Consulting and IT services provider Oakton Limited (ASX:OKN) has reported a 5.5% decrease in 1H12 profit to $6.9 million, as a result of declines in revenue and margins.
Revenue for the half-year fell 7.2% year-on-year to $85.4 million, with gross margins declining to 22.06% of total revenue from 23.67%.
OKN shares fell 12.69% in Tuesday's trading to $1.170 after the results were announced.
Oakton managing director and CEO Neil Wilson blamed the profit slowdown on “softening...market conditions” as well as “the [domestic] impacts of international economic pressures.”
But he added that conditions have since been improving. “We are able to advise that the level of booked and committed revenue is now at a level that is in line with last year,” Wilson said.
While market conditions remain soft in NSW, ACT and Queensland, the company's performance in Victoria is now “acceptable... in the context of current market conditions,” he said.
Oakton's ability to offshore work to its office in Hyderabad, India, is also helping the company in the current economic climate, according to Wilson.
“During the half over $40 million of work was retained or won where the ability to offshore components of these projects was critical to our success,” he said.
In October, Oakton forecast that its revenue for FY12 would be ahead of the $177.5 million in adjusted revenue earned during the prior year.
As of the end of the 1H, Oakton was at 75% of this revenue target, the half-year results show. The company also expects to earn around 55% of FY12's revenue during the second half.