RNS Number:5072A
QXL Ricardo PLC
19 July 2007
QXL ricardo plc
The Matrix Complex
91 Peterborough Road
London SW6 3BU
PRESS RELEASE
QXL ricardo plc - First quarter results 19 July 2007
Strong revenue growth and expansion into Russia
QXL ricardo plc ("QXL" or the "Group", QXL.L) today announces its results for
the first quarter ended 30 June 2007. Comparisons for revenue and trading profit
are given below for both actual and pro forma performance as the results of QXL
Poland and its related Eastern European businesses have only been consolidated
since 10 August 2006.
Q1 financial highlights
* Revenue increased to #15.2m
* Actual: Up 348% (Q1 06/07: #3.4m)
* Pro forma: Up 49% (Q1 06/07: #10.2m)
* Significant investment in marketing, some brought forward from H2
* Trading profit increased to #3.4m
* Actual: Up 430% (Q1 06/07: #647,000)
* Pro forma: Up 10% (Q1 06/07: #3.1m)
* Profit before tax increased 608% to #3.1m (Q1 06/07: #442,000)
* Net profit increased 505% to #2.2m (Q1 06/07: #358,000)
* Basic and diluted earnings per share of 5.1p and 4.2p respectively (Q1
06/07: 1.0p and 0.9p respectively)
* Cash balance at 30 June 2007: #25.4m (30 June 2006: #3.2m)
Operational highlights
* Agreement to acquire a 30% stake in Molotok.ru, Russia's leading
online trading site
* Strategic initiative to offer web shops and e-commerce solutions to
small businesses in Poland
* Launch of fully-integrated mobile solution in Switzerland
Commenting on the results, Christian Unger, Chief Executive Officer, said:
"This quarter we have achieved 49% year-on-year revenue growth on a pro forma
basis, driven by strong trading across the Group, especially in our Eastern
European businesses. We have brought forward some marketing investment from the
second half of the year and continue to see strong growth, particularly in our
less mature markets.
I am excited by the prospects for our investment in Molotok, which will give QXL
a leading position in the key Russian market. We expect to expand further in
Eastern Europe in the current calendar year and remain focused on these and
other development opportunities."
For further enquiries please contact:
QXL ricardo plc
Alison Cabot, Investor Relations
Christian Unger, Chief Executive Officer
Robert Dighero, Chief Financial Officer
Tel: +44 (0)20 7384 6310
Financial Dynamics
James Melville-Ross
Juliet Clarke
Matt Dixon
Tel: +44 (0)20 7831 3113
Financial highlights for the quarter ended 30 June 2007
Pro forma
Quarter ended Quarter ended Quarter ended
30 June 30 June 30 June
2007 2006 2006
Unaudited Unaudited Unaudited
#000's #000's #000's
Revenue
Western Europe 3,622 3,384 3,384
Eastern Europe 11,551 - 6,802
Total revenue 15,173 3,384 10,186
Trading profit 3,432 647 3,124
Trading margin 23% 19% 31%
Profit before tax 3,131 442 -
Net profit 2,167 358 -
Gross merchandise volume*
Western Europe 70,269 60,153 60,153
Eastern Europe 166,791 - 98,522
Total gross merchandise volume 237,060 60,153 158,675
Monetisation** 6.4% 5.6% 6.4%
* Gross merchandise volume is the estimated total value of goods traded through our sites
** Monetisation is defined as revenue as a percentage of gross merchandise volume
Basis of preparation:
1. The above pro forma analysis presents key operating and financial data
for the Group on a combined basis as if the Eastern European operations had been
owned throughout the comparative period rather than from the date the Group
achieved effective control. The results of Ceneo SA, acquired in a separate
transaction at a later date, have not been included in the pro forma results of
the Eastern European businesses and are not material.
2. This pro forma analysis is unaudited.
3. The entities comprising the Eastern European businesses had not prior
to their acquisition been consolidated into a single grouping since they had
different ultimate owners.
4. As stated in the prospectus dated 29 June 2006, prior to their
acquisition and consolidation into the Group's results from 10 August 2006, the
Eastern European businesses had limited financial and other formal control
processes that would usually be in place for the preparation of management and
financial accounts. As a result, limited reliance should be placed on their pro
forma figures, particularly as quarterly results had not previously been
prepared by these businesses and such results (unlike their results for the
financial year as a whole) had not been audited.
