Oakton posts big profit jump while Melbourne IT shrugs off strong $A

IT services group Oakton is hopeful that IT spending will remain robust this year and plans to hire 200 new staff after posting a 35% increase in net profit for 2007-08 to $27.6 million.

IT services group Oakton is hopeful that IT spending will remain robust this year and plans to hire 200 new staff after posting a 35% increase in net profit for 2007-08 to $27.6 million.

Revenue climbed 75% during the period to $201.3 million, thanks in part to a full year’s contribution from Acumen Alliance, the Canberra-based service firm Oakton acquired in April 2007 for $35 million.

The company boosted staff of 286 to 1289 in 2007-08, with half of the new staff hired at the company’s Indian operation.

Oakton chief executive Neil Wilson says this year’s hiring plan is part of a broader strategy to concentrate on organic growth after the Acumen deal. But while he is confident about the outlook of IT spending in the year ahead, he says market conditions remain very choppy, particularly in the financial services sector and sectors reliant on consumer spending.

“We’ve segmented out market and our selling activities around the areas we think are going to hold up – the government and infrastructure areas particularly.”

He is paricularly confident about the government sector, which now accounts for 37% of Oakton’s client base following the Acumen acqusition.

“The federal government is going through a lot of post-election reviews looking at where they will spend but we think it’s a matter of timing. We’re confident the demand will flow.”

Meanwhile, domain name giant Melbourne IT says it is still on track to post a 10% increase in pretax earnings for calendar 2008 after posting a 20% increase in net profit to $7.8 million for the six months to 30 June.

Chief executive Theo Hnarkis said the result was “pleasing, especially in the context of a

strengthening Australian dollar, US dollar exchange rate, a slowing global economy and an increasingly competitive market for IT services worldwide.”

The strength of the Australian dollar was a particular drag on the result, as it wiped an estimated $4 million off the company’s revenue.

The number of domain names Melbourne IT has under management increased 17% during the period to six million.

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