ASX-listed services provider, Oakton (ASX:OKN), has reported a dramatic drop in net profits for the first half of the financial year.
In a statement to the ASX, the company reported net profit after tax slumped to $6.41 million, a drop of 48.7 per cent. The figure included write downs of $4 million and redundancy payments of $1.2 million. Revenue, however, was up 3.6 per cent on the corresponding period last year, hitting $98.09 million.
The poor showing was attributed to reduced Federal Government demand and the impacts of the global financial crisis. The reasons echo those listed by fellow ASX-listed integrator, ComputerCorp (ASX: CZP), which blamed slower sales across Federal Government and Western Australia for a drop in half-year revenue.
In the six months from June to December, 2008, the Oakton also cut 90 staff to end the year with a head count of 1199. It has an operating cash flow of $13.2 million.
In the statement to the ASX, Oakton CEO, Neil Wilson, said the services provider was undergoing an “extensive operational review” to improve profits and had suffered from delayed projects and clients looking for pricing changes.
In January, Oakton downgraded its profit estimates for the first half of the financial year after six months earlier posting record revenues of $201 million for the 07/08 financial year with a 75 per cent year-on-year increase.
Oakton representatives had not returned calls at the time of publication.