24th Sep 2013 07:42
LONDON (Alliance News) - Cupid PLC, the online dating services provider, Tuesday swung to a loss in the first half of the year, hit by higher marketing and administrative costs, despite a 12% rise in revenues.
The company said it expects its continuing business to return to profitability in 2014, following the recent sale of its casual dating businesses, including BeNaughty.com and Flirt.com, and causal assets for a total of GBP45.1 million, which it said will further strengthen its balance sheet and improve its second half results.
Cupid said that its 2013 dividend is expected to be maintained at the 2012 level.
It reported a 12% rise in first half revenues, to GBP43.4 million, compared with GBP38.6 million a year earlier. It said that revenues from established markets like the UK, Australia and South Africa, were up 12% in the first six months of the year, and up 9% in its new markets such as the US, Canada and France.
However, the online dating services group reported a drop in its first half gross profit margin to 17%, from 22% a year earlier, and a pretax loss of GBP2.8 million, compared to a pretax profit of GBP3.7 million a year earlier. It said that the first half loss was due to an 18% increase in its marketing spend to GBP27.4 million, and a 60% increase in administrative expenses to GBP4 million.
"We have had a number of distractions in the first half of 2013, however, we have commenced a streamlining and refocusing of the business, which will provide us with an excellent opportunity going forward to take more of the opportunities the sector has to offer," said Chief Executive Officer, Bill Dobbie, in a statement.
The company said that it is now reinvesting in developing its portfolio of brands, and that upon returning to profitability in 2014, it will investigate more growth opportunities in its dating business and related online activities.
Cupid shares were down 6.92% or 4.50 pence Tuesday morning, trading at 60.50 pence per share.
By Rowena Harris-Doughty; [email protected]; @rharrisdoughty
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