[London, ENGLAND] European auctioneer QXL ricardo plc
saw its shares dive Thursday after it announced deepening
losses and the need to raise 30 million pounds (US $43 million)
to avoid a cash drought in 2001.
QXL’s quarterly figures to the end of September 2000
showed a loss of US $96.8 million, a six-fold increase over
its second quarter losses. The company pointed to its
write-off of goodwill in its takeover of Swedish auctioneer
Bidlet as a major reason for the loss.
With shares plunging 20 percent in morning trading, QXL is
now a shadow of its former self, having lost 98 percent of
its value since March.
Nonetheless, Chief Executive Jim Rose seemed almost bullish
in talking about the business continuing to experience
solid growth, with an increased focus on multi-device access
through the PC, mobile telephony and television and several
significant corporate acquisitions.
Investors listening to the chief executive and then reading
the figures could be forgiven for thinking each referred to
a different company altogether.
“We are now achieving strong synergies through a number of
initiatives including rationalizing corporate overheads,
realizing efficiencies from the migration of Bidlet and
ricardo to our agency-based model and to a single technology
platform,” said Rose.
He went on to say that proforma operating expenses have
decreased significantly quarter on quarter and he expects to
see additional reductions in future quarters.
However, without liquidity, even the most energetic and
acquisitive company will falter eventually. To raise
the additional money needed to “see it through to
profitability” QXL has agreed to sell bonds and shares
to investors.
The pace of acquisition has been frenetic at QXL in the
past few months. The company took a further 50.2 percent
of the issued share capital of Bidlet in September, and
increased its stake in ibidlive NV from 50 percent to 62
percent in October.
In November, QXL issued and listed over 126 million shares
on the London Stock Exchange as a result of its acquisition
of pan-European online auction community ricardo.de AG,
with 141 million more shares to come.
Trading in QXL shares will also take place on the Frankfurt
Stock Exchange in the week commencing December 4, a date
which is a week later than previously announced.
QXL pointed to recent developments to show that its
business was sound, despite its complex finances. Among
the business developments are its strategic alliance with
travel agent Thomas Cook, its travel agreements with
British Midland and Virgin Holidays, its agreement with
ntl to bring online auctions to all ntl platforms, and
its announcement of QXL.tv.
Against these must be set its relatively
modest turnover of US $8.52 million for the quarter
ended June 30, 2000, and its deepening losses.
