Xero Limited (ASX: XRO) is plotting growth in the UK with an acquisition and other initiatives.
Xero is one of the world’s largest cloud accounting software providers. It operates in Australia, New Zealand, the UK and the US.
UK Growth Plans
Firstly, Xero announced the acquisition of Instafile. This business provides cloud-based accounts preparation and tax filing software for UK accountants, bookkeepers and small businesses to UK entities like HMRC (the UK’s tax office).
Instafile links with the Xero data to allow for the filing of tax returns together with statutory accounts.
The acquisition price is £5.25 million, which will be paid over three years and includes some performance targets. The acquisition is expected to complete by the end of December 2018.
Xero Managing Director of UK & EMEA Gary Turner said: “The acquisition of Instafile will connect the ‘last mile’ between the Xero platform in the UK and HMRC for accountants and bookkeepers.”
Mr Turner went on to say that tax filing functionality has been a key aspect of partner growth in Australia & New Zealand and it could lead to, “a similar boost in the UK given our addressable market.”
UK Financial Conduct Authority
Xero has also registered with the UK Financial Conduct Authority as an Account Information Services Provider. Xero said this will ’round out’ its bank feed coverage with the UK’s big banks.
Xero said these initiatives were announced to a European Xerocon event attended by 3,000 accountants, bookkeepers and ecosystem partners.
The company recently revealed 40% subscriber growth and 56% revenue growth for the UK in its half year report, helping total revenue grow by 37% to $256.5 million.
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