The company continues to edge towards profitability, but it remains in the red to the tune of �18.7m, according to its latest results.

Chief executive Mark Zaleski said the group was looking at alternative financing options to shore up its dwindling reserves.

"We remain extremely focused on our cash position and are conscious that in the next few months we are dependent on a number of planned tax-related cash receipts that are outside of our direct control.

"The directors are reviewing alternative financing arrangements and the possible sale of assets to cover the risk of current assumptions not being met."

The company had cash reserves of �2.7m at the end of March.

Pretax losses narrowed to �18.7m from �39.9m a year earlier, as turnover slipped to �5.04m from �5.42m, the group said.

Mr Zaleski said he was pleased with the progress the group had made in a difficult year.

QXL shares were down 10p at 130p on news of the results.