Menu
Oakton FY11 profit slumps 35%

Oakton FY11 profit slumps 35%

IT service provider Oakton (ASX:OKN) has reported profit and revenue declines for FY11, blaming the under-performance of its Victorian operations

IT service provider Oakton (ASX:OKN) has reported a 35 per cent slump in FY11 profit, due to litigation costs and a worse than expected showing at its Victorian business.

The company reported profit of $13.1 million for the financial year. Excluding litigation costs associated with the recently-resolved contract dispute with Tenix Solutions, profit would have fallen 20 per cent to $16.8 million.

Revenue dipped 1 per cent to $183.9 million when accounting for a portion of the $15 million settlement payment from Tenix, but excluding these proceeds the decline would have been 5 per cent.

Oakton CEO Neil Wilson said the FY11 results “have not met expectations.” He blamed a significant under-performance of the company's Victorian operations, as first flagged in its 1H results.

But he said a turnaround program initiated in the state as a response had made progress, leading to improved results by the final quarter.

Market share had increased at its other Australian offices in Canberra, Sydney and Brisbane, although the NSW business missed expectations in the final quarter. Oakton also has a presence in Hyderabad, India.

Commenting on prospects for the current financial year, Wilson said “we have built a reasonable level of committed revenue and a solid pipeline of potential revenue as we enter into FY12.”

OKN shares fell 3.51 per cent on Tuesday to $1.785.

Join the CIO Australia group on LinkedIn. The group is open to CIOs, IT Directors, COOs, CTOs and senior IT managers.

Join the newsletter!

Or

Sign up to gain exclusive access to email subscriptions, event invitations, competitions, giveaways, and much more.

Membership is free, and your security and privacy remain protected. View our privacy policy before signing up.

Error: Please check your email address.

Tags financial resultsOakton

More about Tenix

Show Comments
[]