5. Certain costs included as costs of sales in Eastern Europe in the pro
forma period are presented as operating expenses in the current financial year
in line with the Group's accounting policies.
Operating review
In order to present underlying trends more clearly, this operating review
compares this quarter's results to pro forma results as though the results of
QXL Poland and its related Eastern European businesses had been consolidated for
the quarter ended 30 June 2006.
Group revenue for the quarter ended 30 June 2007 was #15.2 million, a 49%
increase compared to the same period last year. Gross merchandise volume, the
value of goods traded through our sites, reached #237 million for the quarter,
also increasing by 49%. At a Group level the monetisation rate therefore
remained steady at 6.4%.
Operating expenses (excluding non-trading expenses) in the quarter were #11.5
million, due to substantially increased marketing spend. As a result, trading
profit for the quarter increased 10% to #3.4 million compared to #3.1 million
for the quarter to 30 June 2006.
Our Eastern European businesses, primarily in Poland, delivered a very strong
performance, with revenues of #11.6m for the quarter representing a 70% increase
compared to the same period the previous year. This growth rate was not
materially impacted by exchange rate movements.
Our main Polish business, Allegro, hosted its largest ever meeting for members
in June, with a record 2,000 attendees. At the event, members attended a variety
of workshops designed to help sellers and buyers improve their trading success
on Allegro. This is a key marketing event for the business and contributed to
the relatively high sales and marketing costs in the quarter.
We continue to seek other innovative marketing opportunities, including branding
a 60 metre airship with the Allegro.pl logo. The airship made its maiden voyage
in Allegro colours over Warsaw in mid-June and the campaign has been well
received with extensive media coverage. The airship will visit 16 Polish cities
until the end of September alongside special events and competitions to win a
ride.
In Poland we launched an initiative to offer web shops and e-commerce solutions
to small businesses. This is another step in our strategy to develop
transactions services that complement our core trading platforms and we look
forward to building this area of online commerce in Poland and other countries.
Our Western European businesses, primarily in Switzerland, Denmark and Norway,
delivered combined revenues for the quarter of #3.6 million, a 7% increase
compared to the quarter ended 30 June 2006. This growth rate was impacted by
exchange rate movements and the closure of some smaller Western European
operations over the past year. Excluding these factors, Western European
revenues increased by approximately 15%.
We were pleased to see strong trading levels in Switzerland, the largest of our
three businesses in this region, which we believe has been helped by the
branding campaign that commenced earlier in the calendar year. Recognising the
increasing importance of mobile internet access, we have launched a
fully-integrated mobile solution in Switzerland. Offering easy-to-use bidding,
buying, search and account management functionalities, the solution will be
rolled out to other countries in the near future.
Russia
On 18 July 2007, we signed a conditional arrangement to acquire a 30% stake in
Molotok.ru, the leading online trading site in Russia. As part of the
arrangement, the shareholders are investing approximately #2.5 million into the
business (of which QXL will invest approximately #750,000) and QXL will take
over the management of Molotok's operations and IT systems. The acquisition of
QXL's initial 30% stake is expected to be finalised later this quarter following
the completion of a legal restructuring of the business. The agreement also
provides for QXL to increase its stake to 51% depending on the future
performance of the business.
The acquisition reflects our strategy to expand further into Eastern Europe, and
into high-growth markets where we believe we can be market leader. Russia, with
a population of over 140 million people and a rapidly growing broadband
penetration, is a complex market, but a key opportunity for us and we look
forward to growing the business with the benefit of the local expertise of the
Molotok team.
Offer for ricardo.de AG
On 18 May 2007 QXL GmbH, our wholly-owned subsidiary, announced its intention to
make an offer for the outstanding publicly held shares in ricardo.de AG at a
price of Euro14 per share. At the time of the announcement, the Group owned
approximately 93.7% of ricardo.de AG's issued share capital - the cost of
acquiring all the outstanding shares at the offer price was therefore
approximately Euro7.3 million.
The offer was formally launched on 27 June 2007 and will close on 17 August
2007. As of the close of business on 17 July 2007, the Group owned or had
received acceptances for the offer in respect of a total of 7,996,087 shares in
ricardo.de AG representing approximately 96.1% of its issued share capital. As
previously announced, assuming the Group holds more than 95% of the shares in
ricardo.de AG as at the close of the offer, it intends to implement a compulsory
purchase of any remaining minority shareholders in accordance with the German
Stock Corporation Act.
