QXL heralds onset of profitability

Dot.com icon QXL Ricardo has forecast the onset of profitability in most of its national operations.

The online auction house said that its Norwegian and Polish sites reached profitability in the April to June period.

"This is a key milestone," chief executive Mark Zaleski said.

And Mr Zaleski said most of the firm's 10 other national sites, including the flagship UK operation, were poised to follow suit "by the end of the year".

The firm's overall pre-tax loss of £4.87m during the quarter compared with a £10.7m figure a year before.

Costs cut

Mr Zaleski credited the improvement in the firm's performance largely down to growth of more than one third in the value of transactions handled by the site, and tough cost controls.

Expenditure on sales and marketing fell by 30% over the year, with technology spending plunging by 74%.

But Mr Zaleski warned that "further significant improvements" were needed to bring QXL as a whole to profitability.

Joint ventures

The upturn follows a switch to a commission-based auction model, from an original strategy which saw it buy itself goods for sale.

The firm has also pursued joint ventures, providing specialist auction services to sites run by partners including football club Manchester United and, in Spain, IDG magazines.

QXL also on Thursday announced a tie-up with Yahoo for providing co-branded auction sites in Denmark, Norway and Sweden.

The results also represent a further fillip for dot.com investors who, having seen their holdings plunge in value last year, have enjoyed some success this year.

Shares in Lastminute.com have more than tripled this year, proving one of the best performers on London's stock exchange.

QXL stock stood 11% up at 0.5p in morning trade on Thursday.