Xero FY loss widens 9%, subscribers up 31%

Xero’s share price has jumped after the NZ-based accounting software firm cut its underlying full-year loss by 63 per cent.

Xero’s statutory loss widened nine per cent to $NZ27.1 million ($A25.67 million) due to the $NZ16.3 million first-half it made against its US payroll product.

But operating revenue for the 12 months to March 31 increased 36 per cent to $NZ552.8 million thanks to a 31 per cent rise in subscriber numbers.

Stripping out the impairment, the ASX-listed firm’s loss fell 63 per cent to $NZ8.54 million.

Shares in the company rose 7.09 per cent to $58.16 at 1015 AEST, up 46 per cent from $39.79 a year ago.

Chief executive Steve Vamos said Xero was making progress in driving cloud accounting adoption globally, including adding 100,000 subscribers in the UK over the past six months.

“We have a genuine competitive edge by prioritising investment in growth, and partnering closely with accountants and bookkeepers, to deliver a human-centered technology experience for small business communities across the globe,” Mr Vamos said.

The company’s Australia and New Zealand subscriber numbers rose by 22 per cent to 1.08 million for the year, while there was a 48 per cent lift in North American subscribers to 195,000 when factoring in the acquisition of Hubdoc in August 2018.

UK subscribers grew by 151,000 or 48 per cent to 463,000 for the 12-month period.

The company said its free cashflow for FY20 is expected to be a similar proportion of total operating revenue to that reported in FY19.

The company will not pay a dividend and has yet to do so.

AAP

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