Board changes
On 1 June 2007 Philip Rowley joined the Board as senior independent
non-executive director. He will also serve as Chairman of the Audit Committee
and as a member of the Remuneration and Nomination Committees. Mr Rowley is a
qualified chartered accountant and was Chairman and CEO of AOL Europe until
February 2007 and, prior to that, Group Finance Director of Kingfisher plc.
Outlook
We believe we are well positioned to deliver continuing high growth rates, in
the shorter term from our existing markets and in the longer term from new
markets such as Russia. We expect to expand further in Eastern Europe in the
current calendar year and may work more closely with local partners in some of
the other larger markets.
Financial review
Unless otherwise stated, financial comparisons in this financial review relate
to actual, not pro forma, results and the results of acquired companies are only
included from the date of their acquisition. Where relevant and useful to
understand the Group's underlying financial position better, pro forma
comparatives have also been provided.
Revenue
For the quarter ended 30 June 2007, revenue increased 348% to #15.2 million from
#3.4 million in the quarter ended 30 June 2006 and increased 10% from #13.8
million in the quarter ended 31 March 2007. The year-on-year increase was
primarily due to the consolidation of the Eastern European businesses as well as
year-on-year increases in transaction volumes and gross merchandise volume
conducted through the Group's websites.
On a pro forma basis, revenue increased 49% compared to the quarter ended 30
June 2006, comprising 70% growth in Eastern Europe and 7% in Western Europe.
Cost of sales and gross profit
Cost of sales remained negligible at 2% of revenue. Gross profit therefore
increased in line with revenue by 348% to #14.9 million in the last quarter from
#3.3 million in the quarter ended 30 June 2006.
Operating expenses (excluding non-trading expenses as detailed below)
Sales and marketing expenses for the quarter increased 417% to #9.2 million from
#1.8 million in the quarter ended 30 June 2006 and increased 33% from #6.9
million in the previous quarter. The year-on-year increase was primarily due to
the inclusion of sales and marketing expenditure in our Eastern European region.
The increase compared to the previous quarter was due to a combination of the
branding campaigns in Western Europe as well as the acceleration of certain
marketing expenditure in Eastern Europe. As a percentage of revenue, sales and
marketing costs increased to 61% from 53% in the previous year and 50% in the
previous quarter. For the remainder of the financial year we expect sales and
marketing costs to decrease as a percentage of revenue.
Technology and development costs for the quarter increased 240% to #1.6 million
from #470,000 for the quarter ended 30 June 2006 and increased 12% from #1.4
million in the previous quarter. The year-on-year increases resulted primarily
from the inclusion of the costs associated with the operation of our Eastern
European businesses and continued investment in the Group's systems. As a
percentage of revenue, technology costs were 11% in the quarter, up slightly
from 10% in the previous quarter, but down from 14% in the comparative quarter
in the prior year as a result of the consolidation of the Eastern European
businesses where technology costs benefit from larger scale and lower staff
costs. We have started to introduce additional data centre capacity and expect
technology costs to increase slightly as a percentage of revenue during the rest
of the financial year.
General and administrative costs for the quarter increased 53% year-on-year to
#647,000 from #424,000 and increased 8% from #601,000 in the previous quarter.
As a percentage of revenue, general and administrative costs decreased from
12.5% in the quarter ended 30 June 2006 and 4.4% in the quarter ended 31 March
2007 to 4.3% in the quarter ended 30 June 2007. Going forward, we expect general
and administrative costs to increase, but to decrease slightly as a percentage
of revenue.
Overall operating expenses therefore increased 328% to #11.5 million in the
quarter from #2.7 million in the same quarter in the previous year.
Trading profit
As a result of the above, we recorded a trading profit of #3.4 million in the
quarter ended 30 June 2007 compared to a trading profit of #647,000 in the
quarter ended 30 June 2006. On a pro forma basis, trading profit for the quarter
increased 10% compared to #3.1 million in the previous year and pro forma
trading margin decreased from 31% to 23%.
Non-trading income and expenses
International Financial Reporting Standards ("IFRS") do not allow the
recognition of items as "exceptional" in the principal financial statements, but
the Group will, in addition to its IFRS obligations, continue to report
"non-trading items" separately for the purpose of calculating a "trading profit"
which it believes provides a better measure of performance of the Group's
underlying trading operations than does operating profit.
