help us rebuild
the Club and ensure it enjoys football and commercial success in
the future. We will work closely with our shareholders, supporters
and other stakeholders to achieve our vision of building a modern
football Club founded on our traditional values and standards. The
recovery process will take time but if we work closely together we
are confident of success."
For further information please contact:
Rangers International Football Club plc www.rangers.co.uk
Paul Murray Tel: 020 7148 6143
Newgate
Roddy Watt Tel: 020 7148 6143
About Rangers Football Club
Rangers Football Club, formed in Scotland in 1872, is one of the
world's most successful clubs, having won 54 League titles, 33
Scottish Cups, 27 League Cups and the European Cup Winners' Cup in
1972. The Club's loyal and sizeable supporter base, both in
Scotland and around the world, enables the Club to boast one of the
highest percentages of season ticket holders in the UK, with 25,000
having been sold for the current season. Playing at the 51,082
seater Ibrox Stadium and benefitting from the world class 37 acre
Murray Park training facility, the Club has been a dominant force
in Scottish football for decades. This world class stadium,
training infrastructure and a loyal and passionate global fanbase
provide an excellent foundation for the Rangers Group.
The Club has this season been playing in the SPFL Championship,
and it is the intention of the Directors and the Manager for the
Club to return to top level football as soon as possible. The
history, facilities and ambition of the Club are such that it
remains a desirable destination for foreign and domestic players
alike. The first team squad is currently managed by interim manager
Stuart McCall, the former Rangers and Scotland midfielder.
For more information please visit the website:
www.rangers.co.uk
Chairman's Statement
-- 2022 vision
-- Fan representation remains a key part of the forward
strategy
-- Rebuild a modern football Club based on the traditional
values and traditions of
Rangers Football Club
When I resolved to do everything within my power to make sure
the correct people would regain control of Rangers I had no idea
how long it would take. I just knew that this fantastic Club and
its history had to be protected and even in those moments when it
felt as though the fates themselves were conspiring against our
efforts, there were no thoughts of retreat.
Rangers and the task of setting the Club back on the correct
path were too important but I must say I never imagined I would
become Chairman of one of our country's great institutions.
I may be in the Chair only in the interim but the honour is no
less great. Sadly, those who have held this post in recent times
have failed to recognise the profound significance of being
Chairman of Rangers but there is no possibility of the new Board
ever under-valuing Rangers' position.
The new Directors have been in place only a matter of weeks but
have already started to repair the damage caused through recent
years of neglect and disrespect for this Club, its people and its
history. The mismanagement of the Club in recent years has been
simply staggering.
The new Board is well advanced on funding plans, especially
short to medium term which will ensure the Club has a firm
foundation from which to drive on into the future. We have moved
quickly to secure the short term funding position by agreeing a
GBP1.5m unsecured interest-free loan from key shareholders. In the
very near future we will present a medium - long term funding plan
for the Club. This funding will be provided by existing and new
investors who now want to invest in the Club. Thereafter, the Club
must quickly become self-sustaining and absolutely free from the
kind of funding crises which have plagued Rangers in recent
years.
As the Interim Accounts prove, the new Board has inherited major
problems but while campaigning for change we all knew the Club
would be in need of major restructuring and repair on all fronts.
We can and we will return this Club to a strong and profitable
footing through strategic planning, investment and re-engagement
with all of our stakeholders.
Too many of them have been lost or disenfranchised because of
successive failings by a series of Directors over the last four
years in particular. But they are gone now and this is a new era
for this great and special Club which must be regenerated, not only
for its own good but for the greater good of Scottish football.
With the fans returning to support the Club we believe that
there is significant potential to grow our commercial income.
Let's never forget just how important Rangers is to the domestic
game. This Club's fans have filled the grounds of many smaller
clubs throughout the country and given them income to improve their
own facilities. Many of these other clubs have expressed their
gratitude but we must also thank them for the warmth of their
welcome. We won't forget that.
Neither will we forget that Rangers' fans are the Club's most
significant stakeholder and they must never again be taken for
granted or treated with contempt. They have demonstrated the depth
of feeling and belief in their Club and having played such a
crucial part in achieving boardroom change it would be wrong, never
mind foolish, to ignore them now.
So I would like to take this opportunity to reinforce the new
Board's commitment to them. They will have full and meaningful
boardroom representation and their voice will be heard.
Of course a large number of others also helped in the struggle
to achieve change and they, too, have our gratitude but the
supporters are the real heroes. Without them nothing would have
changed and there would have been no way of recovery from the set
of figures in this report.
However, that is not to say the Club cannot begin to thrive
again. Of course it can. We have access to significant new funding
and with intelligent investment at Murray Park and at Ibrox we can
all be confident of a bright future for this remarkable Club.
It is clear to everyone what can be achieved when there is a
strong connection between the Club's Directors and the support and
this is a link which we must ensure remains strong. So the simple
truth is Rangers needs every fan to invest in the future. It is
only by remaining united that we will begin to prosper and regain
our traditional standing in Scotland's top flight as well as
re-entering the European arenas.
This is what we, the Board, are working towards but achieving
this will be impossible if our fans do not buy into that vision.
Buying season books and match-day tickets is not just about today,
it is also very much about where we want to be in a year, five
years, ten years and beyond.
The Board is working towards a plan which sees Rangers at the
top and every single one of us has to buy into that vision.
New Board members and the highly-skilled individuals required to
get the Club functioning at optimum levels in the various
departments are being considered and they will help find the
correct balance between football, commercial, financial and fan
engagement.
The vision I mentioned earlier is to focus on the next seven
years so that by 2022, the Club's 150(th) anniversary and the
50(th) anniversary of Barcelona we, Rangers, will be back at the
very top.
This means that over the next few years the finance we are
putting in place now will provide the infrastructure and personnel
at Murray Park to make sure Rangers are competing and winning in
Scotland's top flight as well as stepping back into the European
arenas again.
Then for the three or four years after that all our efforts will
be directed towards making Rangers stronger and European regulars
as our 150(th) year approaches. That year should be one of
celebration.
It is not unreasonable to expect this because Rangers have been
there before so the message is that by purchasing a new season
ticket you are investing in Rangers' future. Winning the boardroom
back was Part One of the recovery and now we face Part Two.
A massive rebuild is required at every level and in every
department of this huge Club of ours and we cannot and will not shy
away from those tasks. Together we will regenerate every aspect of
the Club and make certain Rangers will be a force again on and off
the field of play.
After years of mismanagement we need patience and support. We
must never forget what has happened to our Club in the last four
years. The new board will ensure that it never happens again.
Although we are looking to the future we will also examine and
act upon any evidence of past impropriety by former Directors and
executives.
