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Xero Shares Slump After U.K. Subscriber Growth Disappoints

By Stuart Condie

 

SYDNEY--Xero Ltd.'s shares are on course for their largest one-day fall since May after the cloud-accounting software company flagged subdued U.K. subscriber growth.

Chief Executive Steve Vamos told Xero's annual general meeting Thursday that while revenue growth in each market was in line with expectations, the ASX-listed company had added fewer-than-anticipated U.K. subscribers in what he called a less-than-buoyant macro environment.

The stock was down 7.1% at 90.70 Australian dollars (US$62.92), making it the second-worst performing component of Australia's S&P/ASX 200 benchmark index. The decline would be the biggest since the stock fell 12% after the release of its FY 2022 results.

Xero's U.K. performance was hit by a slower-than-anticipated shift by businesses to digital value-added-tax returns. Changes to sales organization also had a short-term impact on productivity, Mr. Vamos said.

Macquarie analysts had previously expressed concerns over the possibility of downside risk from a weaker-than-expected recovery in U.K. subscriber growth. They said in a note that the commentary confirmed their worries.

 

Write to Stuart Condie at stuart.condie@wsj.com

 

(END) Dow Jones Newswires

August 17, 2022 22:06 ET (02:06 GMT)

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