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Current as of 24/10/14 07:40PM NZST

Hamish Fletcher

Business reporter for the NZ Herald

Meet the CEOs - Xero's Rod Drury

Xero chief executive Rod Drury says the software maker's booming share price is a problem, but a "quality problem" for a company to have.

The NZX-listed firm's share price has jumped almost 430 per cent during the last year, and closed trading yesterday at $39.70.

In the latest Herald "Meet the CEOs" video interview, Drury said having a share price as a public measure of the company's performance does put more pressure on the business.

"But it's not something we control," Drury said.

"So you know, we just execute our business, people can see what we're doing, we're very clear to communicate our strategy. People know it's a long term business, so we can't control that, we don't set the share price. It's great that it's up, you know, it's a quality problem, but it is a problem because I'm hiring people at the share price and all of those sort of things. So it does put a bit more of an edge on it," he said.

Drury's stake in the company - around 17 per cent - is on paper worth more than $800 million, based on Xero's present market capitalisation.

Asked if the idea of that sort of wealth changed how someone lived, Drury said:

"I think it probably does but it's not real, it's not cash...you can't spend it, I can't go out and sell a whole bunch of shares but for me it's just driving the business."

Xero cracks quarter-million customers

The Wellington-based company attracted its 250,000th customer in January, adding 50,000 customers since August, and taking it a quarter of the way to its target of one million clients. That implies Xero has annualised recurring revenue of $83.5 million, based on its last published revenue figure of $70.6 million as at Sept. 30.

The company has previously said it was on track to boost annual revenue by more than 80 percent, which would take sales beyond $70.2 million for the year ending March 31 from $39 million a year earlier.

"Now with a quarter of a million customers globally, and with the Australian market fast approaching 100,000 customers, we are gaining real momentum," chief executive Rod Drury said in a statement ahead of the company's annual conference, in Auckland.

"The results we have achieved over the last year are testament to the innovation of the product development team, which is working hard to build the features enabling us to target all small businesses in our core markets, as well as the wider teams in US, Australia, the UK and here in New Zealand."

Last week Xero appointed former Microsoft chief financial officer Chris Liddell as its new chairman and ex-PayPal executive Peter Karpas to lead its North American unit. US-based Bill Veghte, who runs HP's enterprise group, has also been appointed to the company's board.

The shares were last at $39.60, and have climbed 23 percent this year.

Additional reporting from BusinessDesk

- NZ Herald

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