Xero shuns targets, warns of ‘crazy pricing’

Xero has given investors at its annual meeting in Sydney no hints about how fast it expects to grow in the year ahead.

However, it did bury any lingering expectations that listing in the United States could be likely in the near term.

Xero has in the past often used its annual meetings to set growth targets.

But it backed away from very specific commitments last year, when chief executive Rod Drury reiterated a goal of notching up a million customers without setting a specific deadline. It achieved that target in March.

Xero said only at its annual meeting yesterday that its ‘‘operating metrics’’ would improve this year, and that it would consume less cash than in the year to March – assuming exchange rates remained constant.

Those messages were the same as in the outlook it provided at its annual meeting last year.

Drury told investors that Xero had seen some ‘‘pretty crazy stuff’’ by competitors in the cloud accounting software market in terms of pricing.

‘‘There is a lot of buying of customers going on, we think, in the market.’’

Drury has in the past questioned the revenues that US rival Intuit has earned from its sales drive in Britain, which Drury said was probably Xero’s ‘‘most important market’’ at present.

Responding to a question from the floor on whether Xero might list in the US, chief financial officer Sankar Narayan said the company still saw the US ‘‘as a potential long-term home’’.

Drury focused on what had been achieved under the hood at the software firm, the potential to move into new markets beyond accounting, and the scale Xero had achieved.

Xero was now earning its place as one of Australasia’s top tech companies ‘‘not just in potential but in actual numbers’’, he said.

Drury said Xero was feeling positive about the US market, but would not beat Intuit in the US just ‘‘by building a better mousetrap’’.

Instead, it needed to fundamentally change the experience customers had when using accounting software, he said.

Switching Xero’s software to cloud hosting company Amazon Web Services had laid the platform for that, he said.

Xero’s board looks certain to have secured approval from shareholders at the meeting for a big increase in directors’ fees.

Chairman Graham Smith said Xero was a ‘‘significantly smaller company’’ in 2014 when the maximum pool for directors’ fees was increased to $850,000. The new cap will take that ceiling up by nearly 65 per cent to $1.4 million.