ferrets stock to watch: oakton limited

Ferret's Stock to Watch: OAKTON LIMITED
09:05, Tuesday, 6 March 2007

RUBBING SHOULDERS WITH THE COMPANIES THAT MATTER

Sydney - Tuesday - March 6: (RWE Aust Business News)
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OVERVIEW
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Shares of Oakton Ltd (ASX:OKN) rose strongly after the company
was among the stocks named to be joining the S&P ASX 300 index this
month.

The company is a profitable information technology company
servicing a list of impressive public companies.

It has a long history with the major development platform
vendors in the industry such as Microsoft, IBM, Oracle, Sun, and BEA.

Meanwhile, Oakton will progressively migrate the supply of
services to its recently opened offshore operation in India.

The company has announced that an existing contract with a major
global financial services company has been expanded in scope and
extended for an additional two years to April 2009.

The minimum value of the extension is about $3.4 million over
the two-year period.

The majority of the services provided under the contract will be
progressively migrated offshore over the next six months.

Commenting on the contract extension, CeO Neil Wilson said "We
are very pleased to have worked with one of our key clients to establish
this new arrangement which not only sees us retain a contract that was
heading offshore, but also to expand the scope to include additional
services and additional revenue.

"This transaction will provide a solid foundation for the
ongoing growth of our operation in India, which we opened in September
2006," Mr Wilson added.

Oakton reported a net profit of $9.17 million for the half year
to December - a 39.8 per cent increase on the previous corresponding
period.

Revenue increased by 27.2 per cent to $47.02 million and EBITDA
increased by 34.8 per cent to $13.17 million during the period.

The strong increase in earnings was achieved through continued
organic growth and the contribution from Clickstream which was acquired
in August.

The operations of Clickstream were fully integrated into Oakton
during the period and synergy benefits have already been realised.

SHARE PRICE MOVEMENTS
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Shares of Oakton fell 18c to $4.06 yesterday. Rolling high is
$4.85, the same as the all-time high, and low is $2.90. Dividend 19.25c
to yield 4.54 per cent. Earnings per share 20.6c while p/e ratio is
20.58. The company has 84.1 million shares on issue with a market cap of
$356.7 million.

In September Oakton's Indian operations were established in
Hyderabad.

The Indian operations are a key component of Oakton's strategy
and, where appropriate, provides offshore delivery capability with
increased access to skilled resources at a price point competitive with
global providers.

The Oakton Board declared a fully-franked interim dividend of
10c a share, 33.3 per cent higher than last year's interim of 7.5c.

The dividend will be paid on March 30.

Mr Wilson said, "Oakton has a solid business strategy on which
we have remained focused.

"It is very much a situation of our preparation and strategy
aligning well with good market conditions that is allowing us to grow
ahead of the overall market rate.

"We have an exceptional team very focused on both the quality of
what we are doing today and the implementation of the initiatives
supporting the ongoing growth of the business.

"Our underlying business continues to perform strongly and is
complemented with expansion into new and existing interstate locations,"
Mr Wilson said.

"The Brisbane office, opened during 2006, is on track to have 20
staff by June 2007 and is acquiring state government, local council and
industry clients.

"Establishing operations in Canberra is planned for sometime in
FY08.

"Our acquisition strategy and pipeline remains strong and is seen
as a vehicle for accelerating the achievement of many of our growth
initiatives through the expansion of our existing location client base,
entry into new locations, accessing additional staff, expansion of
existing services and the addition of complementary services."

BACKGROUND
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Oakton Ltd is a profitable information technology company which
listed on the Australian Stock Exchange on June 2, 2000.

The company has provided information technology solutions for
large and medium sized organisations for more than 18 years.

Oakton offers a range of IT services centred around business
systems.

The services cover strategy and planning consulting, delivery
services in solution design, custom software development, packaged
software implementation, information management and system integration
solutions.

Oakton also provides a service offering to fully manage
organisations' operational systems.

The company has offices in Melbourne, Sydney, Brisbane and
Hyderabad (India).

Oakton provides specialist end-to-end IT services to plan,
deliver and run business systems.

It has consistently enabled some of Australia's largest
organisations to meet their technology and business needs with a
flexible, cost-effective, results-driven approach to service delivery.

With a national coverage and over 500 permanent employees,
Oakton offers a range of services across the lifecycle of systems and
across a range of different technology and industry sectors.

Oakton does not develop and sell product, it does not sell
hardware or network solutions.

However, the company does have a strong partner network with
leading global and local product companies - this supports a sharp focus
on the provision of services that support the successful delivery of
business system solutions for customers.

Oakton views service provision as the combination of highly
skilled resources, relevant and proven service delivery methods and
frameworks, and a strong focus on project delivery governance.

ENDS

Copyright © 2007 RWE Australian Business News. All rights reserved.