Xero posts $4.3 million annual loss

DIEGO OPATOWSKI/Dominion Post

XERO RESULT: Online accounting software provider Xero posted a net loss of $ 4.31 million for the year to March but said it had exceeded its customer number target.

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Online accounting software provider Xero posted a net loss of $4.31 million for the year to March but said it had exceeded its customer number target.

Xero said today annual operating revenue from customer subscriptions came in at $134,000, up from $10,000 last year. Operating expenses totalled $5.14 million, which Xero said were in line with forecasts.

The company grew total number of customers to 1406, exceeding the 1300 that had been forecasted in Xero's prospectus.

Receipts from customers, at $213,000 were lower than the forecast of $250,000-$350,000 provided by the company in February 2008.

Chief executive officer Rod Drury said the shortfall in revenue was due to customer growth being weighted towards the end of the period, a greater focus on accountants during the first year and fewer customers than expected deciding to pay for services a year in advance.

Drury said Xero had cash of $8.9 million at May 10, ahead of the prospectus target of $8.4 million due to lower than expected costs and greater than anticipated interest income.Net cash spent to date amounted to $3.875 million.

"With our first year behind us, we're now working hard to leverage our competitive advantage and focus on customer acquisition and conversion of the substantial sales pipeline we have in place," Drury said.

"We learned a lot about the small business market."

Xero listed on the stock exchange in May 2007 with its shares priced at $1. The company's share price has fluctuated between $1.17 and 68 cents.

- © Fairfax NZ News