Welcome to Tamaki Makaurau Aotearoa. Ko Craig Hudson toku ingoa. Welcome to Auckland, New our pleasure to have you here with us today for Xero's Annual Meeting, and welcome our directors and leadership team who have traveled from all over the globe to be with teams that are working here, and we remain a New Zealand company domiciled here. We're also incredibly proud to have an an come, and I'd like to thank you, all of our shareholders, for supporting us on this incredible journey so far. Now I'd like to hand over to our Mr.
Graham Smith, to begin our 2019 Annual Meeting.
Thank you. Thanks, Greg, and good morning, and welcome to Xero's Annual Meeting for 2019. My name is Graham Smith. I'm the Chair of Xero's Board of Directors. I'm very pleased to be with you here today.
This is my 5th Xero Annual Meeting and 3rd as Chair of the Board. It's great to bring this year's meeting back to Xero's home. New Zealand, Auckland is an important location for Xero and is where a significant proportion of product development is undertaken for our customers and partners around the world. Firstly, I'd like to welcome shareholders who are attending the meeting in person and those joining us online. At the outset, I'd like to acknowledge what an amazing company Xero is.
At its core, Xero exists to make life better for people in small business, their advisors and communities around the world. Since 2006, when Rod Drury founded the business in a Wellington apartment, we scaled from a handful of small business subscribers in New Zealand to more than 1,800,000 subscribers globally. Many of you here today have been on this journey with us, and your ongoing support has made our success possible. I'm informed by our company secretary that in accordance with the company's constitution, a quorum is present, and I now declare the meeting formally open. Now I'd like to introduce those with me on the stage today.
To my left, your right, our Non Executive Directors Lee Hatton, David Thodey, Susan Peterson, Rod Drury, Dale Murray and To my right, your left is Xero's Chief Legal Officer and Company Secretary, Shahman Sadu. Next to Sharman is Steve Amos, Xero's CEO. And then we have Kirsty Godfrey Bille, Xero's CFO. We're also joined by members of Xero's leadership team and other Xero colleagues together with unable to join us today. Bill will be retiring as a Director of Xero Limited by rotation and will not be standing for reelection.
Bill joined Xero's Board more than 5 years ago in 2014. Since then, the business has expanded globally and in this time, 1,500,000 new subscribers wish him the very best for the future. Before we start the formal procedures, there are some brief housekeeping points to cover. Please make sure your phone is switched off or on silent. If there is an emergency, please follow the emergency exit sign and instructions of the venue staff.
The order of events for today's meeting will be as follows. I'll say a few words about the past year at 0. We'll then turn to the formal business and resolutions of the meeting.
0. We'll then turn to the formal business and resolutions of
the meeting. This will be followed by CFO and CEO presentations from Kirsty and Steve. And then after these presentations, I will close the meeting and invite those attending here in Auckland to stay for refreshments with the Xero board and members of the leadership team. There will also be opportunities for shareholders to ask specific questions as we address each resolution in the formal part of the meeting. And there'll also be an opportunity for shareholders to ask general questions after the CFO and CEO presentations.
I'll move now to my address. Firstly, we'd like to thank our shareholders for your ongoing support. This is a key element of Xero's continuing success. Xero achieved another record set of results in the year to 31st March 2019, delivering value to our customers, partners and shareholders. The business made excellent progress against its financial and strategic objectives and continue to expand our community of small business customers and partners around the world.
For the first time, Xero achieved positive Xero achieved positive free cash flow. More broadly, we have improved our financial and operating metrics while prioritizing investment in growth. In a moment, Stephen Kersty will elaborate on Xero's business performance and how we're delivering on our strategic priorities. The Board is pleased that the benefits we anticipated from consolidating Xero's listing on the ASX have been realized. Liquidity in Xero's stock has more than doubled since announcing move to a sole ASX listing in November 2017, combined with Xero's inclusion in a range of additional equity market indices such as the S and PASX 100, the increase in liquidity has been accompanied by significantly higher investor and analyst interest and a range of new investors have accumulated positions on our share register.
In addition, during the year, Xero successfully completed a US300 $1,000,000 convertible notes issue. These funds provide the business with financial flexibility to enhance and extend Xero's small business platform and ecosystem capabilities through complementary targeted acquisitions. The debt issue structure has been used in other geographies, particularly in the U. S, but was the first of its kind for an Australian or a New Zealand company not listed in the U. S.
A capital allocation framework is now in place to support the review and pursuit of future organic and inorganic investment opportunities. This is aligned with our strategic priorities, while satisfying our strong focus on financial discipline. Steve Wehrmoss became Xero's Chief Executive Officer in April last year, replacing founder Rod Drury. The Board is delighted with achieve these excellent results. Looking to our Board, David Thodey joined us in June as a Executive Director.
Welcome, David. And a member of the People and Remunerations Committee and Nominations Committee. David brings deep including as CEO and Director of ASX 100 Listed Companies. David has a reputation for strong operational performance and a dedication to creating brand and shareholder value. As I previously mentioned, Bill Vectee will retire from Xero's Board today.
I'm confident we have a deeply experienced highly qualified international Board of Directors and I'd like to thank and acknowledge the valuable contribution of my fellow directors during the year. On behalf of the Board, I'd like to thank the entire team of dedicated and talented Xero people for their commitment and contributions to our business. That brings me to the end of my address. We will now move to the formal business of today's meeting. The company secretary has confirmed to me that the notice of meeting has been sent to all shareholders and other persons entitled to receive it within the notice period required.
For the purposes of the meeting, the notice will be taken as read. Xero's financial statements for the 2019 financial year auditors report are set out in our annual report, which is available on our website. The matters requiring consideration today are outlined in detail in the notice of meeting. Resolutions 1 to 5 are ordinary resolutions, meaning that to pass, they require more than 50% of votes cast by shareholders entitled to vote and voting on the resolution. Because this is a shareholders meeting and shareholders are attending today both in person and online, we will conduct the voting on each resolution by way of a poll.
Giro's share registry, Link Market Services will conduct the poll and Ms. Fran Kelly of Link will act as returning officer. Be posted on the ASX market announcement platform. For those here in person, you can vote by filling out the yellow card that you should have received at the registration desk on the way in. If you hold a yellow card, please ensure you complete it and it's ready for collection during the formal part of the meeting.
