XRO -6.22%: first half result for the accounting software business was a bit light on. They swung into a loss of $NZ5.9m vs a $NZ34.5m profit in 1H21, despite growing revenue 23% and gross margins expanding 1.4% to 87.1%. Earnings and cashflow were impacted by higher marketing and & development spend which are expected to subside in the second half. The result also came with a small acquisition, buying US based inventory management software business LOCATE for a mostly scrip deal worth $US19m. Another string to the Xero offering, however the result was a tad soft.
MM remains long XRO in the Flagship Growth Portfolio
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