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.
Accounting software company, Xero, which shifted its primary market listing to Australia recent says it has made its first positive earnings before interest, tax, depreciation and amortisation (but a bottom line loss nevertheless).
Xero ((XRO)) posted a maiden positive earnings in the first half, although an unexpected decision to de-list from the NZ Stock Exchange in favour of a sole ASX listing is suspected behind a negative reaction in the share price, which fell -2% post the result. The company also suggested that after cash break-even is achieved, it will reinvest in growth. Strong subscriber growth in Australia and a continued ramp-up in the UK are the highlights of the results.
Xero’s FY18 performance may have met market consensus, but Citi analysts had been a little more ambitious, and thus the company slightly "missed". But only on operational costs affecting EBITDA; other numbers are either better or in-line.
FY16 operating revenue was up 67% and in line with UBS estimates. The broker notes North America is slow but also in line. The company is focused on its opportunities with the broker noting, near term, leverage and use of cash are key.