For those attending the meeting online, you will be able to cast your vote by clicking get voting card. You can find further instructions
in the
online portal guide that is available on Link Vote app. If you plan to use a mobile phone to vote, you should have already downloaded the Link Vote app and receive the pin to log in to the meeting from the registration desk on your way in. You can find further instructions in the mobile app guide that is also available on ASCIRA's website and from the registration desk. If you intend to vote using the Linked Vote app, you should also have white card that you will only need to use if we encounter a problem with the app. I'll let you know if you need to complete your white card.
If you do not receive a yellow or a white card on registration, you may have received a blue card if you are attending as a non voting shareholder or a red card if you are a visitor. If you believe that you do not receive the correct card on registration, please go to the registration desk where a representative of the share registry will assist you. The proxy votes that have been submitted for each resolution will be set out on the slides that will be shown for each resolution. To give some context to these numbers, the current number of Xero shares on issue is approximately 141.3 1,000,000. Shareholders have appointed the chair of today's meeting, that's me, as a proxy in respect of approximately 81,600,000 shares voting either for, against or with discretion for resolutions 1 to 5.
As indicated on the proxy form, my intention as chair is to vote all discretionary proxies held by me in favor of each resolution. There'll be the opportunity for shareholders and proxies here in Auckland to ask questions on each resolution before it is considered. If you are attending the meeting online, you're also able to ask questions by clicking on ask a question. Further information on this is set out in the online portal guide. To ensure that questions on the resolutions that are asked online reach me in time, I ask that shareholders and proxies attending the meeting online submit those questions now.
We ask that general questions for the Board or management are asked after Kirsty and Steve have made their presentations. General questions received online during the meeting will also be addressed then. If we're unable to get through all the questions today or if there are specific questions that would be better addressed on an individual basis, we'll respond after the meeting. Please note that questions may be asked by anyone holding a yellow, blue or white card. Please raise your card when asking a question.
This is holding a red card may only observe the meeting. All right. We're going to move on to Resolution number 1, which relates to the authorization of the Board to fix the remuneration of Xero's auditors, Ernst and Young. To ensure our external auditor remains independent at all times, non audit work is reviewed and authorized by the Audit and Risk Management Committee. The Audit and Risk Management Committee has reviewed expected fees for fiscal 20 and expects the proportion of non audit fees to audit fees to be substantially lower in fiscal 20 I now propose Resolution 1 to set up the notice of meeting and put the motion to a vote.
Please now cast your vote. Okay. We now turn to the election and reelection of directors. The next resolution concerns the reelection of Susan Peterson as a Director of 0. Susan retires at this meeting by rotation in accordance with Xero's constitution and offers herself for reelection.
The Board, other than Susan, recommends Susan to you as a 0 Director and unanimously supports her reelection. I'll now ask Susan to say a few words about herself and her role on the board.
Thank you, Graham. And thank you, everybody, for giving me the opportunity to present my credentials for reelection. I've been a Director on the Xero Board now for 2.5 years. And alongside my Xero Board role, I'm also Director of Vista Group, Trustpower, Property For Industry and ASB Bank, also a co chair and founder of a fast growing small startup company, and I recently joined the Board of Global Women. So these roles sort of span across a number of sectors, a number of industries, utilities, technology, financial services, industrial property and small companies.
And I think brief of that experience that's kind of relevant to the conversations we have around the Xero board table every day. I'm also a member of all of those companies' remuneration committees, and this gives me a perspective in a time where remuneration is becoming an increasingly hot topic in Austral Asia and across the world to see what emerging trends and expectations are happening around that environment and what we need to do to delicately balance the needs of all those stakeholders as we move forward, not forgetting that our job here is to attract, retain and motivate the best talent we can grab for this company across the globe. I also serve on the as a member of the New Zealand Markets Disciplinary Tribunal, and that gives me some insight, I guess, to our emerging corporate governance in our market here in New Zealand from a perspective of leadership. More particularly to Xero moving forward, I fled the payment strategy for a large financial services institution, which is a growing area of focus for this company. This has given me a clear understanding of the opportunities that lie ahead of us and what we can do if we remove customers' barriers materially increase our relevance to our company where we sit on a company where we sit on Monday morning and we think about cash flow inventory and survival and also think about taking our products across the pressures that come from that.
So the relevance here is I know what it feels like to be a customer of Xero, and I know which parts work well and which parts we could work on. Most relevantly to this room, through the two and a half years as a Director of Xero, I'm being, 1, excited and privileged to be part of the group, but I'm also incredibly proud of some of the things the company has achieved over that time through a big team effort. First and foremost, performance. Azera share price has gone from New Zealand $15 or $17 to I think this morning would have been about AUD62 Subscriber numbers have more than doubled. 700,000 to 1,800,000 as Graham said, and Xero has obviously delivered its 1st free cash flow positive result and also it's made an profit in the second half of the year.
I think the leadership piece is really important here too. We've successfully transitioned incredibly difficult and delicate to do from a genius founder to a fabulous CEO and Steve Varmos and now we work forward to make business globally scalable. And we've had some acquisitions, but I'm most proud of our ongoing commitment to build a really strong purpose led culture for Xero, which allows our teams to successfully collaborate globally and be a very serious global player. So look, it's been a real privilege to be part of this board for the last 2.5 years, and I'd really be honored to have your ongoing support to remain on my role in the board and see 0 realize its opportunities that lie ahead.
All right. Thank you, Susan. Are there any questions regarding this resolution? Okay. No questions online.
I now propose Resolution 2 is set out in the notice of meeting and put the motion to a vote. Please now cast your vote. All right. Moving on. David Thodey was appointed by the Board as Director on June 27 this year and is now Director and unanimously supports his election.
I'll now ask David to say a few words about himself.
Great. Well, thank you, Graham, and good morning, everybody. It's a real pleasure to be here. I should quickly say I live in Sydney, but I have a long family history in New Zealand and both a long involvement actually in New Zealand. I went to school here, but all my family still reside in New Zealand.
So it's nice to be back in the land of a long white cloud. I went to university in Dunedin and then ended up working in Australia with IBM. So I've had now what 40 years experience in tech and telecommunications and has actually been my passion through that whole time, even though I did a degree in anthropology and English of all things at the time. 10 years of that 40 year career has been the CEO and 1 as IBM, which was really a branch office, and then as CEO of Telstra, an ASX listed companies. So that gave me good perspective of running large complex companies.
And then the other part of that is that a lot of my time has been spent in the region and globally. So I think about 20 years of my career, I've had global responsibility. And of course, as I think about 0 and the aspirations globally, that is so important. Some of that has been in China, managing investments in China, investments in the U. S, the U.
