Xero sees 51% increase in UK accounting software business

Cloud accounting software specialist Xero has reported a 51% hike in both UK revenues and customers in the last six months, citing HMRC’s Making Tax Digital as a factor in its growth

Xero said operating revenue for the half year to 30 September was up 32% compared with the same period of the previous year to NZD$338.7m (£168m), while the company reported a 30% growth in annualised monthly recurring revenue to NZD$764.1m (£379.5m).

Net profit after tax was NZD$1.3m compared to a loss of $28.5m in the same period last year.  EBITDA excluding impairments of $65.9m almost doubled from $34.5m in H1 FY19.

Globally the company has now passed the two million customer mark, representing a 30% increase in its client base. While it took more than a decade to add Xero’s first million clients, it took just two and a half years to add the next million, which the company said was indicative of the pace of adoption across a number of markets.

The UK customer base grew by 51% compared to the same period last year to a total of 536,000. Xero said the results were driven by the implementation of Making Tax Digital for VAT, along with building its partner channel and investment in brand and marketing. It has announced the opening of a new office in Manchester in addition to offices in London and Milton Keynes.

Steve Vamos, Xero CEO, said: ‘We’ve continued to perform well this half with strong topline results and improving financial performance.

‘There are a number of significant global trends contributing to Xero’s growth including industry, regulatory and technology shifts. These include the increased use of cloud technology by small businesses and the digitisation of tax and compliance systems.’

Pat Sweet |Reporter, Accountancy Daily [2010-2021]

Pat Sweet was the former online reporter at Accountancy Daily and contributor to the monthly Accountancy magazine, pub...

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