PCH revenues up by 34% on 2008

PCH, THE Irish company which sources and supplies electronics and telecommunications products for some of the world’s best-known brands, had revenues of $152.6 million in 2009, an increase of 34 per cent on 2008.

It also posted a profit of $1.4 million before tax.

This compares to a pretax loss of $4.3 million in 2008.

Trading has been extremely strong so far in 2010, according to Liam Casey, managing director and founder of PCH, adding that revenues for the full year are expected to reach $380 million.

The accounts for Amekab, the holding company in the PCH group, show that operating expenses were relatively flat at $22 million last year up from $21 million in 2008.

The company has a gross product margin of 16 per cent.

“It’s an asset-light business so the top line will scale much faster,” Mr Casey said, although he declined to comment on what profit the group might post this year.

PCH has significant operations in China, primarily at its base in Shenzen, as well as offices in Ireland, South Africa and the United States.

It operates what Mr Casey describes as a “lean supply chain” for its customers who outsource the sourcing, manufacturing and delivery of certain products and accessories to the firm.

Mr Casey said that the number of firms looking to outsource these functions to China was growing rapidly and PCH may consider raising finance for expansion.

One of the options at which the company is looking is a flotation on the Hang Seng stock exchange in Hong Kong in about 18 months.

“They understand the model we operate better than anywhere else,” said Mr Casey.

“The additional funding would enable us to scale and take on bigger bits of business,” he added.

However Mr Casey, a former winner of the Ernst Young Entrepreneur competition, said this was just one funding option and he would not rule out taking on further venture capital investment.

In 2008, PCH raised $21 million from leading Silicon Valley venture capitalists Lightspeed Venture Partners, Norwest Venture Partners and Focus Ventures.

Mr Casey said he welcomed the increases in wages that followed a spate of suicides at the Foxconn manufacturing facilities in Shenzen earlier this year.

“We are not in China because it is cheap, but because it is the only place to make these goods,” he added.

Increases in local manufacturing wages are seeing a rapid growth in the local market for electronics.

Mr Casey said PCH recently won its first major contract to supply products to the domestic market rather than for export.

The accounts for Amekab state that it now employs 338 professional staff in seven countries worldwide as well as 606 warehouse and operations staff in China.

Despite having taken external investment, Mr Casey still holds 53 per cent of the company that he founded in 1996.