Investors fell out of love with online dating group Cupid (CUP) after a bitter blogger attack on its business model caused its shares to plunge by over a quarter. But the group is still trading strongly - underlying cash profits jumped by 45 per cent to £16.4m, and cash generation more than tripled, improving the year-end cash position from £7.8m to £14.1m.
Expansion into new markets has set the stage for further strong growth this year, too, and chief executive Bill Dobbie unveiled plans to hit over 1m subscribers within five years, more than double the current 533,000. The acquisition of AGL and its Amour branded websites took it into France, while the Uniform Dating business bought in September is being rolled out to into the US and its more mature Australian market later in 2013. However, subscriber acquisition costs rose 8 per cent to £23.64 and the monthly percentage of cancelled subscriptions jumped 6.6 percentage points to 29.1 per cent.
Broker Numis Securities expects adjusted pre-tax profits of £18.9m this year, but downgraded EPS by 12 per cent to 17.6p to reflect an additional £2m that management plans to spend on marketing (from £15.1m and 13.9p in 2012).
CUPID (CUP) | ||||
|---|---|---|---|---|
| ORD PRICE: | 136p | MARKET VALUE: | £113m | |
| TOUCH: | 136-138p | 12-MONTH HIGH: | 226p | LOW: 124p |
| DIVIDEND YIELD: | 2.2% | PE RATIO: | 15 | |
| NET ASSET VALUE: | 41p* | NET CASH: | £14.1m | |
| Year to 31 Dec | Turnover (£m) | Pre-tax profit (£m) | Earnings per share (p) | Dividend per share (p) |
|---|---|---|---|---|
| 2008 | 4.10 | -0.12 | - | nil |
| 2009 | 8.50 | 0.98 | - | nil |
| 2010 | 25.7 | 4.16 | 4.74 | 1.32 |
| 2011 | 53.6 | 7.05 | 7.14 | 2.25 |
| 2012 | 80.9 | 9.23 | 8.89 | 3.00 |
| % change | +51 | +30 | +25 | +33 |
Ex-div: 5 Jun Payment: 2 Jul *Includes intangible assets of £26m, or 31p a share | ||||