We are all aware of the problems on the field but I would like
to offer my thanks to Ally McCoist and Kenny McDowall who did all
they could to give Rangers a winning team and we should take into
consideration the difficulties they both faced. They had to operate
against a backdrop of constant boardroom upheaval and turmoil. No
one felt secure and the life was being sucked out of Ibrox and
Murray Park.
We have brought in Stuart McCall as Interim Manager to help get
the team into the Premiership and although he faces a difficult
task we believe he will do it.
Stuart jumped at the challenge without fear or hesitation and
that tells us a lot about the calibre of the man but even so, we
cannot rush into making a final decision on the permanent position
because the success of everything we are planning behind the scenes
will depend almost entirely on the team's ability to compete at the
very top.
Only 13 men have held the position of Rangers Manager so we have
a duty to take whatever time is necessary to find the right man. We
would expect Stuart to be a strong candidate in that process.
We will also find the right people to restructure player
development and unearth talent in all corners of the football
world. Sufficient amounts of money will be set aside for this vital
purpose but everything we do will be to help make Rangers a premium
brand again and to shape the vision. We will ensure that particular
emphasis is placed on player identification and development. For
too long this has been neglected at the Club.
Our vision is to build a football club fit for the 21(st)
Century but one that is founded on the traditional values and
traditions of Rangers which we all hold dear.
No matter what functions we perform within the Club all of us
must believe in this vision and already the new Directors are
engaging with staff to spread the message we are in this together.
Together we are the Rangers Family and we will face our challenges
and celebrate our successes together.
Our focus must be on doing everything necessary to guarantee an
exciting, vibrant and much more successful future and we will also
be working towards creating better working relationships with all
our commercial partners, including Sports Direct. We are in the
process of engaging with them because they are a large shareholder
as well as being our key commercial partner.
Finally, I would also like to thank the staff for their efforts
and commitment in difficult times when various individuals and
Directors seemed to come and go without any obvious long-term
strategy. The views of staff and their contributions will be
recognised and appreciated by this new Board.
Remember, this is our Club, we have taken ownership of it and
with our 2022 vision we will not fail.
Paul Murray
Interim Chairman
30 March 2015
Financial Review
The results for this period are disappointing taken in the
context of the Club playing in the Championship division which
should have delivered higher revenues and an improving financial
performance. The decision by sections of the support to demonstrate
disaffection with the Board and also the football product,
highlights the importance of delivering a business performance
which is right both on and off the park.
Revenue for the period was GBP13.1m, an overall decrease of
GBP0.1m over the comparative period. The combined effect of lower
SPFL attendances and the absence of a home friendly fixture reduced
ticketing revenue in these areas by GBP0.7m. This was offset
against total revenue of GBP0.4m generated from four rounds of the
League Cup against only one away round in the previous season.
Broadcasting income increased by GBP0.3m to GBP0.6m, reflecting
higher SPFL central pool revenue and additional matchday coverage
in cup competitions.
The stadium hosted the Commonwealth Games rugby sevens during
July and also an SFA International fixture in October. These two
events generated additional revenue of GBP1.3m from stadium rental
and the provision of event security. Retail revenue was GBP4.3m, a
reduction of GBP0.5m from the previous period due to the closure of
the Belfast and Glasgow Airport retail outlets and a demonstration
by some supporters of dissatisfaction with the previous Rangers
Board and arrangements with the Club's retail partner.
Sponsorship revenue decreased by 0.3m to GBP0.4m. Sponsorship
contracts were replaced on a less favorable basis from the previous
period reflecting the difficult business environment the Club was
operating within.
Operating expenses excluding amortisation of players'
registrations decreased by GBP0.9m compared to the comparative
period, to GBP15.7m. The decrease included an overall reduction in
costs attributable to the retail business of GBP0.4m. Staff costs
reduced by GBP0.3m to a total of GBP7.1m for the period. This
reduction was net of an increase of GBP0.2m in payroll costs
incurred in providing event security and also includes a charge of
GBP0.4m on severance payments to former employees.
The operating loss reduced to GBP2.8m from a loss of GBP3.6m in
the comparative period. Finance costs were GBP32k against a
previous year cost of GBP31k reflecting interest charges incurred
on finance leases.
A net cash outflow of GBP1.3m in the period resulted in a
closing net cash position of GBP3.3m. The cash outflow included
GBP5.3m from operations which was principally a result of the
operating loss of GBP2.8m and decrease in the season ticket
deferred income balance. Expenditure on fixed assets was GBP0.1m
and related mainly to replacement of mechanical equipment.
The Company raised additional equity by way of an open offer to
existing shareholders in September 2014. The gross proceeds of the
issue were GBP3.1m and GBP2.8m net after expenses of the issue.
Shareholder loans of GBP1.5m which had been made available to
the Club by shareholders in order to provide working capital
facilities to support the Club though the low point in its annual
operating cash cycle in February 2014 were repaid by September
2014. These loans were replaced by GBP3.0m of loans provided by
MASH Holdings Limited, a related party and partner in the Retail
joint venture.
INDEPENDENT REVIEW REPORT TO RANGERS INTERNATIONAL FOOTBALL CLUB
PLC
Report of the financial statements
We have reviewed the accompanying financial statements of
Rangers International Football Club plc, which comprise the
condensed consolidated statement of financial position as at 31
December 2014, and the condensed consolidated income statement,
condensed consolidated statement of comprehensive income, condensed
consolidated statement of changes in equity and condensed
consolidated statement of cash flows for the period then ended, and
a summary of significant accounting policies and other explanatory
information.
This report is made solely to the company in accordance with
International Standard on Review Engagements (ISRE) 2400 (Revised).
Our review work has been undertaken so that we might state to the
company those matters we are required to state to them in an
independent review report and for no other purpose. To the fullest
extent permitted by law, we do not accept or assume responsibility
to anyone other than the company, for our review work, for this
report, or for the opinions we have formed.
Directors' responsibility for the financial statements
The directors are responsible for the preparation and fair
presentation of these interim financial statements in accordance
with the International Financial Reporting Standards and for such
internal controls that the directors' determine are necessary to
enable the preparation of financial statements that are free from
material misstatement, whether due to fraud or error.
Our responsibility
Our responsibility is to express a conclusion on the
accompanying financial statements. We conducted our review in
accordance with ISRE 2400 (Revised). ISRE 2400 (Revised) requires
us to conclude whether anything has come to our attention that
causes us to believe that the financial statements, taken as a
whole, are not prepared in all material respects in accordance with
the applicable financial reporting framework. This Standard also
requires us to comply with relevant ethical requirements.
A review of financial statements in accordance with ISRE 2400
(Revised) is a limited assurance engagement. The practitioner
performs procedures, primarily consisting of making inquiries of
management and others within the entity, as appropriate, and
applying analytical procedures, and evaluates the evidence
obtained.
The procedures performed in a review are substantially less that
those performed in an audit conducted in accordance with
International Standards on Auditing. Accordingly, we do not express
an audit opinion on the financial statements.
