In its latest annual report, business platform Xero (XRO) has made its first full-year profit, but warned that COVID-19 will impact its bottom line in the 2021 financial year.

The New Zealand company made a NZ$3.3 million (roughly A$3.07 million) net profit in the financial year ending on March 31 2020 a huge turnaround from the NZ$27.14 million (approximately A$25.23 million) loss in FY19.

The ASX-200 lister also enjoyed a 30 per cent spike in its revenue for the full year to March in the year-on-year statistics. Revenue for the 12 months through to March hit NZ$718.2 million (roughly A$667.69 million), a sharp increase from NZ$552.8 million (approximately A$513.92 million) the year before.

Additionally, Xero also saw its annualised monthly recurring revenue grow 29 per cent to NZ$820.6 million (roughly A$762.88 million). But despite the growth, the company says the coronavirus' impact on its bottom line is imminent.

While COVID-19 brings uncertainty, our long-term strategic ambitions are unchanged ... now more than ever, small businesses are recognising the benefit of being able to use the cloud to run their businesses and manage their finances, the company said in a market statement.

Further, in a 26 per cent subscriber spike, the company added 467,000 subscribers over the year and now has a total of 2.285 million subscribers.

However, CEO Steve Vamos said many of Xero's customers and partners are having to adapt the way they operate during these current market conditions and difficult times.

"While COVID-19 brings uncertainty, our long-term strategic ambitions are unchanged and we remain committed to our three strategic priorities: to drive cloud accounting around the world, grow the small business platform, and to continue to build for global scale and innovation," he said.

"Now more than ever, small businesses are recognising the benefit of being able to use the cloud to run their businesses and manage their finances," he added.

While Xero has performed strongly in the 2020 financial year, it has admitted that trading in the early stages of FY21 has been impacted by the pandemic.

Xero is down 5.78 per cent on the market this morning, trading for $78.93 per share at 10:26 am AEST.

{Xero (ASX:XRO) achieves first full-year profit, warns of virus impact in FY21, Lisa Simcock, Market Herald, 14 May 2020)

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