Ex-dating site reports loss – and bright future

The former owner of the Cupid, UniformDating and LoveBeginsAt websites has reported a £11.6m pre-tax loss.

Castle Street Investments (CSI), the Edinburgh-based AIM-listed company said: “The 2014 financial performance of the business reflects the impact of the disposal in 2013, the challenging year in general and the consequences of restructuring the mainstream core dating assets.”

Revenues from discontinued operations dropped to £12.5m in 2014; down from £56m in 2013 when the profitable casual dating sites were sold to a Cupid co-founder.

Despite the losses, shares in CSI, which changed its named from Cupid Plc last December, rose more than 15% on news that the potential distributable reserve to shareholders is “£2m better than expected”, at £19m.

Distribution is dependent upon a successful court application to cancel reserves, which is expected to be heard by the end of April. If successful, the decision could could prompt the company de-list from AIM.

In its statement, CSI noted a £6.2m reduction in the gain previously attributed to its sale of its profitable casual dating businesses –  including BeNaughty, Flirt, CheekyLovers, WildBuddies, Click&Flirt and QuickFlirt – to Grendall Investments in July 2013 in a £45.1m deal.

Cupid Plc stated at the time its casual dating sites were an “inappropriate direction” for a listed company and sold them to Grendall, a British Virgin Islands-based investment company set up by Cupid co-founder, Maxym Polyakov.

CSI, which has repositioned itself as an investment company, expects the net cash balance in December 2015 will be “approximately £20m, £2m better than the previous forecast” as a result of closure costs and other provisions being £1m lower than expected.

Bill Dobbie, CSI chairman, said: “As stated in our December 2014 circular, the company has now transitioned from an online dating company into a well capitalised investment vehicle.

“We are beginning to review selective opportunities that meet our investment criteria, and are considering a combination of cash returns and finding an attractive investment opportunity to propose to shareholders.”

Last November, Dobbie launched a crowdfunding business called Lending Crowd, which offers investors the chance to lend to UK businesses, along with former Cenkos Securities analyst Stuart Lunn, who was involved in Cupid’s 2010 AIM listing.

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