K. So a broad set of experience is some good and some not so good, I should quickly add, because it is not always easy. But I do think that the aspiration and commitment is really what you need. Just in terms of my current responsibilities because that's really important in terms of just my ability to contribute to CERO. I only at the moment, I only have one other listed company board, which is Ramsey Healthcare, which is a private hospital operator.
They now have about 600 hospitals, interesting more in Europe than in Australia as the whole health industry is changing. 0, which I'm obviously up for election today. And then it has been announced that I will join the Vodafone International Board out of the U. K. In September.
Tyro, which is payments Tyro, which is payments, again, a disruptive player in Australia. And of course, everyone taps now, and so payments has been a big part of their success. And the other responsibility I have is in a government agency, which is CSIRO, which is the Australian nationally funded science and research institution, which has about 5,000 wonderfully intelligent scientists trying to change the world, which is always a pleasure to be with. In terms of 0, I've got to say, I've always been inspired by what Rod and the whole team have achieved. And I in all my years working at IBM and then at Telstra, I've always wondered why hasn't there been a great Australian and New Zealand company in the tech space.
We've had many international companies. And I really think that Xero has the opportunity to become a truly global an exciting opportunity. And it won't be easy, an exciting opportunity. And it won't be easy, but I think it's an incredible opportunity. So look, I trust that some of my CEO skills and technology skills will be of value to the Board and to you.
In the end of the day, we represent you on this board. So thank you for considering me, and I trust to be involved going forward. So thank you, Graham.
All right.
Thank you, David. Are there any questions regarding this resolution? Okay. No a vote. Please now cast your vote.
Okay. We now move to resolution concerning the remuneration of non executive directors. For the purposes of this resolution, any reference to currency is made in New Zealand dollars. Resolution 4 proposes that the maximum annual remuneration that can be paid to all of the non executive directors will be increased by $800,000 from $1,400,000 to $2,200,000 with immediate effect. The proposed new remuneration cap reflects the significant growth in the size, value and complexity of Xero's business, the resulting increase in director workloads and responsibilities and the need to attract director remuneration that was based on a benchmarking progress process for director fees in our key geographies.
Targets for director fees were decided by the Board based on the research of an external remuneration consultant. The slide on the screen, which I recognize you may not be able to read, but it is available on the ASX website. So if you'd like to study it in more detail, please feel free to do so. Shows the new target director fees cap reflects the findings of this benchmarking exercise. It's worth noting that not all of the increased remuneration cap will be used at the current time.
If shareholders approve Resolution 4, the total fees for 8 ZERO directors would increase from the current total of $2,399 to $1,622,000 That's an increase of 16%. Could you just move to the next slide? The slide on the screen shows the breakdown of the total of New Zealand 1 1,000,000 622,000 by individual director that so the 1622 number is at the very, very bottom right. Assuming that the director who succeeds Bill Vecti will also be located in the U. S.
We've made that sort of 20 director fees to be made before April 2021. The remainder of the proposed increase in the remuneration cap provides a buffer that will, among other things, allow Xero to appoint highly qualified directors in the future. The Board is currently actively recruiting 2 directors, 1 with a digital product technologist skill set and one with a finance audit risk and governance skill set. Other reasons for the buffer in the remuneration cap include flexibility in structuring board committees as 0 grows and a potential remuneration review for directors that if it occurs would apply from the 1st April 2021. I note that voting exclusions apply in relation to Resolution 4 set out in the notice of meeting.
0 will disregard any votes cast by non executive directors directors or their associates unless they are voting as proxy for a person who is entitled to vote and they vote in accordance with the Gentlemen here, can we have a microphone?
Tony Mitchell, the Chair of the New Zealand Shareholders Association and also proxy holder for the New Zealand Shareholders, but also the Australian Shareholders Shareholders Association as well. So thank you very much for the opportunity to talk and congratulations on your results to date. Look, first of all, I'd like to say that representing the a key that as the a key tool and a key opportunity to be able to get the most out of the organization for a return for everyone, for the shareholders, but also appointment panel to be able to get the right people. We also understand that with what Xero is trying to achieve with global growth, getting the right people overseas is paramount for you to be able to achieve that. However, we also believe that having the information for the shareholders to be able to make an informed decision is very important as well.
And over the years in New Zealand, over the last 5 years in particular, we've been able to have good engagement with most companies, listed companies in New Zealand, to be able to talk through the remuneration and be able to get a greater understanding and insights into some of the detailed report behind. And we'd note that we have had this in the different norms over the year and with the growth to go overseas, we're not getting we did not get the same amount of detail that we would have expected and that we do get from other companies. And Xero is proud to call itself a New Zealand company still. We're hosting the AGM here today, but we have seen a change in the amount of disclosure that we have had that we have enjoyed. We have tried very hard with Susan to be able to work on that, and you have provided information since.
We thank you for that. But we're still not at the same level of understanding the detail, so our shareholders can make an informed decision. So this is not about the size of payments that are chosen to be put forward here today. It is about the process of disclosure that allows the shareholders to be able to make an informed decision. And so for that reason, the New Zealand Shareholders Association has voted our proxies and the Australian shareholders' proxies against this resolution.
And I'd like to give Susan, obviously, the opportunity to share more information if there is to help enlighten the situation on the decision for not disclosing as much information we used to. Thank
you. All right. Thank you. Susan, would you like to Well, I think let's I'm going to respond to that. And then if we Susan wants to weigh in as well, that's great.
So obviously, we know your comments and clearly you're absolutely entitled to your view. And we take all the comments and views of our shareholders to heart. So we will definitely have a discussion about it. I think our sense was we've been through a very robust benchmarking process, obviously a little more complexity than most companies because we're benchmarking in many jurisdictions, if you like, including North America and Europe. So a lot of work went into it when we sort of arrived at our final targets for the directors, we felt that they were all very reasonable, middle of the road kind of numbers for each of the geographies that we're seeking to recruit in.
And indeed, obviously, have outside the normal bell curve of director fees. And secondly, we took the opportunity when people did ask us for more information, director in each location and then also added that additional information about exactly what each director was paid for the previous period and what they will be paid going forward. It's a pretty normal increase at 16% over 2 years. We've committed to not increasing any further for another 2 years. So with all that, we felt it wasn't necessary to provide the actual benchmarking information.
However, we obviously are mindful of the comments you've made. And we'll consider that. We'll certainly have a good discussion about it. I'm sure the REMCO, the People and Remuneration Committee, will have a good discussion about it. Susan, anything you want to add
to that? Look, I'd say thanks, Tony. I think we I really do value the input and the conversations we do have. So that's sort of the starting position. In terms of our own process and how we look at this, I mean, our job around this table is to sort of weigh up all the stakeholders' viewpoints then land on a decision in the end.
