DATING website entrepreneur Bill Dobbie – who has snapped up a string of smaller rivals to grow his Cupid business since floating in 2010 – hinted on Thursday that he may have his sights on a much bigger deal.
Current strong trading at the Edinburgh-based company means turnover and profit growth were now performing at least a year ahead of plan when it floated in 2010.
In a market update, ahead of full-year results, Dobbie said the latest additions to Aim-quoted Cupid’s portfolio of websites, including Uniform Dating, were trading well.
With the company debt-free and with more than £11m of cash expected at the year end, the company has plenty of firepower to make further acquisitions.
Dobbie stressed the board was trying to find the right balance between its dividend policy and the type of acquisition that can make a “big difference”.
While Dobbie said acquisitions to date had mainly been of a “tactical” nature, he said there may be “some bigger jumps” in terms of scale in the future.
Although there were no active discussions of acquisitions under way, he said there was “plenty of investigation” of potential opportunities being carried out.
As well as investing in its core dating sites, Cupid is also looking at using its existing technology platform to move into new areas including so-called social discovery sites which provide opportunities for people to meet based on shared interests.
The trading update said Cupid was continuing to perform strongly with revenue and profits again substantially ahead of last year.
“We will end 2012 in a very strong position and we look forward to 2013 and beyond with confidence,” said Dobbie.
Dobbie said the company, which employs around 25 staff in Edinburgh, had recently moved to larger premises in the city centre which gave it the capacity to double its workforce over time.
Paul Morland, an analyst at Peel Hunt which has a buy rating on the shares, said the “track record and high growth rate” of Cupid deserved a much higher rating.
Ivor Jones at Numis, which has a target price of 350p on the shares, said Cupid’s share price was climbing a classic “wall of worry” as investor concerns over sustainability of the business model are gradually reduced by continued growth and successful execution of acquisitions.
“We believe that the business is very well positioned for further strong growth,” he added.
Shares in the company, which have fallen back in recent months after hitting a high of more than 220p, rose 10p to close at 187p.
The stock had attracted attention earlier this week amid market speculation – dismissed by Dobbie – that US dating giant
InterActiveCorp may be running the rule over Cupid.