Virtual dating service provider TargetMatch published handsome financial statements this morning, despite the growing liquidity problems of dot.com companies around the world, and especially in Israel. TargetMatch not only avoids burning up its cash, but has also posted a profit for the second consecutive quarter since its issue on the Tel Aviv Stock Exchange (TASE) (participants in that issue have lost 30% on their investment).
TargetMatch, controlled by Dr. Anat Levy and her brother, Muly Litvak (35.8% each), operates three Internet sites, of which only Datingclub.com, a dating service, generates revenues. The other two sites offer job finding and tourism services.
The dating service enables surfers to identify potential mates whose profile is stored on the site. Nearly 70% of site visitors are North Americans. Half of the persons providing a profile are below 30, and 82% of them are male.
Since the site was set up in 1998, the number of visitors has grown rapidly to 920,000 in April this year – an average growth rate of 15% since November 1998. As of the end of Q3, the number of subscribers was 1.5 million.
TargetMatch’s Q3 revenue was NIS 5.7 million – 8.5% higher than in the previous quarter, and four times higher than in the corresponding quarter last year.
Net profit was NIS 1.6 million – double the figure for the previous quarter. Revenue for the first nine months of the year was NIS 14.7 million, up from NIS 3.3 million in the corresponding period last year. Profit was NIS 2.6 million, compared to a loss of nearly NIS 3 million for the corresponding period in 1999.
TargetMatch’s cash flow is also encouraging. The company said that it nearly broke even (a negative cash flow of NIS 2,000). Internet companies, even when posting profit on paper, usually have a negative cash flow, due to the need to invest in working capital. TargetMatch, however, is about to break even.
TargetMatch is traded at a p/e ratio of 20, and a sales multiplier of 5.4. Although the figures are relatively high, they are definitely reasonable compared to the astronomical prices at which Internet companies were traded a few months ago.
TargetMatch issued last June, at a company value of $40 million after money, raising NIS 13 million gross (NIS 10.7 million net). Although the company has improved its financial results and posted a profit, TASE investors have yet to be won over. The share price at issue was NIS 7.3, but it has since fallen to NIS 5.4, reflecting a company value of $30 million.
TargetMatch is seeking to expand its operations beyond matchmaking. It has set up Internet company GlobalArb together with a top capital market investor, who will actually manage the company. GlobalArb deals in financial arbitrage, using TargetMatch’s Internet marketing capacities and its matching platforms. The new site targets institutional and private investment managers and capital market traders.
TargetMatch CEO Anat Levy today said, “The financial statements we published reflect the real increase in activity, as well as the improvement in financial performance. Our results have met expectations in terms of revenue and profit alike.”
”Globes”: Where will you go from here?
Anat Levy:”We’ll make every possible effort to go on expanding. We’re focusing on, and bolstering, three types of activity. The first is our traditional matchmaking operations. The second consists of strategic partnerships with Internet access providers and search engines requiring a matching platform. The third involves further matching operations, such as in the financial sector, in which we’re already leveraging our platforms and technology, with the partners contributing professional know-how and investment.”
In the past, you talked about issuing abroad. Have you taken any steps towards this?
”We’ve got our plans. We definitely intend to issue abroad. The most suitable market at the moment is Europe, but we haven’t made a final decision yet. We’re not ruling out a private placement for a synergic concern to enhance the company’s overseas operations.”
Published by Israel's Business Arena on 6 November, 2000