With ample cash to pursue acquisitive deals, Easydate intends to start serving up dividends too.
Debuting on AIM in June with a £10 million funding, specialist dating business Easydate hopes it can drive growth from its niche dating websites.
With ample cash to pursue acquisitive deals, Easydate, already profitable, hopes to attract further buying interest by shortly serving up dividends too.
Co-founded in 2005 by IT industry veteran Bill Dobbie, Easydate operates ‘niche dating’ sites including planetsappho.com, a site for lesbian, bisexual and bi-curious women looking for ‘femme’ companions for non-sexual relationships. Its other sites include maturedatinguk.com, designed for older people looking for love, as well as datingforparents.com, targeted at single parents or those content to date people with children.
Given the public’s variety of tastes and sexual preferences, Scottish CEO Dobbie says Easydate aims to cater for as wide a potential customer base as possible. For example, while benaughty.com focuses on those looking for short-term sexual relationships, datetheuk.com and girlsdateforfree are aimed at daters looking for longer-term partners. ‘We are in a very broad market’, explains Dobbie, ‘with people dating up to the age of 75. As a result, we try to provide variety.’
Dobbie says that due to the intrinsic nature of dating, Easydate’s customers often do not stay on one site for long. ‘We use the analogy of bars’, he explains. ‘We provide a variety of different bars providing a variety of different beers. If they leave a site, some people might want to visit another site and find a new set of people, just as you might try different bars on a night out.’
Regarding the niche nature of the business, Dobbie notes that while a majority of the population may not be interested in, for example, a non-sexual relationships with a ‘femme’ lesbian, globally, there are ‘hundreds of thousands of customers’ interested in such friendships. So, by catering to these numerous niches, the company is quickly developing a large ‘long tail’ of potential consumers. Significantly, Dobbie says that the market for dating among gay males is probably the most profitable, adding balefully that ‘we don’t happen to be in that niche at the moment.’
Going forwards, he argues that Easydate should be able to generate growth by increasing its proportion of international customers, which eventually, he hopes will account for 50 per cent of total sales. A further plank of the growth strategy is to develop additional sites for other niches.
Fascinatingly, Dobbie hints that future technological developments could provide new ways for customers to find desirable and suitable partners. ‘There is technology in development at the moment that would mean you could point your camera phone at someone you find attractive on the street, and a site could then search through its image database to find someone that would be a similar match to what you are after’, he explains, adding that such technology is still early stage.
Not long after joining AIM, Easydate demonstrated the profitability of its model by announcing strong interims to June. These showed pre-tax profits of £2 million generated from £8.8 million turnover. And with £6.3 million cash in the coffers, the company has the financial firepower to complete further acquisitions.
For the current year, house broker Cenkos forecasts profits of £5.1 million on £20.9 million sales, with profits of £8.5 million and £11.4 million pencilled in for 2011 and 2012 respectively. In addition, Easydate is expected to pay a maiden dividend of 0.36p this year, a welcome milestone for a company to reach so early in its AIM life.
Shares in the company have almost doubled since the group’s June floatation at an issue price of 60p and a result, they are swapping hands for a punchy looking p/e multiple of more than twenty times. However, given the growth on offer, this is a premium price worth paying and unlike its ‘casual relationship’ site benaughty.com, Easydate is a company worth building a long-term relationship with.
