7 Apr 2014

US market focus for Xero this year

6:52 am on 7 April 2014

Xero's major focus this year will be on expanding in the United States while its major competitor there, Intuit, is now marketing aggressively in Australia.

no caption

Photo: RNZ

Figures released by Xero on Friday showed its North American customers tripled to 18,000 in the 12 months ended February.

However, that number is tiny in comparison with 102,000 in New Zealand, 109,000 in Australia and 47,000 British customers.

Mint Asset Management senior analyst Greg Fraser said US firm Intuit appears to be trying to counter the threat Xero poses to its business.

He said Intuit has substantially lowered the price of its product in Australia, probably a strategy to ensure Xero is kept busy in its own area and distract it from its main goal of expanding in the United States.

Mr Fraser said the figures from Xero have been very pleasing, and it looks like an interesting stock at this point.

Xero founder and managing director Rod Drury is confident about his company's prospects in America.

He said Xero has focused its product in its big growth markets, Australia and the United Kingdom, and the company's goal is now to ensure it has enough product for the United States.

The compay has about 750 staff and aims wants to add 300 - 400 people by next year After that, the growth rate is likely to slow, Mr Drury said.

Xero had $210 million in cash at the end of March after losing $35 million in the 12 months ended March.