Rangers chairman David Murray has warned that the club will have to tighten its belt despite announcing record turnover for the last year.
The Glasgow club released their annual financial report today which shows they generated best-ever revenues of £64.5m (€81m) for the 12 months up to June 30, 2008.
Last season the Light Blues reached the UEFA Cup final in Manchester where they lost to Zenit St Petersburg.
They experienced disappointment in the Clydesdale Bank Premier League, where they finished second, but won both the Scottish Cup and CIS Insurance Cup.
According to figures released today, the club’s relative success on the pitch has enabled them to reap the financial rewards off it.
Last year’s turnover was an increase of £22.7m (€28.5m) on the figure of £41.8m (€52.5m) for the previous 12 months.
However, the report also shows that net operating expenses increased by 32% to £56.8m (€71.3m) and that the club’s net debt now stands at £21.6m (€27.1m), an increase of just more than £5m (€6.28m) from last year.
Finance director Donald McIntyre claimed the reason behind the increase in debt was the club’s expenditure on higher wages and transfer fees.
The good news of a record turnover was tempered, however, by the knowledge that next year’s financial results are likely to be much worse following the club’s failure to make it past the qualifying stages for the Champions League this season.
The two-leg defeat to FBK Kaunas left Gers without even the comfort of a place in the UEFA Cup.
“These results reflect what was a remarkable and historic year for the Club both on and off the park. We should be very proud of our collective achievements,” said Murray.
“Our participation in European and domestic cup competitions obviously contributed greatly to our record turnover and it is encouraging to report a substantial net profit.
“The increase in turnover also highlights the necessity for Rangers Football Club to qualify for Europe to meet the overheads that exist to run a club of our size.
“Existing levels of expenditure cannot be maintained in the current economic climate and, as we look to the future, it is becoming more important to focus on the development of young players to ensure the long-term sustainability of the club.
“I genuinely believe we are now seeing a steady stream of young talent emerging from Murray Park, and will continue to do so.
“We were delighted with last year but extremely disappointed not to qualify for Europe this year.
“We have, however, re-grouped and invested as promised in the playing squad and I know that we can count on our fans’ support as we strive to bring the league title back to Ibrox.”