21 June 2013 – AGM statement
A trading update has revealed that revenues in the first half are expected to be marginally below previous guidance but EBITDA of £2.5m should still be delivered and cash will be in excess of £10m as at the end of June. The result of the independent review which has been undertaken will be released by 1 July at the latest and this should provide more detail on any questionable practices which have been used in the past. Moving forwards Cupid will be keen to ensure that its image is improved and although this may result in lower profits, particularly in the near term, it should ensure that there is less risk to the value which is being created.
Approaches for the company’s Casual Dating businesses are being explored and any sale or deal to divest these assets may increase demand for Cupid shares from institutional investors. With the impending news of the independent review the shares may be volatile over the next week or so, as they have been in recent months. However, over the longer term there is scope for significant capital growth from the current level. We rate the shares as a HOLD with a view to upgrading if news from the independent review is reassuring.