Other operating income
During the quarter the Group received a net #361,000 of deferred payments
relating to the sale of a non-trading Swedish subsidiary in 2005. The Group
reported no other operating income during the quarter ended 30 June 2006.
Share-based payments
In the quarter ended 30 June 2007, the Group recorded a share-based payment
charge, as required by IFRS2, of #196,000 compared to #132,000 in the quarter
ended 30 June 2006. The increase was due to higher fair-value charges for those
options granted in the intervening period as a result of the significant
increase in the Company's share price during that time.
Taxes on share options
The Group has accrued for expected future employer's taxes incurred on the
exercise of shares options by employees. During the quarter ended 30 June 2007,
the Group expensed #144,000 related to taxes on share options. These charges
relate primarily to movements in QXL's share price and not to the Group's
trading.
Amortisation of intangible assets
The Group has recognised goodwill in its consolidated balance sheet (principally
as a result of the acquisition of the Eastern European businesses) and according
to IFRS3 has separately identified and valued intangible assets arising on
acquisition. The goodwill is subject to an annual impairment review, but the
intangible assets are depreciated over their estimated useful economic life. As
a result, the Group recorded a charge of #478,000 in the quarter ended 30 June
2007. No such amortisation charge was incurred in the comparative quarter.
Operating profit
Operating profit in the quarter ended 30 June 2007 was #3.0 million compared to
#434,000 in the quarter ended 30 June 2006.
Reconciliation of trading profit to operating profit
Quarter ended Quarter ended
30 June 30 June
2007 2006
#'000 #'000
Gross profit 14,889 3,323
Operating expenses (excluding non-trading expenses*):
Sales and marketing (9,214) (1,782)
Technology and development (1,596) (470)
General and administrative (647) (424)
Total operating expenses (excluding non-trading expenses*) (11,457) (2,676)
Trading profit 3,432 647
Other operating income 361 -
Share based compensation charges (196) (132)
Taxes on share options (144) (81)
Amortisation of intangibles arising on acquisition (478) -
Operating profit 2,975 434
* Non-trading expenses are those items that do not arise from the underlying performance of the Group and
are itemised separately to provide a better measure of trading performance.
Interest
Net interest receivable of #156,000, primarily interest on bank deposits, was
recorded in the quarter ended 30 June 2007 compared to #8,000 in the quarter
ended 30 June 2006.
Tax
During the quarter ended 30 June 2007 the Group recorded a tax charge of
#960,000 primarily related to tax on profits in Poland. The tax charge in the
quarter was approximately #75,000 more than would be expected normally due to
restructuring of the Eastern European assets and entities acquired last year.
There is likely to be a further one-time tax charge in the next quarter as we
complete this restructuring, after which we expect the effective tax rate to
reduce. In the quarter ended 30 June 2006, the Group recorded a tax charge of
#62,000 relating to the release of a deferred tax asset.
Minority interest
Profit attributable to minority interests was #4,000 during the quarter ended 30
June 2007, compared to #22,000 in the quarter ended 30 June 2006.
Profit attributable to equity shareholders
Profit attributable to equity shareholders for the quarter ended 30 June 2007
was #2.2 million compared to #358,000 in the quarter ended 30 June 2006.
Profit per ordinary share
Following the 20-for-1 share split, which took effect on 18 December 2006,
profit per ordinary share has been restated for comparative periods. Profit per
ordinary share has been calculated in accordance with IAS 33. The Group's basic
and diluted profit per ordinary share for the quarter ended 30 June 2007 were
5.1p and 4.2p respectively, compared to 1.0p and 0.9p respectively for the
quarter ended 30 June 2006.
Acquisitions
ricardo.de AG
During the quarter the Group acquired 110,447 shares in ricardo.de AG at a cost
of #993,000, resulting in an increase in goodwill for the Group of #974,000. As
a result, the Group's shareholding in ricardo.de AG increased by 1.33%. As at
the close of business on 17 July 2007, the Group owned 7,842,128 shares in
ricardo.de AG and has received acceptances under the offer in respect of a
further 153,959 shares representing combined a total of 96.1% of the issued
share capital of ricardo.de AG.
Cash flow and balance sheet
The Group's cash position improved by #6.6 million during the quarter ended 30
June 2007.
