QXL

Hi Folks

I guess it time to remind you all that beneath all the doom and gloom created by months of negative postings, QXL are actually doing exactly what they said they would do in Q3 i.e. Cutting losses, signing partnership agreements and growing revenue turnover in Q3.

To help keep your minds focussed on the postive side of QXL here is a quick reminder of what QXL have BEEN very very quietly achieving in Q3.

1. They have significantly increased the number of Merchant partners trading on all the QXL sites in Europe. For example on the UK site the number of Merchant partners peaked at 82 in the 2nd week of December, up from 26 in Q2. As a result the quality of goods on the sites for auction has increased together with a significant increase in the number of items per listing.
2. As a result this has attracted more bidders to the sites in Q3. As a consequence QXL’s auction success rates have risen significantly in Q3. To demonstrate this here are some of the auction success rates in Q1 and Q3 ( Average of 3 sets of readings )
UK, 6% Q1, 27.6% Q3
Germany, 8% Q1, 38% Q3
Switz, 8% Q1, 37.6% Q3
Sweden 4% Q1, 40.6% Q3
Denmark 12% Q1, 29.3% Q3
Norway 4% Q1, 25% Q3

3. In Q3 QXL have, for the first time, enjoyed a FULL quarter of agency revenue from the Netherlands, Norway and Denmark. The affect of this has been to increase the agency based listing from 3.6 million in Q2 to 5.2 million in Q3.

4. The Poland site has continued to grow strongly in Q3. With no competition from Ebay, the listing numbers has now grown to an average of 116,000 for the quarter, peaking at 135,000 in the 1st week of December. With both success fees and listing fees now being levied in Poland and the average auction success rate for Q3 reading 17.3%, the sites contribution to QXL’s revenue turnover is significant.

5. With no significant competition to QXL in Sweden and Switzerland where success fees have been established for several quarters now, we should see that listing fees have been levied in Q3. With no competition in Norway and Denmark these countries should follow next in Q4.

6. In Q3, QXL have very quietly signed up some very significant partnership deals that will see QXL enter into the broadband field. The recent deals with Sceneone, Bravo and Flextech all point to QXL entering soon into the TV auction arena.

7. QXL have quietly continued to cut their costs in Q3. Now that QXL have transformed themselves into an agency based auction company, we should see a continued reduction in their Marketing and Sales expenditure, reductions in their administration costs and a continued reduction in their technology costs. These reductions in running costs will be significantly helped by Mark’s decision to further centralise in Q3 QXL’s main European operations to their London offices. When you visit the London Offices, you will see the European Richardo operations are now on one floor of the building with the original QXL operations on the other floor and both being served by central administration and technology.

8. Finally, looking to the future i.e. Q4 its obvious from the recent growth in listings on the French site that this will be the next site to be converted to agency fees.This development will help QXL in its drive to increase revenues.

So despite what the doom and gloom merchants write about QXL on this and many other boards, QXL have quietly behind the scenes continued in Q3 to build on their business.

Sooner or later folks will realise this. Roll on Q3 results.

When you analyse the above and consider the recovery that other internet stocks associated with retailing are now seeing on announcement of improving results, QXL at just 2.4p must now be a STRONG BUY.

That said, having heard the bullish facts on QXL lets hear the bearish facts on QXL.

Come on the bears, forget all the negative hype and taunting one liners that we constantly get from you lets have some facts from you on how badly QXL are actually doing in Q3. YES Q3 FACTS!!!!!!!! I know its hard for you but please concentrate on the present and stop harping on about the past.

Come on see if you can convince me not to buy anymore!

Happy New Year to you all.

Bobsworth