Oakton eyes targets

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Former lawyer and TV funnyman Steve Vizard's foray into the IT world, Melbourne-based consulting group Oakton, boasted a FY2002 after-tax profit up 30 percent to $6.9 million, saying with around $4 million in cash in the bank, it still has a hot list of acquisition targets.

Oakton posted revenue of $29.7 million, which it claims is a 26 percent increase on last financial year.

In August, Oakton announced the acquisition of Tier Australia, the Australian arm of US consulting and delivery business Tier Technologies, and mPower systems, a Sydney-based Oracle E-Business suite services company.

In September, Oakton took a 15 percent stake in text-messaging developers Mobile Corporation.

The acquisitions and investment were not factored in to the 2002 results.

Oakton managing director Paul Holyoake said the company is in negotiations with other possible acquisition targets that are in businesses akin to those Oakton is already engaged in, including application development, application implementation and consulting.

In a statement, Vizard, who is chairman of Oakton, said the company has a strong balance sheet and is debt free. "With our conservative management outlook we anticipate our past successes and consistency will be maintained," he said.

"Increasingly, multi-national companies have asked us to develop systems in Australia for global deployment. We will capitalise on that trend. We are also successfully partnering with overseas-based developers so as to lower delivery costs to our clients."

"We have been doing some deals to unload some of the back-end development type stuff, Holyoake said. "Part of the project is being done in India," he said. "It's mainly the mainframe remediation, mainframe development work, which we don't do," he said.

Asked about cost savings from outsourcing functions to India, Holyoake said "it's more about keeping us in the game to do the work".

Holyoake said much of Oakton's new business is coming from customers gained through the tier acquisition, including insurers Zurich and Alliance, as well as AGL. He said the acquisition also gives Oakton a Sydney presence with existing client Telstra.

In February, Oakton entered strategic alliances with Intel, Microsoft and Dell Computer to establish a test and 'proof-of-concept' centre to be based in Melbourne.

The centre is housed within the Oakton Computing head office in Melbourne, with Microsoft, Intel and Dell providing relevant hardware and software, as well as marketing and technical support.

Established in 1988, Oakton listed on the Australian Stock Exchange (ASX) in 2000. It is now made up of a federation of companies covering services from IT consulting to design implementation and maintenance.

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