Cupid, the Edinburgh-based online dating business, has introduced "clearer guidelines for staff interaction with customers" following allegations three months ago that sparked a 57% crash in the share price.

It follows an internal legal review, implemented ahead of the findings of an independent review into the company's business practices, to be released within days.

Ahead of its annual meeting in the capital yesterday, the AIM-listed group said it was still exploring with bidders a sale of its casual dating websites, and confirmed it anticipated first half net earnings to fall from £5.9 million a year ago to £2.5m.

Cupid shares began the year at 197p, but more than halved to 49p on March 22 following the claims in a BBC film that customers were lured into subscribing after receiving messages from users who later disappeared.

Joining the websites is free, but subscription kicks in when users reply to a message, and the allegations were that Cupid staff were involved.

The group strongly denied the allegations in a statement issued on March 25.

One shareholder John McFarlane asked why on the day of the 'black Friday' crash in the share price, the board had been "very slow to react".

Chairman George Elliott said due consideration had been needed, adding: "Unfortunately we have to move slower than the people out there making comments."

Mr Elliott said the independent review of its member database and operating practices, instigated by the board and undertaken by a major accountancy firm, was due to be completed next week.

His statement went on: "The group has also undertaken a further, separate review by a leading legal team. A number of recommendations have been implemented as a result, including clearer guidelines for customer service staff interactions with customers and clearer identification of Cupid staff when online with customers."

Bill Dobbie, chief executive, commented after the meeting: "There are lots of people posing as other people online and taking on virtual identities. Many online businesses are wrestling with this and it is a major contributor to these issues."

In the March statement the directors said there had been much "misrepresentation and ill-informed speculation in the marketplace and the company is currently taking legal advice on these matters".

Mr Dobbie said the legal advice referred to internal procedures, not to taking action against the misrepresentation or speculation.

He said the main impact of the upheaval was "investor issues, people trying to get confidence in the business, which is something we are addressing".

On the discussions for disposal of the casual dating websites and, Mr Dobbie said: "We have two different types of businesses and we are a young but fast-growing business."

He said the group had focused its acquisition and brand investment on fast-growing niche dating sites such as and and mainstream sites such as and

A disposal would enable it to develop these sites further alongside social media driven sites, and, which would be launched later in the year.

Mr Elliott said Cupid continued to innovate, launching services such as 'safe mode', a function which allows the user to choose with whom they interact.

He said marketing spend was weighted to the first half of the year and should yield benefits in the second half.

"We continue to focus on devising and implementing a number of initiatives aimed at improving the customer experience and the quality of traffic.

"Whilst the changes have a short term financial impact, the company is confident that the strategy will increase lifetime value of customers and reduce churn rates in the medium term."

The chairman said Cupid had "received a number of recent approaches for the casual dating assets and is currently exploring the proposed opportunities with these third parties".

The group would have banked all the £2.2m due from related parties by the end of the month, with over £10m in cash. The shares eased 1p to 68p.