Profits up as Cupid spreads its wings

Despite the Aim-quoted company pumping more money into marketing efforts in the European countries, chief executive Bill Dobbie is expected to tell investors that profits have risen to £10.2 million in 2011 from £5.4m in 2010, on the back of a doubling in sales to £53m.

The Edinburgh company – whose brands include Be Naughty, Loopy Love and Mature Dating – has more than 34 million members in 39 countries, up from 23 million users just a year ago.

“Cupid has already proven that it only spends on marketing where it can get meaningful returns,” said analysts at house broker Peel Hunt.

Although the higher marketing spend will have eaten into margins, Peel Hunt was upbeat on the outlook for the year ahead.

“The lower margins in 2011 will leave plenty of scope for them to rise as the newer geographies move into meaningful profitability during 2012,” analysts said.

Ivor Jones, an analyst at Numis, added: “Cupid has been very aggressive in rolling out its successful commercial formula to multiple geographic markets and exploiting new distribution channels, like Facebook and mobile phones.

“We believe the prelims on 6 March may provide the stimulus to push the shares further.”

Dobbie founded Cupid, then called EasyDate, with Ukrainian doctor Max Polyakov in 2005 and floated it on Aim in 2010. They changed its name to Cupid after a tussle with EasyGroup founder Sir Stelios Haji-Ioannou.