Emphasis of matter - going concern
In forming our review conclusion on the financial statements,
which is not modified, we have considered the adequacy of the
disclosure made in note 1 of the financial statements concerning
the company's ability to continue as a going concern.
These conditions, along with the details provided in note 2 to
the financial statements, indicate the existence of a material
uncertainty which may cast significant doubt about the company's
ability to continue as a going concern. The interim financial
statements do not include adjustments that would result if the
company was unable to continue as a going concern.
Emphasis of matter - uncertainty in respect of possible
litigation
In forming our review conclusion on the financial statements,
which again is not modified, we have considered the adequacy of
disclosure made in note 16 to the financial statements in respect
of the uncertain outcome of the potential litigation claim
following the letters received as detailed in note 16.
The company is satisfied through formal investigations as
detailed in note 16 that the allegations have no legal merit. Since
30 May 2013 the company has had no communication from Mr. Whyte and
Earley or from their legal team. Ultimately, the final outcome of
this matter cannot be reliably determined and as a result the
interim financial statements do not include any adjustments in
respect of this matter.
Conclusion
Based on our review, nothing has come to our attention that
causes us to believe that these financial statements do not present
fairly, in all material respects, the financial position of Rangers
International Football Club plc as at 31 December 2014 and of its
financial performance and cash flows for the period then ended, in
accordance with the International Financial Reporting Standards
30 March 2015
Jeffreys Henry LLP
Chartered Accountants
5-7 Cranwood Street
London
EC1V 9EE
Condensed Consolidated Income Statement
For the 6 month period to 31 December
2014 6 month period 6 month period
to 31 December to 31 December
2014 2013
Notes GBP'000 GBP'000
Revenue 3 13,092 13,160
Operating expenses
- Amortisation of players' registrations 7 (398) (484)
- Other (15,684) (16,554)
----------------- -----------------
Total operating expenses (16,082) (17,038)
Other operating income 150 235
Operating loss (2,840) (3,643)
Profit on disposal of player registrations 206 140
Finance costs (32) (31)
----------------- -----------------
(Loss)/profit on ordinary activities
before taxation (2,666) (3,534)
Taxation 5 (190) (182)
----------------- -----------------
(Loss)/profit for the period (2,856) (3,716)
----------------- -----------------
Attributable to:
Owners of the Company (3,660) (4,281)
Non-controlling interests 804 565
----------------- -----------------
(2,856) (3,716)
----------------- -----------------
Basic earnings per ordinary share 4 (4.9p) (6.6p)
Condensed Consolidated Statement of Comprehensive
Income
For the 6 month period from to 31 December 6 month period 6 month period
2014 to 31 December to 31 December
2014 2013
GBP'000 GBP'000
(Loss)/profit for the period (2,856) (3,716)
---------------- ----------------
Gains on property revaluation - -
Deferred tax relating to components of other
comprehensive income - 1,019
---------------- ----------------
Other comprehensive income for the period - 1,019
---------------- ----------------
Total comprehensive income for the period (2,856) (2,697)
---------------- ----------------
Attributable to:
Owners of the Company (3,660) (3,262)
Non-controlling interests 804 565
---------------- ----------------
(2,856) (2,697)
---------------- ----------------
Condensed Consolidated Balance Sheet
As at 31 December 2014
As at As at As at
31 December 31 December 30 June
2014 2013 2014
Note GBP'000 GBP'000 GBP'000
Non-current assets
Property, plant and equipment 6 46,399 47,861 47,134
Intangible assets 7 17,431 18,273 17.797
----------------- ----------------- ----------------
63,830 66,134 64,931
----------------- ----------------- ----------------
Current assets
Inventories 200 85 184
Trade and other receivables 3,448 4,644 3,405
Cash and bank balances 3,327 3,475 4,607
----------------- ----------------- ----------------
6,975 8,204 8,196
----------------- ----------------- ----------------
Total assets 70,805 74,338 73,127
----------------- ----------------- ----------------
Current liabilities
Trade and other payables (8,798) (6,134) (8,166)
Obligations under finance leases (421) (607) (477)
Deferred income 8 (4,104) (5,300) (6,156)
Provisions for liabilities 9 (395) - (552)
----------------- ----------------- ----------------
(13,718) (12,041) (15,351)
----------------- ----------------- ----------------
Net current (liabilities)/assets (6,743) (3,837) (7,155)
----------------- ----------------- ----------------
Non-current liabilities
Trade and other payables (22) (362) (364)
Obligations under finance leases (261) (681) (476)
Deferred tax liability 10 (6,657) (6,798) (6,685)
Provisions for liabilities - - (281)
----------------- ----------------- ----------------
(6,940) (7,841) (7,806)
----------------- ----------------- ----------------
Total liabilities (20,658) (19,882) (23,157)
----------------- ----------------- ----------------
Net assets 50,147 54,456 49,970
----------------- ----------------- ----------------
Equity
Share capital 11 815 651 651
Share premium account 12 32,008 29,139 29,139
Revaluation reserve 13 26,628 26,763 26,738
Retained earnings (10,810) (2,906) (7,260)
----------------- ----------------- ----------------
Equity attributable to equity holders
of the parent 48,641 53,647 49,268
Non-controlling interests 1,506 809 702
----------------- ----------------- ----------------
Total equity 50,147 54,456 49,970
----------------- ----------------- ----------------
Condensed consolidated Statement of Changes in Equity
For the 6 month period to 31 December 2014
Attributable to equity holders of the parent:
Share Share Retained Revaluation Total
capital premium earnings reserve
GBP'000 GBP'000 GBP'000 GBP'000 GBP'000
Equity shareholders'
funds
at 1 July 2013 651 29,139 1,236 25,883 56,909
Loss for the period - - (4,281) - (4,281)
Deferred tax rate
change in relation
to revaluation of
heritable freehold
properties - - - 1,019 1,019
Transfer from revaluation
reserve to retained
earnings - - 139 (139) -
--------- --------- ---------- ------------ --------
Equity shareholders'
funds
at 31 December 2013 651 29,139 (2,906) 26,763 53,647
Loss for the period - - (4,371) - (4,371)
Deferred tax liability
relating to components
of other comprehensive
income - - - (8) (8)
Deferred tax liability
relating to depreciation
of components of
other comprehensive
income - - (121) 121 -
Transfer from revaluation
reserve to retained
earnings - - 138 (138) -
--------- --------- ---------- ------------ --------
Equity shareholders'
funds
at 30 June 2014 651 29,139 (7,260) 26,738 49,268
Loss for the period - - (3,660) - (3,660)
Open offer share
issue 164 2,869 - - 3,033
Deferred tax liability
relating to depreciation
of components of
other comprehensive
income - - (28) 28 -
Transfer from revaluation
reserve to retained
earnings - - 138 (138) -
--------- --------- ---------- ------------ --------
Equity shareholders'
funds
at 31 December 2014 815 32,008 (10,810) 26,628 48,641
========= ========= ========== ============ ========
Condensed consolidated Statement of Cash
Flows
For the 6 month period to 31 December As at As at
2014 31 December 31 December
2014 2013
Note GBP'000 GBP'000
Cash used in operations 14 (5,293) (5,573)
Cash flows from investing activities:
Purchase of intangible assets (111) (281)
Purchase of property, plant and equipment (95) (1,383)
Proceeds from sale of intangible assets 223 161
Repayment of RFC 2012 plc football debt - (251)
Net Interest paid (77) (37)
-------------- --------------
Net cash used in investing activities (60) (1,791)
-------------- --------------
Financing activities
Lease finance advances - -
Repayment of lease finance (271) (359)
Proceeds from issue of shares 2,844 -
Loans received 3,000 -
Loans repaid (1,500) -
-------------- --------------
Net cash from financing activities 4,073 (359)
-------------- --------------
Net increase in cash and cash equivalents (1,280) (7,723)
-------------- --------------
Cash and cash equivalents at the beginning
of the period 4,607 11,198
Cash and cash equivalents at the end
of the period 3,327 3,475
-------------- --------------
(1,280) (7,723)
-------------- --------------
Included within cash balances is GBP3.2m (2013: GBP1.7m)
relating to Rangers Retail Limited, which is not immediately
available as working capital to the Group as a whole.
