In a rare piece of good news for the troubled internet sector, online auction firm QXL Ricardo has announced narrowing losses, and given an upbeat assessment of its prospects.

QXL, Europe's top internet auctioneer, remains in the red, but cut its loss to �10.7m in the second quarter, from �15.5m a year earlier.

The company said it expected its "trading losses and cash burn to continue to fall on a quarterly basis".

QXL's shares rose by one-quarter of a penny to 6p in early trading on Friday.

Growth continues

QXL, which operates across 13 European countries, said its gross auction value - the total worth of goods up for auction - increased by 109% year on year, to �26.4m.

It also enjoyed a 186% increase in membership, and now claims to have 3.1 million signed up.

The firm said it had benefited from a switch to an agency-based business model, under which it takes a commission from sales.

Last year, its model required it to buy and sell the goods itself.

QXL said it ended June with �41m in cash and other funding, having burned through about �8m during the quarter.