Oakton has predicted the good times will keep rolling through 2009 for Australian IT services companies like itself, which have faced a roller-coaster ride on the Australian Stock Exchange over the past year due to the international credit crunch.
Oakton CEO Neil Wilson said analysts, citing the global credit crunch and a general economic downturn, had been over-cautious with regards to the prospects for local IT services companies.
But Oakton today posted record annual revenues, up 75.3 per cent to $201.3 million, with net profit up 34.6 per cent to $27.6 million. The results were proof, Wilson said, that the IT services sector could withstand the downturn.
"Many commentators ... are predicting a sharp spending slowdown," he said. "This has seen many IT service stocks, ours included, fall more than 50 per cent in recent months.
In order to understand why we have a different view, it is important to recognize that today's IT services space is unlike that of a few years ago. The really big shift in our space is how business strategy ... now sets the technology agenda."
"Clients no longer are content with cost-savings from off-the-shelf technologies, or low-cost, volume-based outsourcing deals," he continued. "They are seeking to innovate and gain real competitive advantage. It is important to understand the implications of this for the IT spend, what once was a discretionary purchase is now viewed as an essential and vital investment."
Wilson also expects the Federal Government will ramp up its investment in ICT in the coming months. "Change programs being formulated following the recent 2007 election are expected to be converted into projects," he said.
Over the last six months, Oakton's share price has dipped from a high of $4.20 to a low of $2.56 per share. In the last month they have improved marginally to around $3.30.
Shares closed a solid 36 cents higher after the announcement today.