QXL Ricardo cuts losses

Online auctioneer QXL Ricardo showed signs of recovery today after it revealed a 53% rise in revenues and a sharp reduction in losses.

The auctioneer – once tipped as Europe’s answer to eBay – is expected to announce its first annual pre-tax profits since 2003 when it post results later this year.

Chief executive Mark Zaleski said the group was trading in line with market expectations after cutting pre-tax losses to £140,000 (€203,000) during the third quarter to December 31, after losses of £654,000 (€952,000) in the same period in 2004.

Revenues were 53% higher at £3m (€4.37m) and 21% stronger than the previous quarter.

The business auctions a range of goods from stamps to toys, selling at an average price of £16 (€23).

During the period its gross auction value was £49m (€71m), up 62% on 2004.

QXL operates in nine European countries and its strongest markets are in Norway, Denmark and Switzerland, where it is the market leader.

In a statement it said it focused on online advertising strategies across its territories and in the UK teamed up with Johnston Press to publicise on its newspaper web pages.

Its sales and marketing expense increased 35% to £1.9m (€2.7m) for the quarter and it said it expected the expenditure to increase as the business grew.

And an £302,000 (€440,000) exceptional charge was incurred from an ongoing legal dispute over the ownership of its Polish operation.

The business was formed by ex-Financial Times journalist Tim Jackson in 1997 as a business-to-consumer platform selling IT products. It moved into consumer auctioneering in 2000 just as eBay was taking off in the UK and US.

As a result, Mr Zaleski said its UK market has remained relatively small.

The company employs 10 people in the UK, predominately at its London head office, and 130 around Europe.