And Graham's talked a little bit about the process we followed. Being ASX listed, we did look through what is market expectation for the ASX 100 Companies. Ironically, we even looked at the ASX itself in terms of how it disclosed this information and its notice of meeting. We also looked at the practice across the ditch here in terms of composition of company shareholding base and what expectations they might otherwise have. The other piece I'd factor in too is engaging a global company to produce a benchmarking notice of meeting content, I'm hopefully, I've given you a little bit of guidance as to how we looked at bearing in mind that our resolution is for increasing the share pool.
So the information which we've released today is more detailed than the pool. It's about individual remuneration, but we're comfortable doing that. The second point is a global benchmarking report. Do we release the whole report? Now many of you in the room will know that some people's lives and well-being survive on producing expert opinions and reports around the globe.
That is their IP. That's what they do. And so at the end of the day, we're not at liberty when you engage a report without consent to think about is treating all your stakeholders fairly and equitably. We have large proxy holders sitting within register now, and we've got to make sure we release the same sort of information. So we believe that we are elected here to take all of the stakeholders' interest.
You can't you try, but you can't keep everybody happy all the time. Look carefully to make sure you've provided reasonable information to pass the resolution, but not compromise the legal rights of others that sort of sit within that framework as well. And I think we felt we had reached nice balance there. But the fact we've got Tony sitting up saying, look, I'm still uncomfortable, probably means we need more of a conversation and we're open minded to that. But I guess also looking at the support for this resolution, albeit on 40% at 99.61%, it does send us a message that many of our stakeholders were relatively comfortable with our process on this.
And yes, but I'm as I say, Tony, let's keep talking.
Any other questions? Okay. There are no questions online. So I now propose Resolution 4 as set up in the notice of meeting and put the motion to vote. Please now cast your vote.
We now move to Resolution 5, which seeks shareholder approval under the ASX Listing Rules for the issue of shares to Leigh Hatton in lieu of receipt of her director's
issues
maximizing shareholder value. The value of shares issued to Lee at the time of issue taken together with all director remuneration will not exceed the Board remuneration cap. I note that voting exclusions again apply in relation to Resolution 5 as set out in the notes of meeting. Disregard any votes cast by Lee or her associates unless they are voting as proxy for a person who is entitled to vote and they in accordance with the direction on the proxy form. Are there any questions regarding Resolution 5?
Okay. No questions online. I of the meeting. We'll now move to the presentations from Kirsty and Steve. Following these presentations and shareholder questions, the meeting will be formally closed.
Thank you. And over to you, Kirsty.
Thanks, Graeme, and thanks to all of you in the room and on the webcast for being part of our annual meeting today. While Xero's global reach is extending, it's great to be here in New Zealand where we began. To be discussed, we'll be going through the financial and operating performance for the year ended the 30 1st March 2019. As the charts on this slide show, there are a number of clear proof points in our FY 'nineteen performance that validate Xero's business model. Firstly, annualized monthly recurring revenue or AMRR is an important indicator of how our business is performing and the value of our customer relationships.
In FY 'nineteen, AMRR grew by 32% to 638,000,000. That's an increase in AMRR of 154,000,000 over the prior year. To put the scale of Xero's growth in FY 'nineteen into perspective, incremental revenues 1,000,000. Business was just £159,000,000 Now looking to the 2nd chart. Over recent years, our progress on free cash flow comprising operating and investing cash flows excluding M and A has been and remains an important and improving first ever positive free cash flow result of 6,500,000 in FY 'nineteen, equivalent to 1.2% of operating revenues.
The 31% growth seen in our subscriber numbers over FY 'nineteen reflects the business' continued strong traction with particularly strong progress in international markets. A net 432 1,000 subscribers joined Xero in FY 'nineteen, taking overall subscriber numbers to more than 1.8 1,000,000. These are strong numbers, but with an eye on our global ambitions, FY 'nineteen was more pleasing in and those from the ANZ region of 193,000. Other financial highlights in FY 'nineteen provide further that while we had great subscriber numbers, we also held our average revenue per user trends. Operating revenue for the year increased 30 6% to reach $552,800,000 and the EBITDA result, excluding the impact of impairments, increased by 40 $2,000,000 to $91,800,000 also demonstrating great progress.
Lifetime Value or LTV is a key metric used across our business. LTV guides decision making on where and how to invest. It also measures the success of the business by quantifying the value created in the period that isn't captured in any other place in the financial statements. Overall, LTV per subscriber climbed 3% in FY 'nineteen to $2,398 This was driven by a move up in both ARPU and gross margin, while churn trends were consistent with the prior year. With the increase in lifetime value per subscriber and a 31% increase in subscriber numbers over FY 'nineteen, total lifetime value added in the year was over $1,100,000,000 This took total lifetime value to $4,400,000,000 up 32% 36% sorry, on the prior year.
EBITDA in FY 'nineteen increased by 52 percent to 73,200,000 including impairments of 18 €600,000 and acquisition related costs. Excluding both share based payments and impairment charges, EBITDA improved by £54,000,000 to £120,700,000 year on year, an increase of 81%. As you can see from this slide, EBITDA margin, excluding share based payments and impairments, improved by 5 percentage points to 22%. Underpinning the FY 'nineteen financial performance were a number of favorable operating trends that demonstrate Xero's increasing 0's increasing scale. Gross margin of 84% improved by 2 percentage points over the period.
This was driven by the launch of 0 Central, which utilizes machine learning to drive lower customer services costs and also efficiencies in hosting costs. Customer acquisition costs or CAC also improved by 2 percentage points to 45% as a percentage of revenue despite significant growth investment in both new and existing markets. Investment spend, including OpEx and CapEx, reduced to 31% of revenues, down from 35 these have included making tax digital features for VAT in the U. K, e mail to bills, profit and loss at a glance on mobile and a new Global Bank API. Now coming back to cash flow.
