Still in her early thirties, Elaine Coughlan is one of the youngest, and counts among only a handful, of female finance directors in the London Stock Exchange’s hard-hit IT hardware industry.
But the hardworking chief financial officer of Irish mobile-internet semiconductor intellectual property provider Parthus, is not put off by the challenge as she steers the company through the economic downturn gripping the market.
‘It has been a long haul,’ she laughs. The chartered accountant admits she has ‘never known anything but busy’ and is ‘very performance-oriented’.
Coughlan qualified as an accountant at 18 and went into practice at Ernst & Young aged 20.
In 1997, she left the Big Four firm after eight years of service and decided to go into industry, joining one of E&Y’s clients, Nasdaq-listed Iona, as an audit director, helping with the company’s initial public offering.
Of the challenges she faced at Iona, Coughlan says: ‘The time post-IPO is probably more stressful and more difficult than that leading up to it. Growing a public company, getting into the quarterly treadmill of reporting to the markets, media, analysts and that whole new community you have to address is challenging.
And internally you have to manage the systems, reporting structures, a management team and start growing the business itself. That’s much more challenging and more interesting than an IPO itself.’
Two-and-a-half years later, she was recruited to be vice-president of the finance function at Parthus. Fortunately she had experience with the company, as she had done due diligence for a venture capitalist wanting to invest in it. They were planning to go down the IPO route, an area in which Coughlan had considerable experience.
Again, she had to roll up her sleeves and get to work straight away, as the company wanted to float on the stock exchange and change its business model.
‘That meant vamping up the business, bringing on a management team, preparing the company to go public, going out on a roll and starting to meet investors.’
She helped build up the finance team, as the existing accounts department was very different from that required of a publicly listed company. ‘You need very good forecasting skills,’ she explains. ‘You need finance support for the business decisions, you need budgets, sales forecasts. You need profits around all of those. You need to be able to close within 20 days.
You have to put in all of those practices and processes and that takes time.
‘You need the people and you need to change behaviours. You need to move away from the finance department being an accounts department to being a finance department, which supports the business,’ says Coughlan.
Like most FDs, Coughlan believes the finance department has to be a core part of the management team to be really meaningful and successful.
‘My team was centrally involved in a lot of the business unit’s decisions, helping them see the financial implications of their decisions and stay on target.’ And despite a tough year the company continues to meet expectations.
According to analysts, Parthus, for a relative newcomer, is showing maturity beyond its years.
Tough market conditions
But it still has a struggle on its hands. While conditions in the semiconductor industry stabilised in the first half of the year, it is impossible to predict the timing of any significant recovery.
Sales in the three months to 30 June were $10.8m (£7m), up only a smidgen on the first quarter. But the loss of $2.3m was better than expected and well beneath the $3.3m loss of the first quarter.
Still, Coughlan is riding the wave. She was made CFO in 2001, following six months preparation in which the role gradually changed and she became involved in road shows. She was also involved in investor relations and dealing with analysts and shareholders.
‘I think one of the important things with any transition is that it is seamless, so that it isn’t a surprise to either the market or the person,’ Coughlan adds.
Since the dotcom crash, IT hardware has been struggling to remain afloat.
And although Parthus has had a battle on its hands, it has stayed afloat.
‘It’s a very challenging environment, but with the portfolio we’ve had, we’ve been able to continue to maintain revenue growth and at the same time be very prudent on costs,’ she explains.
‘You always have to be ahead on forecasting and deciding when to change tact. You’re only able to do that if you’re on top of the business in terms of what the numbers are.’
And the company has done just that. In its interim results in July, Parthus reported a rise in total revenues of £1.6m and reduced costs of nearly £2m.
She says: ‘While the semiconductor operating environment remains challenging, the combination of continued licensing growth, up 29%, and a strong increase in royalties and prudent cost management with operating costs down 23% year-on-year has enabled us to achieve pro forma profitability one quarter ahead of stated objectives.’
She adds the only way to survive is by adapting to the circumstances and constantly reinventing and repositioning yourself.
An unusual position
But she said Parthus was in the rather unusual position that its customers were also its competitors as the company develops and licenses silicon and software intellectual property platforms to power the computing, communications, and content requirements of next generation mobile internet devices.
She says the customers can either make the platforms themselves and pay for the license or buy a one already developed by Parthus.
And despite continuing research showing how hard it is for women to break through the glass ceiling and match their salaries to those of their male counterparts, Coughlan claims to have seen little or no evidence of sex discrimination in the sector.
She says she is surprised to hear of the small proportion of female FDs, claiming the technology sector is very open and performance-driven. ‘Here, and at Iona, it’s very much a question of: if you can do it, you’re allowed to do it,’ she states.
But she concedes there are still major hurdles that women must overcome especially when children are brought into the equation.
She adds: ‘For women it’s very challenging where you have families and children. Industry is only now become more worker-friendly. It is changing, but it’s slow gradual change.’
‘I have found to date that you’re judged on your results – positively or negatively – and on performance. You will get there, particularly with open-minded companies. You have to show that you’re at least as good as the best of them.’
But it is not all work and no play for Coughlan. She loves sports, in particular scuba-diving, and was glued to the World Cup over the summer.
At her home in the Wicklow mountains, with her husband and her dogs, she is able to get away from the hustle and bustle of busy Dublin.
And despite being young and successful, Coughlan remains level-headed.
‘I always like to say ‘you’re only as good as your last mistake and I like to remember that,’ she jokes.
Does Darwin's theory apply to taxation? Colin ponders...
The EC has been instructed to draft a European Union (EU) directive authorising an EU financial transaction tax, which would apply to ten of the EU’s 28 member states
Accountancy watchdog the FRC has dropped its investigation into the former chief financial officer of Tesco, nearly two years after the supermarket was engulfed in an accounting scandal
Colin imagines how Apple's logo might change in the wake of the EC's ruling over its Irish tax arrangements