Philip Johnston profile - It has been great fun
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S3 Interactive founder on building a business
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When someone describes running their own business as feeling like scoring a hat-trick in a World Cup final it is clear they enjoy what they are doing.

Even though Philip Johnston has spent a fair bit of his time recently on planes and in airports trying to finalise deals to buy other companies he hasn't let the travel grind away his enthusiasm.

There's no sense of him suffering from fatigue as he sits down with a cup of coffee in a conference room inside S3 Interactive's headquarters in Clydebank.

The company, which recycles mobile phones and other consumer electronic devices, has grown rapidly since Johnston started it in 2004.

From £1m in sales in its first year turnover is now around £17 million with the target for 2012 pencilled into the business plan at £25 million.

The grey haired 42-year-old, wearing an open necked blue shirt and pinstripe suit, has no intention of slowing down.

He said: "It has been a lot of fun and we have a cracking team.

"The strategy for the next two years is to build a s30m business and acquire some other companies.

"We have kept quite a bit of cash in the business and the balance sheet is strong.

"So we can either sit where we are or do something with that cash and take the business forward."

One of the deals he is working on would expand S3 into a new area and the other he is still keeping under wraps.

But he is confident both acquisitions will come off and help the business break the £30 million sales barrier by 2013.

He said: "We always try to change the model and bolt on acquisitions as people will copy your services.

"The television and consumer electronics company we are about to buy gives us access to different brands and manufacturers.

"We can then do bulk computer monitors and the likes. We work with a lot of insurance companies and there are a lot of consumer type contracts where there are TVs which need repaired in bulk.

"So the acquisition deal gets more knowledge into the business as 80 per cent of what we do is mobile phones.

"Mobiles are where we are at just now and we are into tablet computers as well but we have to have an eye on the future."

Johnston believes staying ahead of that curve is crucial to the business continuing to grow.

Last year he snapped up EOS OEM which was a circuit board and electronics design business in a neighbouring unit in Clydebank Business Park.

He jokes he "wanted the space anyway" but the staff and premises of EOS now form the research and development arm of S3.

This has taken the business into the recycling of plastics and other components.

To illustrate why this is crucial Johnston brings out his iPhone and taps its casing.

He said: "Plastics on phones are becoming more and more complicated. The iPhone4 is toughened flexible guerilla glass which is the same as the nose cone of the Eurofighter plane.

"That rear housing and front housing with the LCD is about £150.

"The sub assembly and parts of phones are now more expensive than the phones I launched the business with five years ago.

"So when we bought EOS we thought we should design solutions for our customers so we are not just putting brand new bits in and throwing these other bits in the bin.

"It was a case of lets recover everything we can, save the customer money and add a lot of value. "When you are doing repair and refurbishment then if you can do it for less than someone fitting brand new parts and it is more environmentally friendly then it makes a lot of sense.

"It has been a great acquisition and we are doing a lot of work on iPads, tablet computers and set top boxes."

Still even with lots of innovation the company can only prosper and survive through the volumes of product it can process.

So while it has several customers in the UK S3 has a sales office in Holland and works for companies across Europe.

Johnston, whose partner is from Las Vegas, is also "experimenting" in the US market at the moment.

He said: "We have to chase a lot of big brands but I have been in the industry a long time so have some relationships with some senior people.

"From the start of S3 I was conscious of getting off the island of the UK and into Europe.

"We definitely cast our net a little bit wider. I say to the sales team just jump on a plane and see someone. It only costs a couple of plane tickets and a hotel room.

"So we work with companies in several European countries then air-freight the goods back here to Clydebank.

"So all the work is being kept here in Scotland."

More than 60 per cent of the phones S3 takes in and refurbishes are then sold on to the Asian market.

Johnston said: "They want western brands in Asia. It might not have to be the latest model so they will take a handset which is a few months old.

"That tends to be what we get. Something which has been stood on, crushed or dropped in a puddle then we bring it back to life, fix it and sell it."

While the scope of the business may be increasingly international Johnston is keen to keep building its operations in Scotland.

Fortunately he believes there is more than enough talent here to fulfil his growth ambitions.

He said: "There are a lot of good people from the Silicon Glen days when you had Hewlett Packard, Compaq, Motorola and Flextronics.

"They have all moved stuff overseas so when you put an advert out you might find someone with a HNC in electronics has been working in a call centre but they still have brilliant skills.

"Computers are still built on the same technology, it just gets smaller so you just have to familiarise them with the phones.

"But this is a great place for building businesses."

Indeed S3 hired 25 people in December last year as the pace of orders was ramped up. Then last month a move was made to put the majority of the staff on to shift work.

Johnston quips it was getting so busy that even when you opened a fridge you would find someone in there repairing a phone.

He said: "We were absolutely flat out in December. I just thought there was no point in switching off the place after eight hours every day.

"So we gave the staff lots of notice and asked them what patterns they wanted then moved on to 7am to 3pm and 3pm to 11pm shifts in January.

"So now half the place is empty as you would expect but mentally in my head and for our sales team it means there is now capacity to fill.

"Obviously we are not going to go and double the workforce straight to 200 people but we have the space to do that."

Although his days of spending time in the repair shop mending components are long gone Johnston maintains that background is crucial.

He said: "Having a technology background is a definite advantage as you understand the whole business.

"It is a technical sell for us when we go to customers. They are not looking for a slick salesman.

"You have to talk to them about problems and know how the industry works.

"Then you tell them how you can solve it but they know in five minutes whether you know what you are talking about."

Career cv

Philip Johnston started his career straight from school working in a Motorola service centre in the Govan area of Glasgow fixing police radios and walkie talkies.

During his time at Radioscan Motorola launched its first mobile phone and soon Johnston was heading up a service centre for the whole of Scotland.

Next there was a spell fixing faulty phones from the Motorola plant in Bathgate.

Then Johnston moved and was part of the team which built up DX Communications alongside Richard Emanuel, John Whyte and Chris Gorman.

Johnston was running the service centre for DX when the directors bought an insolvent business called Westwood Communications in Clydebank Business Park.

The ambitious Johnston made a case to run the repair service as a separate business and win contracts from other retailers such as Carphone Warehouse.

He led Westwood, which later became Total Repair Solutions , from £300,000 in sales to £15 million and a staff of 280 people.

However he only owned five per cent of the company and decided he wanted to do something on his own.

So he took six months off in 2003 to plan his next move before launching S3 Interactive with £500,000 of funding including £50,000 of his own cash.

The business now has turnover of £17m and 100 staff.