Notes to the Interim Report for the 6 month period to 31
December 2014
1. Basis of Preparation
The condensed set of financial statements has been prepared
using accounting policies consistent with International Financial
Reporting Standards (IFRSs) as adopted by the European Union. The
same accounting policies, presentation and methods of computation
are followed in the condensed set of financial statements as would
be applied if the Group's annual audited financial statements were
being prepared. While the financial figures included in this
half-yearly report have been prepared in accordance with IFRSs
applicable to interim periods, this half-yearly report does not
contain sufficient information to constitute an interim financial
report as that term is defined in IAS 34.
General Information
The Rangers Football Club Ltd (TRFCL) was incorporated on 29 May
2012 and on 14 June 2012 purchased the trade and assets of the
former Rangers Football Club plc which had been placed in
liquidation. On 7 December 2012 Rangers International Football Club
plc (RIFC) was created and floated on the Alternate Investment
Market, incorporating in its Group The Rangers Football Club Ltd,
the existing shares of which were swapped on a one for one basis
with those of RIFC. Transactions relating to both The Rangers
Football Club Ltd and Rangers International Football Club plc are
hereafter referred to as the Group where the transactions or
reference is not specific to a distinct legal entity.
Rangers International Football Club plc is a Company
incorporated in Scotland. The address of the registered office is
Ibrox Stadium, Glasgow, G51 2XD. The nature of the Company's
operations is that of a football club.
The financial information is presented in pounds sterling
because that is the currency of the primary economic environment in
which the Group operates. All activities of the Group are performed
in the United Kingdom.
2. Significant Accounting Policies
Basis of accounting
This condensed set of financial statements has been prepared in
accordance with accounting policies consistent with International
Financial Reporting Standards (IFRSs), as adopted by the European
Union.
Other than the Group's property which has been revalued, the
financial information has been prepared on the historical cost
basis. Historical cost is generally based on the fair value of the
consideration given in exchange for the assets. The principal
accounting policies adopted are set out below.
Going concern
The Directors are required to prepare the interim financial
statements on the going concern basis unless it is inappropriate to
presume that the Group and Parent Company will continue in
business. In satisfaction of this responsibility the Directors have
considered the Group's ability to meet its liabilities as they fall
due.
The Group meets its day to day working capital requirements
through existing cash facilities, shareholder loans and finance
leases. Management information tools including budgets and cash
flow forecasts are used to monitor and manage current and future
liquidity. The Directors acknowledge that there is a level of
uncertainty in the general economic environment which may impact
the trading position of its customers and suppliers.
The current board took control on 6 March 2015 and made the
identification of working capital requirements a priority. As noted
in note 17 (Post Balance Sheet Events) the immediate position was
underpinned by the availability of a second GBP5m loan from
SportsDirect.com Retail Limited.
The board are investigating a number of options and have
identified a number of potential investors. There are also
shareholders who are willing to offer short term funding, and the
first three of these loans were drawn down on 23 March 2015. At the
same time the Board announced that they had terminated the process
of drawing down the second tranche of the SDI loan.
Early indications from existing significant shareholders is that
there will be positive support for a rights issue in Summer 2015,
and that this is the mechanism by which interested parties wish to
inject funds into the company.
The board remain confident that their work in the first weeks of
their tenure will generate the investment required to both fund
working capital and to develop the company, football club and
playing squad, and as such these interim financial statements are
prepared on a going concern basis.
Basis of consolidation
The Group's interim report incorporates the financial
information of Rangers International Football Club plc and entities
controlled by the Company (its subsidiaries) for the six months
accounting period to 31 December 2014 through the application of
merger accounting. Under these principles the financial statements
of the Group have been prepared by combining the results of the
combining entities for the interim period under review. Control is
achieved where the Company has the power to govern the financial
and operating policies of an investee entity so as to obtain
benefit from its activities. All intra-group transactions,
balances, income and expenses are eliminated on consolidation.
Business combinations
Acquisitions of subsidiaries and businesses are accounted for
using the acquisition method, with the exception of The Rangers
Football Club Limited, for which merger accounting has been
applied. The consideration for each acquisition is measured at the
aggregate of the fair values (at the date of exchange) of assets
given, liabilities incurred or assumed, and equity instruments
issued by the Group in exchange for control of the acquiree.
Acquisition-related costs are recognised in profit or loss as
incurred.
The acquiree's identifiable assets, liabilities and contingent
liabilities that meet the conditions for recognition under IFRS
3(2008) are recognised at their fair value at the acquisition date,
except that:
-- deferred tax assets or liabilities and liabilities or assets
related to employee benefit arrangements are recognised and
measured in accordance with IAS 12 Income Taxes and IAS 19 Employee
Benefits respectively.
Non-controlling interests in subsidiaries are identified
separately from the Group's equity therein. The choice of
measurement is made on an acquisition-by-acquisition basis.
Subsequent to acquisition, the carrying amount of non-controlling
interest is the amount of those interests at initial recognition
plus the non-controlling interests' share of subsequent changes in
equity.
Goodwill
Goodwill arising in a business combination is recognised as an
asset at the date that control is acquired (the acquisition date).
Goodwill is measured as the excess of the sum of the consideration
transferred, the amount of any non-controlling interest in the
acquiree and the fair value of the acquirer's previously held
equity interest (if any) in the entity over the net of the
acquisition-date amounts of the identifiable assets acquired and
the liabilities assumed.
