MYOB makes $65 million loss

MYOB has reported a $65 million loss for the first half of its 2015 financial year, as costs from its recent ASX listing hit the bottom line.

Despite strong growth in revenue and subscribers, MYOB's six-month loss was more than twice as large as last year's $29.2 million loss. Half-year revenue was $160.8 million, up 14.2 percent from $140.9 million in 2014.

The poor profits followed heavy spending on R&D, acquisitions and the financial impost of becoming a public company, including an interest charge to reflect the current capital structure, IPO-related transaction costs of $20 million and other day-to-day costs of being a listed entity, such as directors' fees.

The vendor has also spent millions on sales and marketing and product development. Sales and marketing spend alone reached more than $31 million. MYOB also spent $13.1 million in May to snap up Ace Payroll.

While profits were down, the number of subscribers continues to grow. MYOB now claims 150,000 SME cloud subscriptions in August and 528,000 paying users at the end of June, up 10 percent year-on-year.

MYOB also revealed that a lot of customers want to pay subscription costs upfront, which provides revenue straight away and puts cash in the bank for investment.

Money is also being poured into staffing, with an expense increase “very heavily” driven by staff costs, which were up six percent.

The battle against Xero has also seen MYOB plough $115 million into research and development in the past three years.

MYOB is hardly alone in reporting a loss: Xero reported a NZ$69.5 million (approximately $62.9m) net loss after tax for the year ending 31 March 2015.