Major non-operating cash inflow movements were:
* #361,000 cash inflow related to deferred consideration from the sale of
a non-trading Swedish subsidiary in 2005;
* #1.36 million raised through the issue of shares following the exercise
of employee share options; and
* #4.0 million of cash received by the Group following the exercise of
employee share options. This amount will be paid out in July 2007 to the
individuals concerned and to settle taxes and gains related to this option
exercise.
The major non-operating cash outflow movement was:
* #993,000 cash outflow relating to the purchase of shares in ricardo.de AG;
Financing and treasury
The Group's cash position at 30 June 2007 was #25.4 million compared to #3.2
million a year earlier. The bulk of the Group's cash balances are held in
Sterling, Euro, Swiss Franc and Polish Zloty denominated floating rate deposits.
Issue of shares
In accordance with the terms of the Polish settlement agreement (dated 29 June
2006) 1,831,099 ordinary shares of 5p each in the Company were issued to Wouwer
Investeringen B.V. and Tomasz Dudziak on 28 June 2007. These shares represent a
proportion of the Retained Shares and Deferred Settlement Shares (as defined in
the Polish settlement agreement) and rank pari passu in all respects with the
existing issued ordinary shares of the Company. A further 4,026,780 ordinary
shares may be issued by the Company on various dates up to July 2009 in
accordance with the terms of the Polish settlement agreement.
Placing of shares
On 15 June 2007 there was a secondary placing of 7.25 million of the Company's
ordinary shares, representing in aggregate 17% per cent. of the issued share
capital of the Company (at the date of the placing) at a price of 1030p per
share.
The sellers of the ordinary shares were Beleggingsmaatschappij Florissant NV,
individuals and companies represented by the Izaki group of shareholders
(together the "Selling Shareholders") and various option holders. Following this
placing, the Selling Shareholders continue to own in aggregate approximately
14.5 million ordinary shares in QXL ricardo, representing approximately 31% of
the issued share capital of the Company. The Selling Shareholders have consented
to a lock-up of 120 days with respect to their residual holdings and the placing
was intended to allow the Selling Shareholders to diversify their investment
portfolios and increase the free float and trading in the Company's shares.
QXL ricardo plc - First Quarter results
Consolidated income statement
Quarter Quarter Year
ended ended ended
30 June 30 June 31 March
2007 2006 2007
Unaudited Unaudited Audited
#000's #000's #000's
Revenue 15,173 3,384 36,429
Cost of sales (284) (61) (623)
Gross profit 14,889 3,323 35,806
Other operating income 361 - 1,110
Sales and marketing expenses (9,790) (1,879) (19,924)
Technology and devt expenses (1,738) (521) (4,282)
Administrative expenses (747) (489) (3,180)
Operating profit 2,975 434 9,530
Net interest receivable 156 8 221
Profit before taxation 3,131 442 9,751
Taxation (960) (62) (2,888)
Profit for the period 2,171 380 6,863
Profit attributable to minority interests 4 22 52
Profit attributable to equity shareholders for the 2,167 358 6,811
period
2,171 380 6,863
Profit per equity share (basic & diluted)
Weighted average number of ordinary shares outstanding 42,866,123 35,343,460 39,497,870
Net profit per share (basic) - pence 5.1 1.0 17.2
Weighted average number of ordinary shares (diluted) 51,650,661 39,271,580 46,526,069
Net profit per share (diluted) - pence 4.2 0.9 14.6
Operating expenses above can be analysed as:
Sales & marketing (before non-trading expenses) (9,214) (1,782) (18,267)
Sales & marketing share-based payments (71) (55) (231)
Sales & marketing taxes on share options (27) (42) (108)
Costs relating to business closures - - (125)
Amortisation of intangible fixed assets (478) - (1,192)
Total sales & marketing expenses (9,790) (1,879) (19,924)
Technology & development (before non-trading expenses) (1,596) (470) (4,029)
Technology & development share-based payments (25) (12) (53)
Technology & development taxes on share options (117) (39) (201)
Total technology expenses (1,738) (521) (4,282)
Administrative expenses (before non-trading expenses) (647) (424) (1,860)
Administrative share-based payments (100) (65) (638)
Administrative taxes on share options - - (31)
Restructuring costs - - (651)
Total administrative expenses (747) (489) (3,180)
Consolidated balance sheet