If, after reassessment, the Group's interest in the fair value
of the acquiree's identifiable net assets exceeds the sum of the
consideration transferred, the amount of any non-controlling
interest in the acquiree and the fair value of the acquirer's
previously held equity interest in the acquiree (if any), the
excess is recognised immediately in the consolidated income
statement as a release of negative goodwill.
Revenue recognition
Revenue is measured at the fair value of the consideration
received or receivable and represents amounts receivable in the
normal course of business, net of discounts, VAT and other
sales-related tax.
Merchandising revenue is recognised when goods are delivered and
title has passed.
Gate receipts and other match day revenue are recognised as the
games are played. Prize money in respect of cup competitions is
recognised when earned. Sponsorship and similar commercial income
is recognised over the duration of the respective contracts. The
fixed element of broadcasting revenues is recognised over the
duration of the football season whilst facility fees received for
live coverage or highlights are taken when earned. Merit awards are
accounted for only when known at the end of the football
season.
Taxation
The tax expense represents the sum of the tax currently payable
and deferred tax.
The tax currently payable is based on taxable profit for the
period. Taxable profits differ from net profit as reported in the
income statement because they exclude items of income or expense
that are taxable or deductible in other years and they further
exclude items that are never taxable or deductible. The Group's
liability for current tax is calculated using tax rates that have
been substantively enacted by the balance sheet date.
Deferred tax is the tax expected to be payable on the
differences between the carrying amounts of assets and liabilities
in the financial statements and the corresponding tax bases used in
the computation of taxable profit and is accounted for using the
balance sheet liability method. Deferred tax liabilities are
generally recognised for all taxable temporary differences and
deferred tax assets are recognised to the extent that it is
probable that taxable profits will be available against which
deductible temporary differences can be utilised. Deferred tax is
charged or credited in the income statement or in the statement of
comprehensive income, where appropriate.
Brand intangible assets
The Group only carries brand intangible assets on the condensed
consolidated Balance Sheet that have been acquired. Acquired brands
are carried at cost, being estimated fair value on acquisition, on
the Consolidated Balance Sheet. Subject to an impairment review, no
amortisation is charged on those brand intangible assets which the
Board believes have an indefinite life.
The Group carries out an impairment review on the brand
intangible assets, at least annually, or when a change in
circumstances or situation indicates that those assets have
suffered an impairment loss. Impairment is measured by comparing
the carrying amount of an intangible asset with the 'recoverable
amount' that is the higher of its fair value less costs to sell and
its 'value in use'. 'Value in use' is calculated by discounting the
expected future cash flows, using a discount rate based on an
estimate of the rate that the market would expect on an investment
of comparable risk.
Player registrations
The costs associated with acquiring players' registrations, or
extending their contracts, including agents' fees, are capitalised
and amortised, in equal instalments, over the period of the
respective players' contracts. When a contract life is
renegotiated, the unamortised costs, together with the new costs
relating to the contract extension, are amortised over the term of
the new contract. Where the acquisition of a player registration
involves a non-cash consideration, such as an exchange for another
player registration, the transaction is accounted for using an
estimate of market value for the non-cash consideration. Under the
conditions of certain transfer agreements, further fees will be
payable in the event of the players concerned making a certain
number of first team appearances or on the occurrence of certain
other specified future events. Liabilities in respect of these fees
are accounted for as provisions, when it becomes probable that the
number of appearances will be achieved or the specified future
events will occur. These additional costs are capitalised and
amortised as above. Likewise, any additional assets that are
realised after selling players are recognised as debtors when it
becomes probable that the conditions in the sale agreement will be
met.
Property, plant and equipment
Land and buildings held for use in operations, or for
administrative purposes, are stated in the balance sheet at their
revalued amounts, being the fair value at the date of revaluation,
less any subsequent accumulated depreciation and subsequent
accumulated impairment losses. Revaluations are performed with
sufficient regularity such that the carrying amount does not differ
materially from that which would be determined using fair values at
the balance sheet date.
Any revaluation increase arising on the revaluation of such land
and buildings is credited to the properties revaluation reserve,
except to the extent that it reverses a revaluation decrease for
the same asset previously recognised as an expense, in which case
the increase is credited to the income statement to the extent of
the decrease previously expensed. A decrease in carrying amount
arising on the revaluation of such land and buildings is charged as
an expense to the extent that it exceeds the balance, if any, held
in the properties revaluation reserve relating to a previous
revaluation of that asset.
Depreciation on revalued buildings is charged to the income
statement. On the subsequent sale or scrappage of a revalued
property, the attributable revaluation surplus remaining in the
properties revaluation reserve is transferred directly to retained
earnings.
Freehold land is not depreciated. Leasehold property is
amortised over the term of the lease. Other fixed assets are
depreciated on a straight-line basis at annual rates appropriate to
their estimated useful lives as follows:
Freehold properties 1% - 1.33%
Motor vehicles 20%
General plant and equipment 10% - 33%
The Group capitalises costs in relation to an asset when
economic benefit from the asset is considered probable. Assets
under the course of construction are carried at cost and include
professional fees. Depreciation commences when the assets are ready
for their intended use.
Segmental accounting
IFRS 8 requires operating segments to be identified on the basis
of internal reports about components of the Group that are
regularly reviewed by the Directors to allocate resources to the
segments and to assess their performance.
The Directors have concluded that in the period to 31 December
2014 the Group has only operated in one segment, therefore no
operating segment note has been prepared.
Critical accounting judgments and estimates
In the application of the Group's accounting policies, which are
described earlier in this note, the Directors are required to make
judgments, estimates and assumptions about the carrying value of
assets and liabilities that are not readily apparent from other
sources. The estimates and associated assumptions are based on
historical experience and other factors that are considered to be
relevant. Actual results may differ from these estimates.
The principal balances in the financial statements where changes
in estimates and assumptions may have a material impact are:
Recoverable amount of non-current assets
All non-current assets, including property, plant and equipment
and intangible assets are reviewed for potential impairment using
estimates of the future economic benefits attributable to them.
Such estimates involve assumptions in relation to future levels of
income, media and sponsorship revenue and on pitch performance. Any
estimates of future economic benefits made in relation to
non-current assets may differ from the benefits that ultimately
arise, and materially affect the recoverable value of the
asset.
Non-recurring items
Items which are deemed to be non-recurring by virtue of their
nature or size are separately identified on the consolidated income
statement to assist in understanding the financial performance of
the Group.
Inventory
Inventories are stated at the lower of cost and net realisable
value. Cost comprises direct materials and, where applicable,
direct labour costs and those overheads that have been incurred in
bringing the inventories to their present location and condition.
Cost is calculated using the weighted average method. Net
realisable value represents the estimated selling price less all
estimated costs of completion and costs to be incurred in
marketing, selling and distribution. Provision is made for
obsolete, slow-moving or defective items where necessary.
