Xero interim loss widens to $7 million

03:09, Nov 14 2012

A little of the heat has come out of Wellington software firm Xero's shares after it reported a 119 per cent jump in revenue to $17.3 million for the six months to the end of September.

The company's interim net loss widened to $7m, from $3.7m during the same period last year.

Xero shares, which had been up more than $1 on the month, edged down 11 cents to $6.25 following the announcement.

Xero began signalling more than a year ago that it would chase growth instead of trying to quickly break even, as its confidence grew that it would succeed in becoming a significant international player in the accounting software market.

Its board reiterated that in its interim report, saying that following a "positive review" of the competitiveness of Xero's offering, directors considered "accelerated investment in the business would create the best long term value for shareholders".

The company added 130 new staff in the year to the end of September, taking its workforce to 278.

It said it would embark on four new projects, including increasing the size of its sales and support teams in Australia, Britain and the US, and adding new features for its Australian customers.

Chief executive Rod Drury said Xero's losses were likely to grow during the second half of the year, but also expected its operating revenues to double.

"With our proven execution ability, we believe it is in the best interests of shareholders to continue to grow the business aggressively," he said.

Xero had $30.6m of cash on hand and the ability to raise significantly more if required, he said.