Rangers interim accounts show £3.5m losses amid ticket warning
Rangers have reported losses of £3.5m in the six months to 31 December and been warned by their accountants that a possible fans boycott could jeopardise their ability to keep trading.
Supporters, though, still intend to seek security over Ibrox and Murray Park in return for releasing season ticket funds.
Auditor Deloitte has issued its warning in light of that threat.
Interim accounts show cash reserves of £3.5m, down from £21.2m.
Rangers described the latest results as "encouraging" and insisting that they "show growth".
The £3.5m loss was down from £7.2m for the seven-month period to the end of the previous year.
It was helped by a new retail deal with Sports Direct, but staff costs remain high, at £7.5m.
The financial results arrive following criticism of the board by fans groups and former Rangers director Dave King.
King has suggested supporters put their money into a season ticket trust fund until the board provides answers over the club's future.
Rangers chairman David Somers said the proposed withholding of season ticket money had caused "material uncertainty". Supporters, though, will press ahead with their plans to set up a trust fund for the season ticket renewal money.
"We are certain that not a single one of the 6,500 fans, and counting, who have so far shown interest in the idea of a season ticket trust have any wish to withhold any money from the club," said a statement from the Union of Fans, a coalition of supporters groups.
"However, it would be foolhardy for fans to once again commit their money without any kind of transparency or security.
"The fans have shown outstanding loyalty and commitment in the past two years, both via the IPO and two sets of unprecedented season ticket sales, but we have seen that loyalty thrown back in our faces as money has been squandered.
"Mr Somers acknowledges how vital season ticket cash is and the need for the board to build trust with the fans.
"What better way to do that than to give security over vital club assets - Ibrox and Auchenhowie - to the fans in return for that much needed income?
"The board have publicly stated that they have no plans to use these assets for any other security, or a sale and leaseback, and so there is no impediment to them agreeing to the terms of release.
"For the avoidance of doubt, there is no plan to drip feed season ticket money on a game-by-game basis.
"The proposal is simply that season ticket money is paid in a lump sum, prior to the start of the season, in return for security over club assets."
There is no indication in the interim results, though, as to why the board sought a £1.5m loan from two shareholders in February, with the money required for working capital.
At the annual meeting in December, the chief executive Graham Wallace claimed that there was "sufficient cash in the business to fund the ongoing needs of the club in the near term".
Rangers' interim accounts show that, in December, about £1.7m of their £3.5m cash reserves related to money that is "not immediately available as working capital".
"We note interim results which show a drop in revenue excluding the Sports Direct deal, a failure to address operating costs during the period to December 2013 and doubts over the cash position of the club going forward," said the Union of Fans.
"The most important issue, and one which highlights the obvious need for substantial investment, surrounds the cash position of the club both at this present moment and at the AGM last December.
"The CEO, Graham Wallace, stated at the AGM that there was 'sufficient cash in the business to fund the ongoing needs of the club in the near term'.
"It appears from both these interim results and the recent loan of £1.5m from shareholders that this statement at the AGM may have been somewhat misleading.
"It is unclear exactly how it could have been stated by the board at that time, with any confidence, that there was sufficient cash even for the short term and we would like Mr Wallace and Mr Somers to explain this as a matter of urgency."
However, the club are planning on the basis that they will receive season ticket funds at the usual time of this year, planning for more ticket sales and at a higher price.
Somers and chief executive Graham Wallace both believe that the financial situation can be improved.
Wallace said: "I am encouraged with the improved trading performance for the period under review, which shows growth over the prior year.
"However, we continue to deal with the impact of the previous short-term focus on managing the business - in particular, the management of cash and resulting cash outflows since the IPO.
"We have recently addressed the short-term working capital requirements of the club and will continue to address the longer-term financing needs as part of the wider review of the business."
Wallace said there were still "many legacy issues" and "many challenges ahead".
"However, I am pleased to report that we are making good progress in repositioning the club and business to be capable once again of challenging at the top levels of domestic and European competition," he added.
"With the continued support from Rangers shareholders and supporters, together with a strong sustainable business plan, we are putting in place the foundations for a period of long-term success and financial stability."