Impairment of tangible and intangible assets excluding
goodwill
At each year-end balance sheet date, the Group reviews the
carrying amount of its tangible and intangible assets to determine
whether there is any indication that those assets have suffered an
impairment loss. If any such indication exists, the recoverable
amount of the asset is estimated to determine the extent of the
impairment loss (if any). Where the asset does not generate cash
flows that are independent from other assets, the Group estimates
the recoverable amount of the cash-generating unit to which the
asset belongs. An intangible asset with an indefinite useful life
is tested for impairment at least annually and whenever there is an
indication that the asset may be impaired.
Recoverable amount is the higher of fair value less costs to
sell and value in use. In assessing value in use, the estimated
future cash flows are discounted to their present value using a
pre-tax discount rate that reflects current market assessments of
the time value of money and the risks specific to the asset for
which the estimates of future cash flows have not been adjusted.
The discount rate used at 30 June 2014 was 14% (2013 - 14%).
If the recoverable amount of an asset is estimated to be less
than its carrying amount, the carrying amount of the asset is
reduced to its recoverable amount. An impairment loss is recognised
immediately in the income statement, unless the relevant asset is
carried at a revalued amount, in which case the impairment loss is
treated as a revaluation decrease.
Where an impairment loss subsequently reverses, the carrying
amount of the asset is increased to the revised estimate of its
recoverable amount, but so that the increased carrying amount does
not exceed the carrying amount that would have been determined had
no impairment loss been recognised for the asset in prior years. A
reversal of an impairment loss is recognised immediately in the
income statement, unless the relevant asset is carried at a
revalued amount, in which case the reversal of the impairment loss
is treated as a revaluation increase.
At 30 June 2014, the Directors performed an impairment review by
reference to value in use, using discounted cash flows to ascertain
the value at which the property and other non-current assets could
be supported. The discounted cash flow forecasts are prepared
using:
-- the most recent budgets and projections approved by
management for season 2014/15 to 2018/19
-- capital expenditure cash flows that reflect the cycle of capital investment required
The key operating assumptions for the value-in-use calculations
are as set out in the Group's disclosures on going concern. In
addition the value in use calculations are sensitive to the
following additional assumptions:
-- discount rate of 14%
-- long term growth rate of 2%
-- obtaining promotion at the conclusion of season 2014/15 to the Scottish Premiership
-- predictions of expected football results beyond season
2014/15 i.e. league placings; cup progressions; match day
attendances; and future European participation from 2016/17
onwards, based on previous experience of the Club.
Management estimates discount rates using pre-tax rates that
reflect the current market assessments of the time value of money
and the risks specific to the Group's one cash-generating unit
(CGU). The discount rate reflects management's view of the current
risk profile of the underlying assets being valued with regard to
the current economic environment and the risks that the football
game as a whole are facing.
The impairment review supported the carrying value of RIFC's
non-current assets of GBP64.9m, showing a value in use of
GBP69.8m.
The Group has also conducted sensitivity analysis on the
impairment test of the CGU's carrying value. The following
reasonably possible individual changes in key assumptions would
cause the CGU's recoverable amount to be equal to its carrying
amount
-- increase in discount rate from 14% to 14.7%
-- reduction in long term growth rate from 2% to 0.8%
-- reduction in season 2015/16 operating cash flows of 86%
-- reduction in average annual cash flows in seasons 2016/17 to 2018/19 9%
Share based payments
Equity-settled share-based payments to employees and others
providing similar services are measured at the fair value of the
equity instruments at the grant date. The fair value excludes the
effect of non-market-based vesting conditions
Fair values of business acquisitions
The fair value of businesses acquired, where market values are
not easily available, are determined by various valuation
techniques. In these cases, the fair values are estimated from
observable data in respect of similar businesses or models, and
third-party experts are used.
Provision for legal claims
The Group only recognises liabilities where there is a present
obligation from a past event, a transfer of economic benefits is
probable and the amount of costs of the transfer can be reliably
estimated. In such instances a provision is calculated and recorded
in the financial statements. In instances where these criteria are
not met, a contingent liability may be disclosed in the notes to
the financial statements.
3. Revenue
6 month period 6 month period
to 31 December to 31 December
2014 2013
GBP'000 GBP'000
Gate receipts and hospitality 5,700 6,256
Sponsorship and advertising 364 712
Broadcasting rights 580 296
Commercial 239 355
Retail 4,254 4,750
Other operating income 1,955 791
---------------- ----------------------------
13,092 13,160
---------------- ----------------------------
In the opinion of the Directors all business is related to one
activity and as such no segmental disclosures have been provided.
Revenue is derived entirely in the United Kingdom and is shown
exclusive of VAT.
4. Earnings per Ordinary Share
Earnings per ordinary share has been calculated as follows. No
share options or convertible shares are held within the Group,
therefore no diluted Earnings per Share calculation is
required.
6 month period 6 month period
to 31 December to 31 December
2014 2013
(Loss)/earnings for the purpose of basic
earnings per share, being (loss)/profit
for the period (GBP'000) (3,660) (4,281)
Weighted average number of shares for
the purpose of basic earnings per share 74,949,926 65,095,856
(Loss)/earnings per ordinary share (4.9p) (6.6p)
5. Taxation
Corporation tax is calculated at 21% of the estimated taxable
profit for the year.
The charge for the year can be reconciled to the profit per the
income statement as follows:
6 month 6 month
period period
to 31 December 2014 to 31 December
2013
GBP'000 GBP'000
(Loss)/profit on ordinary activities before tax (2,666) (3,534)
Tax (Credit)/Charge at the UK corporation tax rate of 21%/23% (560) (813)
Tax effect of expenses that are not deductible in determining taxable profit 63 59
Tax credit in release of deferred tax asset (28) -
Capital allowances in excess of depreciation 127 (43)
Tax losses carried forward 588 979
Tax expense for the period 190 182
The Tax charge of GBP190,000 relates to Corporation Tax incurred
on the profits of the retail joint venture net of the surrender of
losses by other Group companies. The Rangers Group tax charge
relating to its share of these profits has been reduced to nil due
to the surrender of losses.
