NZ based accounting platform Xero recorded its first full-year profit of $3.3 million for the 12 months to March 31 but warned of the growing impact of COVID-19 on its business in the new financial year.
Xero was in the black for the first time in its full-year results after a net loss of $27.1 million last year and its operating revenue surged by 30% to $718.2 million.
Xero said it grew its total subscribers by 26% to 2.285 million in the year to March, putting it well ahead of rival MYOB.
It said its global push has also reaped results with subscriber numbers growing by 31% in the United Kingdom and 51% in those countries outside the UK, Australia, New Zealand, and North America.
That’s impressive growth but the real test will be to examine growth in six months and 12 month’s time to see how many of those new customers lasted as clients.
CEO Steve Vamos said coronavirus was having a widespread impact on the small businesses which make up the bulk of Xero’s customers.
“Many customers and partners are having to adapt the way they operate while investing enormous effort to survive at this difficult time,” he said. “Helping them is our immediate priority.”
The company warned that the COVID-19 was impacting recurring monthly revenues and that the 2020-21 year would see a bigger impact.
Mr. Vamos added that despite the uncertainty created by the coronavirus outbreak Xero’s strategic ambitions remain unchanged.
“We remain committed to our three strategic priorities: to drive cloud accounting around the world, grow the small
business platform, and to continue to build for global scale and innovation.”
“Now more than ever small businesses are recognising the benefit of being able to use the cloud to run their businesses and manage their finances,” he said.
Investors were not all that fussed with the result – the profit (small as it is) had been widely expected. The shares eased 4.7% to $79.77.
