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

 

Must Sell 20 Petrol Stations: Z Cleared To Buy Caltex Assets

Z Energy is allowed to buy the Caltex and Challenge! petrol station chains but must sell 19 of its retail sites and one truck-stop, the Commerce Commission has ruled in a split decision that acknowledges possible retail price coordination between fuel retailers occurs in some regions. More>>

ALSO:

Huntly: Genesis Extends Life Of Coal-Fuelled Power Station To 2022

Genesis Energy will keep its two coal and gas-fired units at Huntly Power Station operating until 2022, having previously said they'd be closed by 2018, after wringing a high price from other electricity generators who wanted to keep them as back-up. More>>

ALSO:

Dammed If You Do: Ruataniwha Irrigation Scheme Hits Farmer Uptake Targets

Enough Hawke's Bay farmers have signed up for water from the proposed Ruataniwha Water Storage Scheme for it to go ahead as long as a cornerstone institutional capital investor can be found to back it, its regional council promoter announced. More>>

ALSO:

Reserve Bank: OCR Stays At 2.25%

Reserve Bank governor Graeme Wheeler kept the official cash rate at 2.25 percent, in a decision traders had said could go either way, while predicting inflation will pick up as the slump in oil prices washes out of the data and capacity pressures start to build in the economy. More>>

ALSO:

Export Values Down: NZ Posts Biggest Annual Trade Deficit In 7 Years

New Zealand has recorded its biggest annual trade deficit since April 2009, reflecting weaker prices of agricultural commodities such as dairy products, beef and lamb, and increased imports of vehicles and machinery. More>>

ALSO:

Currency Events: NZ's New $5 Note Wins International Banknote Award

New Zealand’s new Brighter Money $5 note has been named Banknote of the Year in a prestigious international competition. The $5 note was awarded the IBNS Banknote of the Year title at the International Bank Note Society’s annual meeting. More>>

ALSO:

Get More From Scoop

 
 
 
 
 
 
 
 
 
Business
Search Scoop  
 
 
Powered by Vodafone
NZ independent news