6. Non-Current Assets - Property, Plant and Equipment
Freehold Fixtures Total
Properties and
Cost or Valuation: Fittings
GBP'000 GBP'000 GBP'000
Cost or Valuation at 1
January 2014 43,073 6,042 49,115
Additions - 53 53
------------ --------- --------
Cost or Valuation at 30
June 2014 43,073 6,095 49,168
Additions - (130) (130)
------------ --------- --------
At 31 December 2014 43,073 5,965 49,038
------------ --------- --------
Depreciation:
At 1 January 2014 624 630 1,254
Charge for period 201 579 780
------------ --------- --------
At 30 June 2014 825 1,209 2,034
Charge for period 206 399 605
------------ --------- --------
At 31 December 2014 1,031 1,608 2,639
------------ --------- --------
Net Book Value:
Net book value at 1 January
2014 42,449 5,412 47,861
------------ --------- --------
Net book value 30 June
2014 42,248 4,886 47,134
------------ --------- --------
Net book value 31 December
2014 42,042 4,357 46,399
============ ========= ========
Amounts in respect of assets of the Group held under finance
leases are as follows:
Net Book value at 30 June
2014 - 1,422 1,422
Depreciation provided
in the period - 144 144
Net Book value at 31 December
2014 - 1,162 1,162
Depreciation provided
in the period - 87 87
At 31 August 2012 the Directors valued the Freehold Properties,
comprising Ibrox stadium and Murray Park training facility based on
a value in use calculation of the net present values of future
operating cash flows. The key assumptions in this calculation are
the expected future cash flows and the use of a weighted average
cost of capital of 12.25 per cent. The value in use calculation
relates to all fixed assets of the Group, including Intangible
Assets. If required the property, plant and equipment valuation
would be capped at the depreciated replacement cost (DRC) valuation
as the stadium and training facilities are specialist assets. The
DRC valuation, which represents a combined value of GBP79.2m at 31
August 2012, has been performed by DM Hall LLP, independent
valuers, not connected to the Group. The Directors consider that
these valuations remain appropriate at 31 December 2014.
7. Intangible Assets
Player Brand Total
Registrations
GBP'000 GBP'000 GBP'000
At Cost:
Cost at 1 January 2014 3,844 16,054 19,898
Additions 26 6 32
Eliminated on disposal (272) - (272)
-------------- -------- --------
At 30 June 2014 3,598 16,060 19,658
Additions 32 1 33
Disposals (53) - (53)
-------------- -------- --------
At 31 December 2014 3,577 16,061 19,638
-------------- -------- --------
Amortisation:
At 1 January 2014 1,625 1 1,626
Charge for period 445 2 447
Eliminated on disposal (212) - (212)
-------------- -------- --------
At 30 June 2014 1,858 3 1,861
Charge for period 398 1 399
Eliminated on disposal (53) - (53)
-------------- -------- --------
At 31 December 2014 2,203 4 2,207
-------------- -------- --------
Net Book Value:
Net book value at 1 January
2014 2,219 16,054 18,273
-------------- -------- --------
Net book value 30 June
2014 1,740 16,057 17,797
-------------- -------- --------
Net book value 31 December
2014 1,374 16,057 17,431
============== ======== ========
8. Deferred Income
GBP'000
As at 1 January 2014 5,300
As at 30 June 2014 6,156
As at 31 December 2014 4,104
Deferred income comprises season tickets, sponsorship,
hospitality and other elements of income whichhave been received in
advance and will be recognised as revenue as the season
progresses.
9. Provisions for liabilities
Provision
for stock Onerous
purchase lease
obligation provision
GBP'000 GBP'000
Opening balance 411 422
Additional provisions made in the period - 198
Amounts used during the period - (620)
Unused amounts reversed during the period (16) -
Balance at 30 June 2014 395 -
============= ============
Provision expected to be payable less than one year 395 -
Provision expected to be payable two to five years - -
Provision was adjusted in the year to recognise an obligation of
Rangers Retail Limited to purchase stock at a cost higher than its
resale value for the completed season 2013/14.
An additional provision was also made for onerous lease
contracts where stores held by Rangers Retail Ltd are deemed to be
loss-making and where future losses are considered unavoidable. The
provision was calculated based on the lower of the losses incurred
if the stores continued to trade, versus the costs incurred for
rent if the stores were closed. This provision has been moved to
trade and other payables at the period-end, since its amount and
timing are now known.
10. Deferred Tax
The following are major deferred tax liabilities recognised
by the Group:
GBP'000
As at 1 January 2014 (6,798)
Deferred tax prior year adjustment in relation to depreciation
of revalued heritable freehold properties 66
Deferred tax rate change in relation of heritable freehold
properties from 23% to 20% (8)
Deferred tax change in relation to depreciation of revalued
heritable freehold properties 55
As at 30 June 2014 (6,685)
Deferred tax change in relation to depreciation of revalued
heritable freehold properties 28
As at 31 December 2014 (6,657)
The deferred tax liability arises in relation to the revaluation
of heritable freehold properties by the Group.
No deferred tax asset has been recognised in respect of
accumulated tax losses of GBP24,829,000 at 31 December 2014 (2013 -
GBP20,099,000). The directors are of the opinion that there is
insufficient evidence to support recognition of these losses as an
asset due to uncertainty of the Group generating sufficient future
taxable profits from which accumulated losses could be
deducted.
11. Share Capital
GBP'000
At 31 December 2013 and 30 June 2014
Allotted, called up and fully paid
65,096,056 Ordinary shares of 1p each 651
Share options exercised 7
Open offer of equity shares 157
At 31 December 2014
-------
Allotted, called up and fully paid
81,478,201 Ordinary shares of 1p each 815
=======
Share options
On 1 July 2014, 714,285 new ordinary shares of 1p each were
issued pursuant to an exercise of the options granted to Brian
Stockbridge (a former Director of the Company) in accordance with
Mr. Stockbridge's original contract of employment with The Rangers
Football Club Limited dated 17 September 2012.
Open Offer
On 18 September 2014, the Company raised gross proceeds of
GBP3.13m (net proceeds after costs GBP2.83m) as a result of an open
offer to existing shareholders. A total of 15,667,860 ordinary
shares of 1p each were issued at an issue price of 20p. Therefore
at that date there were a total of 81,478,201 shares in issue.
12. Share Premium
GBP'000
Opening balance at 1 July 2014 29,139
Premium arising on issue of equity shares 3,164
Costs incurred in relation to fund-raising (295)
Balance at 31 December 2014 32,008
=======
13. Revaluation Reserve
GBP'000
As at 1 January 2014 26,763
Transfer from revaluation reserve to retained earnings in respect
of depreciation (138)
Change in deferred tax from 23% to 20% 113
As at 30 June 2014 26,738
Transfer from revaluation reserve to retained earnings in respect
of depreciation (138)
Deferred tax liability relating to depreciation of components of
other comprehensive income 28
-------
As at 31 December 2014 26,628
=======
14. Notes to the Consolidated Statement 6 month 6 month
of Cash flows period period
to to
31 December 31 December
2014 2013
GBP'000 GBP'000
(Loss)/Profit for the period (2,856) (3,716)
Amortisation of intangible fixed assets 399 485
Increase in stock (16) -
Depreciation of property, plant and equipment 605 489
Profit on disposal of players' registrations (206) (140)
Financing costs 32 31
Decrease/(Increase) in trade and other receivables (60) 566
(Decrease)/Increase in trade and other payables (3,191) (3,288)
------------- -------------
Cash used in operations (5,293) (5,573)
------------- -------------
15. Related Party Transactions
During the period, the Company repaid loanstotallingGBP1.5m.
