In announcing its H1 FY2018 results this week, cloud accounting software company Xero, the largest in its industry outside the U.S., said it plans to delist from the New Zealand Stock Exchange (NZX).
News reports from ZDNet on Thursday (Nov. 9) said Xero will cease trading on the NZX at the end of January and delist from the exchange on Feb. 2. The company described the plan as an “extensive strategic process” that will consolidate its listing onto the Australia Stock Exchange and “provide longer-term access to a broader marketplace for Xero shareholders.”
Xero CEO Rod Drury noted that while the company is based in New Zealand, and that most of its employees reside in the country, 80 percent of revenue comes from outside the market.
“Our strategy is to drive further growth in markets like [the] U.K., North America and Southeast Asia,” he said in a disclosure with the Australia Stock Exchange, according to reports. “As Xero continues to grow, gaining enhanced access to deeper capital markets, increased liquidity and a broader base of potential investors is critical to fulfilling our ambition to be the leading global small business platform serving millions of customers.”
According to reports, Xero shares currently listed on the NZX will be transferred to the ASX. Existing shareholders won’t be affected, the company stated.
Plans to delist from the NZX were announced when Xero revealed its earnings results for the first half of fiscal year 2018, which saw the cloud accounting software company’s first positive earnings.
The company posted a $14.67 million loss for the first half of the fiscal year, a 50 percent improvement compared to H1 FY2017. And while the company has yet to post a profit, revenue increased 37 percent in H1 — its first positive earnings before interest, tax, depreciation and amortization (EBITDA), hitting $3.76 million, which is a significant improvement on the $18.03 million in losses the company posted in H1 FY2017, reports in Business Insider said.