22 Jul 2011

Xero strengthening presence in Australia

10:32 am on 22 July 2011

Xero is spending some of its $16 million cash reserves to beef up its presence in Australia.

The online accounting software company, which is based in Wellington, has bought the Australian online payroll provider Paycycle for $A1.5 million.

Founder and chief executive Rod Drury says payroll services are essential to Xero's accounting package and win the support of Australian accountants.

He told shareholders at the annual meeting in Wellington on Thursday that Xero is working with New Zealand Post to provide digital postal services and eliminate unnecessary repetition of things like invoicing.

Xero's growth continues to impress, with the numbers of business paying customers jumping 25% to 45,000 in the June quarter, and annualised revenue of $15 million.

The company had intended to break-even this year, but Mr Drury says it's decided to keep pursuing further growth, particularly in the potentially lucrative US market.