As I've mentioned, we passed an incredibly significant milestone for Xero in the FY 'nineteen results by delivering a first positive free cash flow result. Free cash flow of £6,500,000 was an improvement of £35,000,000 from last year's negative £28,500,000 Total operating and investing outflows for year were £26,200,000 with operating cash flows up £53,000,000 or 87% from the prior year of 114.2 $200,000 We finished FY 'nineteen with a capital structure optimized for Xero's future strategic and financial needs. The combination of the US300 million dollars convertible note and positive free cash flow will support both organic and or inorganic growth opportunities. Total cash and short term deposits at the 31st March 2019 were $458,000,000 Deducting the liability associated with our US300 million dollars convertible note, net cash at the end of the period was $101,000,000 an increase of $21,000,000 from FY 'eighteen. Alongside these resources, we continue to maintain our existing undrawn 100,000,000 standby debt facility.
The underlying elements of our SaaS business model continue to drive a strong track record of value creation. We anticipate our focus on the metrics that matter, particularly CAC months, further as they provide strong justification for us to continue investing in the growth of our business. In FY 'nineteen, CAC months of 13.6 indicate the time it takes for us to recover the cost of acquiring a new subscriber through monthly subscription year. An LTV to CAC ratio of 6 is a very strong indicator of the value created by adding a customer to the platform. Effectively, we add $6 of lifetime value for every dollar we spend on Lastly, as I mentioned at last year's meeting, we adopted 3 new accounting standards in FY 'nineteen.
'nineteen. We restated our FY 'eighteen comparatives to reflect these changes. On a restated basis, FY '18 EBITDA benefited by just over $22,000,000 $11,000,000 of that related to the deferral of commission costs under IFRS IFRS 15. The other £11,000,000 was due to the changes made to operating lease costs under IFRS 16. 16.
IFRS 9 was also adopted, but this didn't have material impact. Overall, the introduction of the new standards resulted in a small improvement of $3,000,000 on our restated FY 'eighteen net loss of 24,900,000. With that, I will hand over to Steve for his update. Thank you.
Well, thank you, Kirsty, and good morning, everyone. It's great to see you all here. Thanks for joining us, whether you're here physically or virtually. It's great to have the opportunity to talk more about Xero and our vision for the future. As Kirsty very articulately just took you through, it was a great year, fiscal year 'nineteen with great progress on top line revenue, cash generation and clear signs of increasing profitability.
And it is the kind of result that only happens when you have employees, when you have people in your partners and customers who truly believe and appreciate the value that we can and do deliver. So I really want to start by acknowledging and adding to Graeme's acknowledgment of our people around the world, we call them zeroes, for the strong results that they produced during fiscal year 'nineteen. I also do want to thank our partners and customers for the trust they place in us and the commitment they show to our company and the community that we are building around the world together. I want to also make a special thanks to our Board. We have a world class Board with great passion for our company who worked very hard.
I want to thank Graeme, our Chairman, for and to the whole board for their support during my 1st year as CEO. Special thanks also to Rod for his support during that transition. And David, great to have you join. And Susan, congrats on your very well deserved re opportunities Xero are clear to see. We are not short of many opportunities.
Over the past year, I've had the chance to really get to know what I know Graeme and others have referred to as a very rare and special organization. And it really does start with our purpose. And it's interesting, Susan referred to it, Graham referred to it. It is about this purpose that we are very convicted about around making life better for people in small business, their advisors and their communities around the world. Small business is family, small business is community and we are very fortunate to be very focused on the contribution we can make to them in improving and helping contributing to their lives.
And this is not something we make up. This is the feedback we get. We had a board management dinner with a nice group of customers and partners, last night small business customers and accounting and bookkeeping partners. And at the same time, it's getting very constructive feedback on the things that we can do better, and that's really the key purpose of those meetings. We also were told many stories of how Xero has contributed and changed the lives of the people that we connect with.
So it's very, very important to us. And I think also in reflecting on our mission, given the pace of change in our business, it's really important that we we constantly test and retest the value that we're bringing to our customers and partners. We need to stay relevant in every respect. So recently, as part of our strategy process, we refreshed our mission statement, which you can see there is about rewiring the world of small business, making it seamless, simpler and smarter. And we do this by helping to better connect small businesses to their key stakeholders, to take the friction out of running a small business and to allow them to focus on what's really important to them, which is doing what they love doing and obviously delivering to their customers.
And anything we can do to help them save time, to provide insights to make their business more successful is key to where our current and future value lies. And this is in a broad sense represented in the repositioning when we talk about Xero from beautiful accounting software, which is still very much in our heart and soul through to beautiful business, which is a much broader ability to connect and extend what we do to deliver value to our customers. And our beautiful business also means being a good corporate citizen. We have reached a level of maturity as a company and recognize and appreciate the responsibilities that are associated with that. It's really important for us to understand and support the expectations of the communities in which we operate around the world.
This is why we've increased our focus in the area of social and environmental impacts. We've appointed Anne Ashosobee as our Head and Environmental Impact to steward our strategy and programs. And we're handling this important initiative as a key priority of our strategy and our operations that flow from that. Our efforts are focused from the inside out, recognizing the integrated nature of social and environmental impacts on why we do what we do and how we do it. Already in place are programs to improve our carbon footprint with offset priorities, it's worth just reflecting briefly on some of the significant trends and drivers that really impact and also support our business going forward.
These touch on industry, regulatory and technology shifts. We're seeing obviously an increasing trend in the use of cloud increasingly driving the digitization of tax systems and compliance systems, including the moves in the UK, for example, in making tax digital and similar actions around open banking, single touch payroll and payday filing as two examples in Australia and New Zealand, where governments connecting with business digitally is a very strong driving trend. We're also seeing new opportunities and innovation and disruption in financial services, which does present new ways for businesses to get access to capital and manage their funds. And who knows, we may be truly heading towards a cashless society at some stage in the future. For us, being born in the cloud means these trends are at the heart of what we do.
It's at the heart of our vision and provide a tremendous opportunity and context for our priorities. And those priorities are really 3 things: to drive cloud accounting growth, to grow the small business platform and to build Xero for global scale and innovation. So these 3 anchors are what we really reflect on regularly as we look at our business and how we develop it. So starting with the adoption of cloud accounting, I think this is a really important one to reflect on and to discuss the progress that we're making. Our biggest immediate opportunity is really to keep driving the growth of our core accounting offering in our existing markets as well as looking to further opportunities in other geographies.
The opportunities here are significant because you consider the current level of adoption of Small Business cloud accounting globally is estimated to be less than 20% of the total potential market in the English speaking countries in which we operate. The level of adoption in Australia and New Zealand is much higher. It's product innovation 0 has pioneered over the past decade and also the fact that those megatrends and conditions I mentioned have been very positive in supporting the growth of our business in Australia and New Zealand. In terms of what we delivered in fiscal year 'nineteen, our progress with a net 432,000 subscribers joining Xero over the year, growing our overall subscriber numbers to more than 1,800,000 at the end of March. That's growth of 31% on the prior year.
