Xero shares near high as sales double
Xero shares surged to within sight of its highest level yesterday after the cloud accounting company said half-year sales were on track to double.
In a trading update filed to the NZX, Xero said operating revenues for the six months to September 30 were expected to come in at $16.7 million, up from $7.9m in the same period last year.
That prompted the Wellington-based firm's share price to spike nearly 8 per cent to $5.70, just 10c shy of the $5.80 peak it hit in July, before finally paring back to yesterday's closing price of $5.50.
With its share price at $2.78 on January 4, that represents an 88 per cent increase in the year to date.
The surge in sales was achieved on the back of a 118 per cent growth in its customer base, with annualised monthly committed revenue for the period at $38.7m, up from $18m a year ago.
The decision to focus on overseas growth markets appears to be gaining traction, with sales from Australia, Britain and the United States accounting for 58 per cent of monthly committed revenue.
Xero had previously abandoned its plans of achieving profitability as fast as possible, to focus on expansion outside New Zealand.
Xero is looking to introduce a secondary listing on Australia's ASX early next month.
"The best shareholders we could have are our accounting partners, who are the recommenders of our software," said Xero chief executive Rod Drury.
"As we are growing in Australia, we have had lots of demand from Australian partners to buy into the story."
Xero' s staff grew by 130 in the past year, and may grow more to support its expansionary drive, though Drury conceded that finding the talent might be a challenge.
Figures made public yesterday showed that customers across the Tasman had grown by 213 per cent to 32,500 in the past six months compared with a year ago. The firm's next fastest growing market was the US, where its customer base rose 130 per cent to 6900.
New Zealand still remained Xero's biggest market, with 57,300 customers.
The Dominion Post