Monday 17 December 2018

PCH needs to raise funding to meet debts, warn auditors

PCH founder Liam Casey
PCH founder Liam Casey
Gavin McLoughlin

Gavin McLoughlin

Liam Casey's PCH needs to raise fresh funding to meet its debts, according to its auditors KPMG.

KPMG said there are "material uncertainties which may cast significant doubt on the company's ability to continue as a going concern".

KPMG's comments were made in fresh Companies Registration Office filings from PCH-parent Amekab.

The KPMG audit report, dated April 30, 2018, says that the PCH group is "required to raise additional funding in order to meet its obligations as they fall due".

"The group is in the process of a number of fundraising initiatives with various parties in order to achieve this," KPMG says.

PCH is an unlimited company and therefore does not have to file detailed financial statements.

However, KPMG said in its report, which covers the year ended December 30, 2016, that the company had made a net profit of $45.8m (€39m) in the period.

That compared to a net loss of $87.2m the prior year.

The 2016 shareholder's deficit - the difference between the company's liabilities and assets - was $15.4m, compared with $57.4m in 2014.

PCH raised $28m in equity in March - eight weeks before KPMG's report - and told the Irish Independent it is close to completing a "modest amount of debt financing" in the mid-single digit millions, adding that it is "satisfied with the funding options available".

The company is a manufacturer and designer of products for some of the world's biggest companies. It has recently shifted strategy to expand into so-called "connected hardware" - items like watches that are connected to the internet. "The business has grown by 35pc annually in that period and has focused on the health, beauty and luxury sectors," PCH said.

Around the time of the strategy shift the company announced plans to lay off around 1,500 staff. It had reportedly lost a contract with Apple around that time. PCH said its financial results were affected by one-off costs related to the restructuring.

Meanwhile, a report in Japanese financial daily 'Nikkei' said Apple expects to ship 20pc fewer new iPhones this year, compared to what it had planned at this time last year.

Apple has asked suppliers to make about 20pc fewer components for the three new iPhones it plans to launch in the second half of 2018, compared to last year's plans for its iPhone X and iPhone 8 models, the paper reported.

The report added to concerns that consumer passion for new editions of the iconic smartphones may be cooling after years of scorching growth, sending shares in Apple and many of its major suppliers lower and weighing on global stock markets.

"This news needs to be viewed in the context of Apple probably being overly optimistic last year in relation to the prospects for its new phones, leaving it with excess inventory in the first part of this year," Atlantic Equities analyst James Cordwell said.

"At least part of this lower order forecast probably relates to Apple just being a little more realistic."

Apple shares fell as much as 2pc on the report, while those in suppliers AMS and Dialog Semi sank 6pc and 4.1pc respectively.

Analysts say the high price of the iPhone X - which sells for $1,000 - is muting demand.

Irish Independent

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