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Xero heads for Oz after sales hike

02 Oct 12

Xero, the cloud-based accounting platform provider, more than doubled first-half sales and expects to list across the Tasman next month as it boosts its operations in Australia.

Operating revenue will be north of $16.7 million in the six months ended Sept. 30, up from $7.9 million a year earlier, the Wellington-based company said in a statement. Its annualised monthly committed revenue accelerated to $38.7 million at the end of September, from $34.5 million flagged at its July annual meeting.

Xero is proceeding with its plan for a secondary listing on the ASX, which it expects will happen in November, it said.

"The Australian region has shown particularly strong growth, with a tripling of the numbers of paying customers, on the back of the integrated payroll features and significant growth in numbers of accounting and bookkeeping partners," the company said.

Xero added a further 11,800 customers since the July meeting, taking its client base to 111,800. New Zealand clients account for 51 percent of the company's book, while Australian customers make up 29 percent.

The push into Australia will heat up competition with MYOB, Australasia's dominant payment solutions firm, which has recently launched a cloud-based suite of services. MYOB, which is controlled by US private equity firm Bain Capital, holds between 60 percent and 70 percent of New Zealand's accounting market.

Last year, Xero decided to forego short-term profits for a growth strategy, and has been keen to buy assets, including local software firms and an Australian payroll company.

The shares climbed 1 percent to $5.25 and have surged 88 percent this year.

By Paul McBeth - BusinessDesk

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