Wednesday 30th April 2014
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Shares in Xero climbed 11 percent after the accounting software developer said it slowed the pace of cash outflow in the first three months of the year.
The stock jumped $3.31 to $33.30 after the Wellington-based company said net operating cash outflow was $5.6 million in the three months ended March 31, slowing from an outflow of $6.5 million in the December quarter, and up from $2.5 million a year earlier.
Cash receipts of $20.4 million were up 13 percent on the preceding quarter, and 79 percent higher than a year earlier. Staff costs rose to $12.1 million, compared to $10.8 million in the December period and $6.9 million in 2013.
Xero's operating and investing cash outflow fell to $11.8 million from $13.8 million in the December period, and up from $6.6 million a year earlier. The company held $209.9 million of cash as at March 31.
The company raised $180 million from investors last year to help fund its aspirations to grab one million worldwide, and is targeting the US market for that growth. North America accounts for about 6.3 percent of its 284,000 customer base.
Separately, Xero said it has formed an alliance with New York Stock Exchange-listed H&R Block to become the world's biggest consumer tax services provider's preferred small business online accounting software service.
"Partnering with the well-known tax company gives it the opportunity to increase its brand awareness in the US and expand its marketing and sales channel to more small businesses throughout the country," Xero said in a statement.
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