Quarter ended Quarter ended Year
ended
30 June 30 June 31 March
2007 2006 2007
Unaudited Unaudited Audited
#000's #000's #000's
Assets
Non-current assets:
Intangible assets 42,334 312 41,275
Property, plant and equipment 2,766 514 2,826
Financial assets 116 3 110
Deferred tax assets 267 - 717
Trade and other receivables 16 15 14
45,499 844 44,942
Current assets:
Inventories 2 - 3
Deferred tax assets - 66 -
Trade and other receivables 6,706 4,008 6,139
Cash and cash equivalents 25,375 3,174 18,766
32,083 7,248 24,908
Total assets 77,582 8,092 69,850
Liabilities
Current liabilities:
Deferred tax liability (197) - -
Current tax liability (2,426) - (2,979)
Borrowings - - (54)
Trade and other payables (10,533) (4,487) (6,145)
Provisions for liabilities and charges (588) - (506)
(13,744) (4,487) (9,684)
Non-current liabilities:
Borrowings (329) (210) (268)
Other non-current liabilities - (152) -
(329) (362) (268)
Total liabilities (14,073) (4,849) (9,952)
Net assets 63,509 3,243 59,898
Capital and reserves
Ordinary shares 2,271 1,767 2,134
Share premium 9,994 240,648 896
Other reserves 65,073 9,137 74,366
Retained (deficit) (13,938) (248,392) (17,619)
Shareholders' equity 63,400 3,160 59,777
Equity minority interests 109 83 121
Total equity 63,509 3,243 59,898
Statement of changes in shareholders' equity
Share Share Unissued Special Merger Retained Shareholders'
capital premium share reserve reserve earnings/ equity
capital (deficit)
Group #'000 #'000 #'000 #'000 #'000 #'000 #'000
At 1 April 2006 1,767 240,648 - - 9,137 (248,867) 2,685
Share options:
Value of employee - - - - - 132 132
services
Profit for the - - - - - 358 358
period
Exchange - - - - - (15) (15)
adjustments
At 30 June 2006 1,767 240,648 - - 9,137 (248,392) 3,160
At 1 April 2007 2,134 896 25,192 40,037 9,137 (17,619) 59,777
Deferred 91 7,784 (7,875) - - - -
consideration for
acquisitions
Share options:
Proceeds from 46 1,314 - (1,419) - 1,419 1,360
shares issued
Value of employee - - - - - 196 196
services
Profit for the - - - - - 2,167 2,167
period
Exchange - - - - - (99) (99)
adjustments
At 30 June 2007 2,271 9,994 17,317 38,618 9,137 (13,937) 63,400
2007 2006
Group #'000 #'000 #'000 #'000
Shareholders' equity at 30 June 63,400 3,160
Minority interest at 1 April 121 68
Profit/(loss) for the period 4 (7)
Change in shareholding in ricardo.de AG (18) -
Exchange adjustments 2 22
Minority interest at 30 June 109 83
Total equity at 30 June 63,509 3,243
Consolidated cash flow statement
Quarter ended Quarter ended Year
30 June 30 June ended
31 March
2007 2006 2007
Unaudited Unaudited Audited
# 000's # 000's # 000's
Cash flows from operating activities
Cash generated from operations 3,209 764 10,183
Interest received 159 11 243
Interest (paid) (3) - (8)
Tax (paid) (923) - (552)
Cash inflow from operating activities 2,443 775 9,866
Cash flows from/(used in) investing activities
Consideration (paid) for acquisitions (993) (628) (3,319)
Cash acquired with acquisitions - - 8,549
Disposal of subsidiaries 361 - 93
Part repayment of intercompany loan - - 1,054
Proceeds from sale of intangible fixed assets - - 19
Proceeds from sale of plant, property and equipment - - 6
(Purchase) of intangible fixed assets (457) (235) (54)
(Purchase) of plant, property and equipment (301) - (1,463)
Cash (outflow)/inflow from investing activities (1,389) (863) 4,885
Cash flows from financing activities
Net proceeds from issue of ordinary share capital 1,360 - 580
Short-term borrowings 4,018 - 94
Cash inflow from financing activities 5,378 - 674
Effect of exchange rate fluctuations on cash held 178 (6) 72
Net increase/(decrease) in cash and cash equivalents 6,609 (94) 15,497
Cash and cash equivalents at 1 April 18,766 3,269 3,269
Cash at end of period 25,375 3,174 18,766
Notes
1. Basis of preparation
The financial statements have been prepared in accordance with EU Endorsed
International Financial Reporting Standards ("IFRS") and the Companies Act 1985
applicable to companies reporting under IFRS. The Group has adopted all of the
standards and interpretations issued by the International Accounting Standards
Board and the International Financial Reporting Interpretations Committee that
are relevant to its operations. This condensed interim financial information for
the half quarter ended 30 June 2007 has been prepared in accordance with IAS 34,
'Interim financial reporting'. The interim condensed financial report should be
read in conjunction with the annual financial statements for the year ended 31
March 2007.