GBP0.5m of this loan was provided by Mr. Alexander Easdale, a
former director of the group company The Rangers Football Club
Limited. This loan was interest free, and was repaid on 30
September 2014.
During the period, the group company The Rangers Football Club
Limited entered into a credit facility agreement with MASH Holdings
Limited. This company is a shareholder in RIFC plc. MASH also has
an indirect holding in Rangers Retail Limited, at the time a 51%
owned subsidiary of TRFCL.
On 27 October 2014, the first credit facility of GBP2m was
agreed, for a period of six months, interest-free. The facility is
secured by standard security over the properties of Edmiston House
and Albion car park.
On 12 November 2014, an extension to this facility of GBP1m was
agreed, under the same terms.
During the period, the Group paid GBP54,000 to Keith Bishop
Associates, a company of which the former director Derek Llambias
was also a director.
16. Contingent Liabilities
Newcastle Player Loans
During the January 2015 transfer window, the Club loaned five
players from Newcastle United. As part of those contracts, should
the Club gain promotion in season 2014/15, either directly or via
the play-off method, the Club will be liable to pay a total of
GBP500,000 to Newcastle United Football Company Limited.
As this liability is based on an uncertain future event, the
Directors have not recognised this amount in these financial
statements.
Independent Investigation
On 15 April 2013, the Board of RIFC plc announced that it was
commissioning an independent examination and report relating to
allegations made by Craig Whyte, the previous owner of Rangers
Football Club plc, concerning RIFC's then Chief Executive and
Commercial Director.
A letter before claim was received by the Company from legal
advisers to Craig Whyte and Aidan Earley. The Company engaged the
services of Allen & Overy LLP to defend against this possible
claim. In addition, the non-executive directors of the Company (the
"Investigation Committee") engaged the law firm Pinsent Masons LLP
to investigate the connections between Craig Whyte and former and
current personnel of the Company and its subsidiaries (the
"Investigation").
The Investigation was overseen by Roy Martin QC.
On 30 May 2013, the Company announced that the Investigation had
been concluded on 17 May 2013 and Pinsent Masons and Roy Martin QC
have reported to the Investigation Committee. The Investigation
Committee was satisfied that a thorough investigation was conducted
despite the inherent limitations of a private inquiry.
Based on the assessment of the available evidence, the Company
considers that the Investigation found no evidence that Craig Whyte
had any involvement with Sevco Scotland Limited (now called The
Rangers Football Club Limited), the company which ultimately
acquired the business and assets of Rangers Football Club plc from
its administrators; nor which would suggest that Craig Whyte
invested in The Rangers Football Club Limited or Rangers
International Football Club plc, either directly or indirectly
through any third party companies or vehicles.
On 28 May 2013, a further letter before claim was sent to (inter
alia) The Rangers Football Club Limited and Rangers International
Football Club plc on behalf of Craig Whyte, Aidan Earley and
(purportedly) Sevco 5088 Limited. The Board is of the view that the
claims set out in the letter before claim are entirely
unsubstantiated based on legal advice received to date by the Board
and the outcome of the Investigation. This letter is now 22 months
old.
17. Post Balance Sheet Events
GBP10m Credit Facility and associated transfer of 26% of Rangers
Retail Limited
On 27 January 2015, the Club announced that it had entered in to
agreements with SportsDirect.com Retail Limited and associated
companies, to provide a long term on-going credit facility of up to
GBP10m.
The Facility is structured in two separate interest-free
tranches. GBP5m was made available immediately for working capital
purposes and for the repayment of the credit facilities with MASH
Holdings Limited which was entered into on 27 October 2014. All
rights and security associated with the MASH facility were
cancelled.
The Club transferred 26% of the share capital in Rangers Retail
Limited to SportsDirect.com for the duration of the Facility, which
will be transferred back, at no cost, upon repayment of all
outstanding sums owed by Rangers and its subsidiaries to
SportsDirect.com. There is no specified repayment period for the
first tranche of the Facility.
The Facility is to be secured by (1) a floating charge over the
Club's assets and (2) fixed charges over Murray Park, Edmiston
House, Albion Car Park, and the Club's registered trademarks. None
of the security that is being given to SportsDirect.com covers
Ibrox Stadium, which is specifically excluded and remains in the
full ownership of the Club, free from any security.
SportsDirect.com will also have the right to nominate two directors
to the board of Rangers for the duration of the Facility; any such
nomination will be subject to regulatory consent pursuant to the
AIM Rules and other regulatory bodies. If the entire sum drawn down
is repaid, the Facility will be deemed to be terminated, all
security will be released, the 26% of RRL will revert to the
Company and all rights of SportsDirect.com to nominate Directors to
the Board of the Company will cease.
The second tranche of GBP5m, which is repayable 5 years after
drawdown, would be used, if required, for working capital purposes
and is subject to due diligence by SportsDirect.com prior to drawn
down.
The Board subsequently announced on 23 March 2015 that it would
not be continuing the process of drawing down this second
tranche.
Football manager
On 12 March 2015, Stuart McCall was appointed as the interim
first-team manager until the end of the current season. The
previous management team of Alistair McCoist and Kenny McDowall
will continue to be paid during their notice periods.
Directors movements
On 25 February 2015, the non-executive director James Easdale
resigned. On 2 March 2015, the Chairman David Somers resigned.
On 6 March 2015, at a General Meeting of the Company, the
remaining directors, Derek Llambias and Barry Leach were removed as
directors. At the same meeting, Paul Murray and John Gilligan were
appointed as Directors.
On 6 March 2015, Douglas Park was also appointed as a
non-executive Director.
On 10 March 2015, John Bennett and Chris Graham were appointed
as non-executive directors. James Blair was also appointed as
Company Secretary.
On 13 March 2015, Chris Graham resigned.
Loan agreement
On 23 March 2015, the Company announced it had entered into loan
agreements with Douglas Park, George Letham and George Taylor for
facilities totaling GBP1.5m. The proceeds of the loans are
available generally for the purposes of the Company and will be
used for working capital. The loans are being made available until
31 December 2015. No interest or fees are to be charged in respect
of the facilities and the loans are being provided on an unsecured
basis.
Mr. Park, Mr. Letham and Mr. Taylor are each shareholders of
RIFC plc, owning 6.14%, 4.05% and 9.30% of the shares
respectively.
Suspension of AIM trading
On 4 March 2015 the Company's nominated adviser, WH Ireland
Limited, resigned with immediate effect. This caused AIM to suspend
trade in the Company's shares pending the appointment of a new
nominated adviser. The Company is currently investigating options
in this regard.
This information is provided by RNS
The company news service from the London Stock Exchange
END
IR VBLFXEXFLBBK
Rangers Int (LSE:RFC)
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