21 Nov 2013

Xero reports $17.1m first-half loss

9:46 am on 21 November 2013

Xero, the company the market values at $4.5 billion, has reported a $17.1 million first-half loss.

The loss for the six months to September compares with the $7 million loss the accounting software company made in the same six months last year.

Rod Drury.

Rod Drury. Photo: XERO

Sales came in at $30.3 million for the six months, up 84%, as the company forecast.

Founder and managing director Rod Drury says his company's focus is all on growth and Xero is now the biggest online accounting provider in the United Kingdom, Australia and New Zealand.

He says while his company hasn't provided any guidance yet, Xero is likely to make even bigger losses in the near term.

Mr Drury says Xero has raised a large amount of money and now has over $200 million in the bank which has allowed it to invest ahead of growth, as well as investing in its management teams.

He says the company Intuit is a strong competitor in the United States. Even though Xero is a large New Zealand company with more than 600 staff, he says, that compares with Intuit's 8000 employees and over 13,000 staff at Sage. However, the large cash fund sends a message to the US market that Xero is the new challenger.

Mr Drury says there are 29 million small businesses in the US and if Xero continues on the same path it should be able to attract millions of customers there.