As Kirsty mentioned, we're very pleased with the progress we made outside Australia and New Zealand, which underscores increasingly global makeup of our business. And the standout result there for the year was in the UK. We see that strength continuing as the UK Making Tax Digital initiative continues to encourage more and more businesses to be digitally connected. We added 151,000 subscribers in the UK in fiscal year 'nineteen with 108,000 subscribers added in the second half of fiscal year 'nineteen. So we see this continuing with compliance driven demands for Xero's cloud accounting products being a continuing and strong trend.
Moving on to the second area, which is about small business platform. This is central to our future and core to our strategy. Xero's birth in the cloud established us as a platform for collaboration between advisors and small businesses. It's from these origins we're able to extend the platform beyond bank fee connections that provide even better data and information regarding the financial performance and health of small businesses to many other applications that connect Xero. On the Xero platform, we now have over 200 connections to banks and financial services providers around the world.
And our near term focus on continued platform growth is about driving workflows and deeper partnerships with financial service providers, especially in the area of payments where we've extended our partnership recently with Stripe, a leading payment provider to deliver a seamless payment integration into Xero's core invoicing workflow. We're also pursuing opportunities to better leverage our ecosystem of more than 700 application solution providers. As we've increased our focus on the growth opportunities, it's become clear that our platform strategy is embedded in every aspect of what Xero does in our core technology, product, partner and corporate strategy functions. Essentially, as time goes on, the distinction between core accounting or cloud accounting and Xero as a platform becomes very much unclear because the 2 are 1 and the same or extend from 1 to the other. Finally, I want to talk sorry, in terms of the performance of the small platform and the new revenue streams we see around that, we've continued to progress in commercializing this opportunity.
Platform and other non core revenues grew 63% year on year and from 7% to 9% of our total revenues. So in the form of add ons such as expenses, payroll, adjacent products, also hub doc and our financial transaction revenues, those all collectively grew by over 100%. So finally, building on global for global scale innovation, this is our 1st strategic priority and it's incredibly important. In FY 'nineteen, we took a number of strategic steps to build the foundations of a business, then 3 or 4 years will be significantly bigger than 0 today. During fiscal year 'nineteen, these steps included our acquisition of Hubdoc back in August of 2018 as an important step towards our vision of code free accounting.
We're very pleased with the performance of Hubdoc since we acquired the business and we're excited about how we can further leverage this technology better serve our customers and partners and improve the workflows they care about. While smaller by comparison, the acquisition of Insta File in the U. K. Helps us accelerate the adoption of cloud accounting in the U. K.
This is because we're building the acquired capability into our UK 0 tax offer, which will we expect to see having the same acceleration of adoption that similar functionality provided us in Australia and New Zealand. Again, making those workflows that accountants and bookkeepers and small businesses require to execute as efficient as possible. Graeme touched on the convertible note issue as did Kirsty. We raised US300 $1,000,000 in capital. That has given us financial flexibility to support our platform strategy.
We're continually evaluating a range of potential M and A opportunities that we screen based on how they support our strategic priorities. Also as Xero continues to grow, investing to build capabilities to support global scale and innovation includes a significant focus on growing talent and improving our business processes, all our business process for operational excellence and scale. During the year, we focused on continuing to develop our capabilities across technology, product management, strategy and M and A. We have also brought a number of senior people into Xero to strengthen our capabilities in those areas and our leadership team. In the 1st few months of fiscal year 'twenty, we made 2 further key appointments to our team.
Tony Ward joined us as President of the Americas, responsible for leading our business across U. S, Canada and South America. Tony brings tremendous technology industry sales, marketing and product management skills to 0, having held senior positions at Microsoft, LinkedIn and most recently Dropbox. Tony is Canadian born and bred and also has lived for many years in New Zealand and Australia. We also appointed Damian Tampling as our Chief Strategy and Corporate Development Officer in May.
Damian joined us from Deloitte and brings deep technology and digital experience from a consulting, business management and investment perspective across many industries, including Damien will lead and does lead these strategically significant areas of the business. Damien will lead and does lead these strategically significant areas of the business. We're also announcing this week that Kerry Goeman has decided to leave Xero after 3 years with us to take up another career opportunity. We're extremely grateful to Keri for the contribution to Xero in her roles leading the realignment of our business in the Americas and more recently in leading our small business platform team. As I mentioned earlier, our platform is core to everything we do.
So going forward, we're building on Kerry's work by aligning deeply into the core technology, product and corporate management and corporate development functions, whilst maintaining specific focus on payments and the development of our application ecosystem under the specialist executive leadership and business units we have in place. We wish Keri well in all her new endeavors. So lastly, the outlook for fiscal year 'twenty, which is unchanged. Xero will continue to to focus on growing its global small business platform and maintain a preference for reinvesting cash generated subject to investment criteria to market conditions to drive long term shareholder value. Free cash flow in the financial year to 31 March 2020 is expected to be similar proportional to total operating revenue to that reported in the financial year to 31 March 2019.
I started today by saying how excited I am by the opportunities we have and the value that Xero can bring and is bringing to small and our community that has for far too long been underserved. So on behalf of our whole team here today, we are proud and privileged to be in a position to make life better for people in small business and their advisors, and we'll continue to seek and deliver to deliver value to them and to you, our shareholders. So thank you to all of you. And on that note, I will hand over to Graeme before he opens the floor to questions. Thank you very much.
All right. Thank you, Kirsty, and thank you, Steve. All right. We get to the point of the meeting now. Are there any general questions that you might want to ask either the Board or management?
Gentleman here, row 3. Yes, no red cards.
Yes. Good morning. I'm Colin Apjeet, shareholder. Just a couple of comments and a little bit of feedback. First of all, I'd like to say I'm pleased that the company is still growing.
And I think you deserve some congratulations for the effort you're putting in there. And of course, we're all looking forward to further growth in the future. This is just the beginning, I feel.
Yes.
The second thing I'd like to just say, I'm very grateful for the choice of the venue for the Annual General Meeting.
All right.
I wasn't at all confident that I would ever have the chance to attend an AGM of Xero ever again. Once the company moved to the ASX, I'm very pleased to say that that was a really good move. And let's hope that most of the AGMs can be here. I'll leave that for the Board to discover. A couple of other things.
One is, I was absolutely flabbergasted as the first AGM I've been to have a public company where there are no annual reports available when you arrive. I found that most unacceptable.
