Online auction house QXL Ricardo, operating under a new chief and with a revised strategy, has said that some national divisions will hit profitability later this year.

The firm, which has units in 12 European countries, ran up trading losses of �5.4m in the October to December quarter, half those recorded a year before.

And with operating expenses cut for the fifth successive quarter, and turnover up by 26% on the July to September period, QXL proclaimed it had built a "sold platform for future growth".

QXL sites in a "number of countries" would hit profitability later this year, the firm said.

Strategy change

The upbeat forecast follows a change of strategy which has seen QXL focus on auctioning lots for customers, rather than selling good bought itself.

QXL sites in some countries have also over the last year started charging fees to customers, a policy which, while initially hitting turnover, has raised profitability hopes, a spokeswoman told BBC News Online.

But the spokeswoman declined to detail which country operations were likely to hit profitability first.

Norwegian and Dutch sites became the latest to introduce fees.

Costs cut

Mark Zaleski, who took over as QXL chief executive in November, said the results reflected "another solid quarter for the firm" and praised "significant progress" in cutting costs.

Sales and marketing expenses were, at �3.8m, 41% lower in the October to December quarter than the same period a year before, as the firm switched to campaigns based around co-branding and e-mail.

Technology costs plummeted by almost two-thirds to �1.5m as the firm's platform integration programme approached completion.

Investors, however, remained unimpressed by QXL's statement, sending shares in the firm down 30% at 2.16p by close of trade on Tuesday.