Rangers are enjoying a great domestic season, despite cost-cutting
Rangers have announced half-year profits of more than £13m, thanks mainly to Champions League involvement.
The club's turnover for the six months to December 2009 rose by £17.7m to £37.8m, with a reduced wage bill for players also contributing.
In the same period of 2008, Rangers made a loss of £3.9m.
However, the Ibrox club's debt stands at £31m and chairman Alastair Johnston warned that the "future outlook remains fraught with challenges".
He told BBC Scotland: "I am very pleased. The club has to recover financially before we can progress. We are well on our way to doing that.
"Back in August we knew we had a business plan that we had to adhere to in respect to the bank. The club from top to bottom has performed amazingly well.
"Paying down the Lloyds debt is not a priority for us because, as I said at the AGM, our arrangement with Lloyds is to pay them down £1m a year and we do that pretty effectively."
Among the challenges facing Johnston and the Ibrox board is renegotiating contracts with players seeking to extend their current deals.
Star striker Kris Boyd is among those who will be out of contract at the end of the season.
The board appreciates the understanding of Lloyds TSB Bank plc in supporting our initiatives to stabilise the club
Rangers chairman Alastair Johnston
Net operating costs decreased by £3.6m to £21m, reflecting savings made by an internal efficiency drive, including players' salaries.
And Johnston, who flatly denied the possibility of the club going into administration, said: "Discussions continue on various contract extensions, although a balance has to be struck between value and player expectation."
Another issue facing the club is prospering with fewer players, and making money from transfers.
"Operating with a smaller squad size will be more routine in the future," said Johnston.
"Player transactions and how we buy and sell players will be fundamentally more important than it has been in the past.
"We're going to rely on player transactions as we move forward as part of our funding source."
Majority shareholder Sir David Murray, who relinquished his chairmanship and place on the board in August, has been looking to offload his 90% stake in the club.
With no buyer on the horizon, Johnston added: "When I assumed the chairman's role, I realised we had to take a short-term perspective on the business model that we needed to adopt for the financial year through to June 2010.
"The board appreciates the understanding of Lloyds TSB Bank plc in supporting our initiatives to stabilise the club without totally compromising the ability of the management team to field a competitive squad of players.
"We continue our efforts to source a capital injection into the club to fuel the ambitions of the staff, supporters and shareholders."
And on the subject of finding a buyer for the club, he told BBC Scotland: "The fact that we have this recovery along the road makes us a better target than maybe nine months ago."
Rangers currently enjoy a 10-point lead in the championship race, are in the final of the Co-operative Insurance Cup and remain in the Scottish Cup.
The European campaign ended in disappointment, with the Scottish champions yielding only two points from their six matches.
But despite the failure on the pitch, Johnston insists the money from involvement in European football is essential to Rangers.
"It is such a big difference in terms of your budgets and the resources you can rely on, to qualify for the Champions League," he said.
Manager Walter Smith, whom Johnston says will be the one who determines if he will still be at the helm next season, has guided the club into a strong position to clinch Champions League involvement for 2010/11.
But the chairman is wary of relying on the income that this would create.
"The most important thing is to get through this season," he said.
"We are not taking anything for granted. I don't want too many distractions with respect to what the team is doing because the job is not done yet."
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