The financial information contained in this announcement does not constitute
statutory accounts within the meaning of section 240 of the Companies Act 1985.
The Group's auditors have made a report on the statutory accounts of the Group
in respect of the financial year ended 31 March 2007, which was unqualified and
did not contain a statement under section 237(2) or section 237(3) of that Act.
Statutory accounts for the year ended 31 March 2007 will be delivered to the
Registrar of Companies now that they have been approved by shareholders at the
Group's AGM which took place on 4 July 2007.
2. Accounting policies
The accounting policies adopted are consistent with those of the annual
financial statements for the year ended 31 March 2007, as described in the
annual financial statements for the year ended 31 March 2007.
3. Segment Information
Eastern Western Head Office Total
Europe Europe Operations
#000's #000's #000's #000's
Quarter ended 30 June 2007
Revenue 11,551 3,622 - 15,173
Operating profit 4,093 (732) (386) 2,975
Quarter ended 30 June 2006
Revenue - 3,384 - 3,384
Operating profit - 408 26 434
4. Purchase of non-current assets
During the quarter, the Group spent a total of #1,751,000 on the purchase of
non-current assets, comprising:
* #301,000 on computer hardware
* #303,000 on computer software
* #153,000 on other intangible assets
* #993,000 on shares in ricardo.de AG
5. Related party transactions
In accordance with the terms of the Polish settlement agreement (dated 29 June
2006) 1,831,099 ordinary shares of 5p each in the Company were issued to Wouwer
Investeringen B.V. and Tomasz Dudziak on 28 June 2007. These shares represent a
proportion of the Retained Shares and Deferred Settlement Shares (as defined in
the Polish settlement agreement) and rank pari passu in all respects with the
existing issued ordinary shares of the Company.
As at 30 June 2007 a total of #108,000 remained owing to Group companies from
certain directors of the Group's Polish subsidiaries, which were outstanding at
acquisition.
6. Events occurring after the balance sheet date
On 18 July 2007, the Company signed a conditional arrangement to acquire a 30%
stake in Molotok.ru, the leading online auction site in Russia. Further details
are set out in the operating review on page 4.
Background on QXL ricardo plc
QXL ricardo is a leading provider of online consumer trading platforms in nine
European countries. The QXL platform connects buyers and sellers 24 hours a day,
seven days a week in a safe, efficient, and entertaining environment. A wide
selection of merchandise and services is available on its sites, ranging from
computer software and hardware to consumer electronics and collectibles. QXL is
a publicly traded company with its shares listed on the Official List of the
London Stock Exchange.
QXL's principal websites are:
Czech Republic www.aukro.cz Poland www.allegro.pl
Russia www.aukro.ru www.ototmoto.pl
Denmark www.qxl.dk www.otodom.pl
Norway www.qxl.no www.ceneo.pl
www.payu.pl
www.paygsm.pl
www.platnosci.pl
www.istore.pl
Hungary www.teszvesz.hu Switzerland www.ricardo.ch
Ukraine www.aukro.com.ua UK www.qxl.co.uk
Forward-looking statements
This document may contain forward-looking statements that relate to the Group's
plans, objectives, estimates and goals. The Group's business is subject to
numerous risks and uncertainties, including risks associated with: technology,
litigation, growth of the online commerce market, and competition. These and
other risks and uncertainties could cause the Group's actual results and
developments to be materially different from those expressed or implied by any
of these forward-looking statements.
Copies of this document are available from the Group's registered office - The
Matrix Complex, 91 Peterborough Road, London SW6 3BU and will be available on
QXL's website, www.qxl.com.
This information is provided by RNS
The company news service from the London Stock Exchange
END
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