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Xero topples Port of Tauranga as highest price local stock on NZX

Tuesday 4th June 2013

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Cloud-based accounting firm Xero has toppled Port of Tauranga as the highest priced local stock on the NZX as it charts another notch in its belt, having more than tripled in the past 12 months.

The Wellington-based company's shares rose 0.7 percent today to $14.10, passing the port company, whose stock fell 2.7 percent to $13.90 in afternoon trading. That makes Xero the highest priced local stock on the NZX and behind only dual-listed Westpac Banking Corp at $34.80 and Australia & New Zealand Banking Group at $33.70.

Last month, chief executive Rod Drury said it was natural for shareholders to think the value was captured given the stock's gains, but that "we believe we're just at the beginning of a massive market shift as small businesses globally realise the benefits of connected cloud solutions."

Xero is seen as the frontrunner for locally-listed tech companies alongside governance app maker Diligent Board Member Services as the stock exchange prepares for a handful of new companies to join the bourse.

The newest member, SLI Systems, which builds website search engines, jumped 24 percent to $2.20 today, adding to its 19 percent debut on Friday.

Xero's share price has surged from just 85 cents in May 2008, and has gained 84 percent this year alone, valuing at $1.65 billion by market capitalisation. Port of Tauranga has advanced 8.6 percent this year, and has a market cap of $1.86 billion.

The accounting firm reported an annual loss of $14.4 million in the year ended March 31 as it continues to chase sales growth at the expense of short-term profits, doubling sales to $39 million.

Xero has managed to attract 157,000 customers, the bulk of which are in Australia and New Zealand, giving it annualised monthly revenue of about $51.5 million, or about $328 per client.

The company is looking to reach one million paying clients, with about 350,000 in Australia and 360,000 in the US, according to last month's investor presentation.

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