There has been plenty to distract the management of online dating company Cupid (CUP) recently. Allegations of wrongdoing led to an independent review into the company's practices - management now hopes to draw a line under this issue after the review's report in July revealed that the allegations were unfounded. The board has also been busy with the sale of the casual dating assets, which include websites such as flirt.com, for £45m, in a deal that completed in July.
That leaves Cupid focused on the more mainstream, and shareholder-friendly, sites of Cupid.com, uniform dating, mature dating and a handful of other niche dating sites. The company is keen to give the reshaped business a fresh start, but that has come at a cost. The company slipped into a loss at the first-half stage as hefty increases in marketing, other direct costs, and administrative expenses weighed.
Chief executive Bill Dobbie says this investment will position Cupid's remaining brands for the next growth phase with brand relaunches and new advertising campaigns coming up in the second half. He promises a return to profitability in 2014, but there is some lack of visibility on the numbers near term, with the company's broker Peel Hunt putting earnings forecasts under review until the impact of the changes under way in the business become clearer.
CUPID (CUP) | ||||
|---|---|---|---|---|
| ORD PRICE: | 60p | MARKET VALUE: | £42.6m | |
| TOUCH: | 59-61p | 12-MONTH HIGH: | 210p | LOW: 38p |
| DIVIDEND YIELD: | 5.0% | PE RATIO: | 22 | |
| NET ASSET VALUE: | 39p* | NET CASH: | £12.7m | |
| Half-year to 30 Jun | Turnover (£m) | Pre-tax profit (£m) | Earnings per share (p) | Dividend per share (p) |
|---|---|---|---|---|
| 2012 | 38.6 | 3.65 | 3.57 | nil |
| 2013 | 43.4 | -2.77 | -2.55 | nil |
| % change | +12 | - | - | - |
Ex-div: - Payment: - *Includes intangible assets of £6.7m, or 9p a share | ||||
