Shares in accounting platform provider Xero, which have more than quadrupled in value since the company listed in 2007, shot higher yesterday despite the company having never turned a profit.

The stock rallied by 20c to $4.04 - close to last week's record high of $4.05 - after Xero reported that its revenue had ballooned out to $19.3 million in the 12 months ended March 31 from $9.3 million a year earlier.

Xero shares finished the day at $4, up 16c or 4.2 per cent from Monday's close. The stock has gained 45 per cent in value so far this year.

Last year, the company reported a $7.5 million loss for the 12 months to March 2011, an improvement on the $8.4 million loss for the previous year.


Chief executive and founder Rod Drury would not be drawn on when the company was likely to go into the black, other than to say it would be "a long way down the track".

"We are focusing on growing customer numbers and growing revenue, which we think is the best way to create value for our shareholders," he said. "It is a bit different to what the normal New Zealand businesses would do, but we are growing a significant global business."

Xero provides online accounting systems for small- to medium-sized enterprises, which typically have fewer than 20 employees. The company's shares were issued at $1 each, and listed on the NZX in June 2007.

Wellington-based Xero was founded in July 2006 by Drury and specialised small business accountant Hamish Edwards. The company's market capitalisation now stands at $423.8 million.

Xero's main competitors are MYOB in Australia, Sage in Britain and Intuit in the United States.

Drury said the United States market would be the key.

"If we can grab market share off Intuit, then we will have fulfilled our goal of being a significant global company."

In an update released to the NZX, Xero said it had doubled its customer base to 78,000 from 36,000 over the 12 months to March 31.


In the year ahead, New Zealand, Australia and Britain would be the "growth engines" for the company, Drury said.

There are some heavy hitters on the company's share register - Sam Morgan of Trade Me fame, Peter Thiel, the German-born American business magnate who co-founded PayPal, and MYOB founder Craig Winkler.

Xero's annual result is due out in May.