All right.
I know we're a digital company. I know you can get it online, but when you come to a meeting, it's not too hard to just pick up a report at the door and check out IFRS 19 and whether or not we've had a benefit or a cost for implementing new rules. So that would be really great if you could conform to the norms. And the other thing is this is a very fast moving company. Let's hope that speed continues.
But I'll just ask the Board to consider, is 4.5 months a good timing between the end of the financial year and when the AGM is? I know there are a lot of factors that go into that because they're a public company. But I think that's really quite slow to have the Annual General Meeting at this time when the results relate to March. So I'd ask you to just consider that and if there's any possibility of speeding it up, I think that would be beneficial.
Yes, I can respond to that. So first, thanks very much for your comments. I'm glad we have made you happy by having the AGM here. It's certainly great to be in Zero's home country. And we will certainly have some annual reports available next year.
So yes, no issue with that. The reason why the timing is driven really by Board meetings because we have company, we would be hard pushed to have the AGM in our May meeting, because it would be really quite We will note your comments. We'll see if there's some other things we can do, but it's largely just not wanting to request primarily Dale and myself to making another big long haul flight just for the AGM. So we'll look at it, but that's unfortunately the reality of why it's substantial amount of time between the end of the year and the meeting. Thank you.
Any other questions? Yes, gentlemen here in row 3. Here in row
3. Tony Sullivan, shareholder. It's now, as the previous gentleman said, 4.5 months since the end of the financial year. I wonder if Steve could give us an update of where the subscriber numbers are sitting now.
All right. Steve, I don't think you can.
Unfortunately, I'd love to, but I can't. I really can't. So thanks for the question, but I would be going into a lot of trouble if I did.
No, it would be selective disclosure issue. So and obviously, we have a twice a year reporting cycle, and we will update you at the next appropriate time.
Gentleman there? My question may be in the similar category, but to Steve, the cash you've raised to make purchases, is there anything you can reveal? I mean, obviously, payments is one strategic line you're pursuing. Is there anything you can reveal at this meeting in terms of what your other strategic channels are that you're looking at with that cash?
Yes. Look, unfortunately, I can't say anything specific. Obviously, when there's news, we'll be you'll be the first to know. There's certainly tremendous amount of work going on. There's also, by virtue of the opportunities we have, many different dimensions to what we might do.
So we're doing some really thorough work around this, considering a number of different potential pathways. And we'll be sure to let you know once we land with a very clear and specific outcome there.
All right. We have a question actually online. I know there's other questions here. I'll come to you in a second. There's an online question.
I think, Steve, you should take this. Can you talk about your strategy and progress in the U. S. Market specifically, please?
Yes. Look, the I'd say overall with the U. S. Market, it's very much about the focus we now have on executing the strategies and the actions that worked for us elsewhere. We repositioned the business almost 2 years ago to really orient it towards executing what we call the playbook, and that playbook has 3 elements to it.
The first is about really driving the connection and relationships with accounts and bookkeepers. We just recently had 0 1,000 people turn up, tremendous enthusiasm for what we are doing and council bookkeepers there who have been with Xero on the journey for a while, but also many new ones. So we see the in a sense that there is that interest and opportunity in that market. The second then is the bank feeds and connections with banks, which takes time in these newer markets and particularly in countries where perhaps the banking systems aren't quite as progressive as they have been in Australia, New Zealand and the U. K.
The U. K. Financial services is definitely moving into a very strong innovation. So that's the second element. So we have to be patient, work hard to execute to get those connections.
And the third then is the different things we have to do to address the local compliance requirements in that market. So for example, in payroll, we were trying to build a payroll solution. We changed strategy because the U. S. Is many different markets within one.
So we have to be very clever about where we invest to meet the market and to meet the needs of our customers around tax and other compliance needs. So we're definitely working on that and we just have to be patient. We've got a really great bunch of people over there working hard and we just say we are patient and watching the progress very carefully. All
right. Gentleman down
there. Peter Panam, shareholder. I'm interested in just focusing on Australia and New Zealand for a moment. You mentioned that approximately 50% of small businesses have moved to the cloud. I'm interested in 2 things here.
1, at some point, we could expect the number of subscribers to start to plateau as reached saturation point? And also, if you could give us a picture of where the market share lies with other cloud providers for small businesses?
Yes. Look, I think that sorry, James.
Yes. No, go ahead.
Well, you make a good observation that at some stage, you get a penetration in number of subscribers that might I hate using the word saturation because I think that is the last word we should be using, 0, because the truth is we do have connections to many, many small businesses in Australia and New Zealand, but there's tremendous opportunity for us to upgrade the depth of their subscription. And my friend Craig Hudson here, who opened the meeting, is leading a lot of our strategic thinking around this in New Zealand. And that's really about upgrading subscriptions to be using subscriptions that have more functionality. There's the ability to buy additional products today, payroll, expenses, projects. So we have more in the portfolio.
We'll also partner more with our app ecosystem over time to put more solutions in place. In fact, Craig and the New Zealand team are focused on segments of the market now, agricultural customers, and they're moving into other verticals as well. So there's enormous opportunity for us to go beyond the base subscriptions to providing those customers with more value and also the benefit of financial transactions like payments and services like that. So in no way, whilst we might see the numbers at 50%, we don't relate that to the total revenue opportunity for Xero because there's subscription revenue, but there's also services opportunities that are evolving. So that's and then in terms of market share versus our competitors, it's look, I can throw numbers out there.
It's I'm not sure that we have there's no I don't think there's an official referee on this. It's not an industry that has a 3rd party that can tell you. I'd feel a lot more comfortable, by the way, if it was a 3rd party source. But clearly, we do have significant market share in Australia and New Zealand, but the truth is, by no means do we take that for granted. This is a competitive industry and one that's changing all the time.
So our focus is on the customer. And I know that Craig in New Zealand and Trent in Australia are really focused on how do we provide our customers with more of the benefit that comes from being connected in the cloud. Thanks for your question.
Gentlemen in row 2.
Thank you. Tony Mitchell, New Zealand Shareholders Association. I'd just like to firstly congratulate management on the reports that we've seen and the achievements today. Not only does it show there, but I actually work very close to where you are in New Zealand. In fact, my office is the old office and above La Cigale, and you've left it very well, kitted out for us.
So thank you very much. But what I see is Red Rabbit Cafe, so very it's a favorite cafe for all the Xero people. There's a lot of happy people having great conversations, nothing confidential by the way, just to make everyone rest assured. But what I see matches what you actually say up here as well with the people and the energy. So congratulations on that.
