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QXL jumps despite loss
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February 8, 2000: 6:28 a.m. ET
Online auctioneer posts wider 3Q loss; membership triples, shares soar
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LONDON (CNNfn) - British online auctioneer QXL.com posted a sharply higher third-quarter loss Tuesday, but higher sales and a three-fold rise in its membership pushed its shares higher.
The London-based company posted a pre-tax loss of 38.1 million pounds ($60.6 million) in the quarter ended Dec. 31, more than triple its 11.2 million shortfall in the second quarter of the year. However, membership climbed to 400,000 at the end of January from 130,000 four months earlier and sales climbed 81 percent to 1.55 million pounds in the third quarter compared to the previous three months
Analysts seemed unconcerned by the losses saying the company was on track with its business model.
"Today's results were good in a couple of terms. They showed very strong growth in user numbers and a very strong growth in gross sales," said Shane Leonard, IT analyst at Credit Suisse First Boston.
QXL [LSEQXL] shares were almost 7 percent higher at 1,390 pence in mid-morning trade.
The company, which floated in October, attacked a change in U.K. tax law which it said forced it to take a 15 million pound charge in the quarter for sales of employee stock options.
QXL is the largest online auctioneer in Britain and the Netherlands, and purchased sites in Denmark and Norway as well as launching operations in France, Germany and Italy. The company said almost half its members - those registered to take part in auctions - came from outside Britain.
The value of goods sold in QXL auctions climbed 43 percent to 5.2 million pounds during the third quarter.
Gross margins on transactions climbed to 10.4 percent from 8.2 percent as the company continues to shift away from buying goods for sale to acting solely as an intermediary.
QXL also signed a second contract with airline company British Midland Tuesday to auction 20,000 seats across Europe. 
--from staff and wire reports
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