Video | Agriculture | Confidence | Economy | Energy | Employment | Finance | Media | Property | RBNZ | Science | SOEs | Tax | Technology | Telecoms | Tourism | Transport | Search

 


Xero says on target with accelerated cash burn

Xero says on target with accelerated cash burn as it takes on workers

Aug. 1 (BusinessDesk) - Xero, the cloud-based accounting software company, said a 47 percent increase in quarterly cash burn is on budget as it hires workers and takes on rival Intuit in the US market.

Xero's net operating and investing cash outflow rose to $17.3 million in the quarter ended June 30, from $11.8 million three months earlier, the company said in a statement. Staff costs rose to $19.1 million from $12 million and were up 88 percent from the June quarter last year. Cash holdings fell about 8 percent to $192.7 million.

The company doubled staff numbers to 758 in the 12 months ended March 31 and has continued to hire workers as it attempts to scale up to a profitable size. The company told shareholders at their annual meeting last month that it is considering a listing in the US after it reaches annual revenues of US$100 million, expected in this financial year, and has tapped former Microsoft chief financial officer Chris Liddell as chairman.

"From our perspective, there are no surprises," said Darryl Robinson, Xero's general manager group finance. "The quarterly cashflow results are in line with our targets and are reflective of our growth plans."

The shares fell 2.5 percent to $24.77 and have shed 21 percent this year. That's still above the $18.15 a share that US investors including Matrix Capital Management and the Peter Thiel-backed Valar Ventures paid in a capital-raising last October that gave Xero a $180 million cash infusion. At the rate it used cash in the June quarter, it has enough for at least another 2 1/2 years.

Sales were $23.5 million in the June quarter, up from $20.4 million three months earlier and up 81 percent from the same period last year

Chief executive Rod Drury told shareholders last month that America's incumbent accounting software provider Intuit is "spooked" by the arrival of Xero and was adjusting its strategy and products to protect market share from its upstart rival.

"Intuit's a formidable, large company in the US, but it's important to recognise that of something like 30 or 40 million small, medium businesses in the US, Intuit's customer base is five million," Drury told BusinessDesk after the meeting.

(BusinessDesk)

© Scoop Media

 
 
 
 
 
Business Headlines | Sci-Tech Headlines

 

China Shopping: NZ-China FTA Upgrade Agreed Among Slew Of New Deals

New Zealand Prime Minister Bill English and China Premier Li Keqiang signed off a series of cooperation deals spanning trade, customs, travel and climate change and confirmed commencement of official talks on an upgrade to the nine-year old free-trade agreement between the two countries. More>>

ALSO:


Media: TVNZ Flags Job Cuts To Arrest Profit Decline

Chief executive Kevin Kenrick said the changes were aimed at creating "a sustainable future video content business for TVNZ in an ever-changing media market." More>>

ALSO:

Reserve Bank: Wheeler Keeps OCR At 1.75%

Reserve Bank governor Graeme Wheeler kept the official cash rate unchanged at 1.75 percent, as expected, and reiterated his view that the benchmark rate doesn't need shifting for the foreseeable future. More>>

ALSO:

Trade Plans: Prime Minister's Speech To International Business Forum

"The work to improve public services, build infrastructure, and solve social problems is possible only because we have enjoyed sustained, solid economic growth. A big reason for that is the Government’s consistent agenda of economic reform, and our determination to open up more opportunities for trade with the world." More>>

ALSO:

Get More From Scoop

 
 
 
 
 
 
 
 
Business
Search Scoop  
 
 
Powered by Vodafone
NZ independent news