My question is not to management, it is to the Board and it is to the directors to be able to we've talked a lot about the growth opportunities. But as we know, part of the Board's responsibility is to really navigate their way through the big risks as well. So I'd like to know what you see as the 3 big risks and not just what you are what they are, but I'd also like to know how you're measuring them and then also how you are checking what management are telling you that they're doing to negate them as well. So those three things would be much appreciated. So management can have a rest of this question.
Okay. Well, I'll start maybe on that. And then Lee, I think you can certainly contribute. So I mean, I think clearly, the Board fundamentally is there to sort of judge the strategy of the company. So I think strategic risk by definition almost is the most important activity that the Board addresses.
And the way that I think about that, and again, other directors can weigh in after this, is to really try and make sure, a, that the company is focused on the big opportunities. And then secondly, that they're allocating capital. And I don't just mean cash. I mean, potentially cash, but also resources, people on those big opportunities and that we're measuring those initiatives that the company is undertaking. So I think over the last year, one of the great things that Steve and the team have done is really get a lot crisper about what are the opportunities the company is pursuing and what are the resources that are being brought to bear.
And again, unfortunately, what are some of the things that we can't prioritize because there's simply too there's too much to do. And I think that's a lot of strategy as well as deciding what not to do. To answer your question on the measures, I mean, clearly, each of those, so one of them might be I'll tell you, win in the U. K. That's one of our strategic initiatives.
And so that would be that would have very clear sort of revenue new recurring revenue sort of measures. It would have some market share information. It would have product ARPU, a whole set measures around our activities in the U. K, but we see that as a very competitive market, but a very big and important market. The 2nd largest risk, I think fundamentally that any cloud company faces is and it's a reputational risk as well as a sort of a customer risk, which is around security, data security, network security.
And it's not just it's not just security, it's availability and scalability of the platform. We've gone from, you've already heard, a few 100,000 subscribers a year ago to close to 2 1000000 and clearly still growing at a very rapid pace. And so we owe it to our customers and partners to continue to invest in all of those three things. And to say what are the measures, I mean, ultimately, there are obvious measures, things like uptime and bugs, all those sort of traditional software measures that we have that relate to software performance. In terms of security, the Audit risk management committee specifically meets with both the CTO and the Head of Security, at least twice a year to sort of review what their activities are, what they're working on, where we look at any issues they've had.
And clearly, you don't have a website or business big as zeros and not have people trying to do bad things to you. So we take that very seriously. I think probably the third thing this once you get to number 3, gets a little more a matter of opinion, I think. But I certainly think availability long term of talent for the company. We have to really think about how the company grows.
We love being headquartered in New Zealand, but there are obviously a limited number of technologists in the country. So over time, we'll seek to add other centers to continue to build out our product and services. So, I mean, there are others that I could mention, but ultimately that's about really availability of talent is sort of the measure there and how we're doing on thinking long term about those centers. Lee, anything you want to add to what I answered?
That was a very good answer. So I have chaired the Risk and Audit Committee now for a couple of years. And I think we have continued to really build our maturity in this space because I think with such a growing company, it's very easy to quickly focus on technical risk. And so what we really wanted to do was to make sure that we had a really robust framework in place so that we can categorize our risks, but see it at a strategic level, not just at a technical level. So we kind of split it into kind of 4 key areas.
So we have the legal and compliance risk, do no harm, financial, operational and then strategic. And actually, we use it as a way to kind of play war games in a sense, which is scenario planning. We take the opportunity to have management. They sit in the room, and they really look at what are all the worst case scenarios that could occur for us and how do we think about them. But the flip side of that, what are the most amazing scenarios that could happen and how do we measure against those?
And so in risk and order, we have them come back. We have I think last we saw, we took it down from like 100 if you took the long list. And we kind of stripped it back to I think it got to roughly 48. Then we categorized them, and we made sure we put some values against them. But I think every day, the culture of the organization is organization needs to be do no harm and make sure that you're focusing on the right things.
And I think culture really leaves the risk appetite. But having said that, we do have a process in place and a formal process in place that we
that? Okay. Question at the back.
It's Ross Stevenson, a shareholder. First of all, congratulations on the results. I think growth and all that sort of stuff has been very impressive. I'm wondering about the opportunities that exist in other areas like we've seen fantastic growth in the U. K.
And the emphasis obviously has been on English speaking sort of areas of the world. Does the company have any plans about opportunities other areas like throughout Europe and other places? I imagine some of the difficulties might involve state by state stuff like in the U. S, but what plans might there be for that?
Steve, would you like to take that?
Look, it's a great question. Thank you for that. I what I say is that we're well aware of the opportunities outside the English speaking markets. We at the same time as knowing there's tremendous opportunity there for us and plenty to do because our entry into Canada was recent, the country into South Africa was recent, Asia recent. So we've only recently moved into a whole bunch of new markets in a substantive way.
So I would say it's a mid sort of like a mid term strategic view. So I'd say it's not something I'd expect in the next short term, but it's definitely something we've got our eyes on sort of in the midterm of our strategic thinking. Thank you.
Okay. No more questions online. Any more questions in the room? Sorry, gentlemen there, yes.
My question is along the same lines basically. In view of Halloween coming up and Brexit, do you think the UK is really a good market to concentrate on or whether you might be concentrating on other places in Europe like Netherlands, Dublin,
Frankfurt? Steve, I'll let you take
that. Okay. So Ireland is a market that we have our eyes. We're actually active in Ireland. In terms of the short answer, U.
K. Is a great opportunity for us. I think you have to look long term when you make that assessment. And whilst obviously, the challenge is there and I'm not sure I should throw this at my dear director friend, Dale, but we can't sort of frame our whole view of the future of the U. K.
Based on the current sort of back and forth on Brexit. There in the short term, but longer term, this is a very, very important market for Xero.
All right. Any more questions? Doesn't look like it. Okay. That brings us to the end of Xero's Annual Meeting for 2019.
In a moment, our formally closed meeting. If you are intending to vote on the formal business of the meeting, please use the online platform or the Linked Vote app. And equally, you should now finalize and submit your votes as voting will close in 5 minutes time. If you hold a yellow voting card, please make sure you have marked your votes on that card now and hold it up for the results of the voting will be released on the Sx platform once the votes have been counted following this meeting. I want to thank you all again, both here in the room and online.
It's just been obviously a great year and we're so excited about what's to come and look forward hopefully to seeing you all next year. So I now declare the meeting closed.