Aimia is almost over Aeroplan ;Moves on to new Investments

 

 Aimia is a Canadian company with loyalty solutions;it is not tremenduously popular and has a market cap of only $425 million.But Workathon has been interested in it for some time when it suffered embarrassment after it sold it's chief asset,the very popular Aeroplan loyalty program, for little proceeds.This was an embarrassment but now Aimia is almost over this fiasco and is starting to move on.Consequently in the last quarter it collected $66 million from one account and $3.5 million for another.And Aimia is using the proceeds to invest in new companies that are providing it with income.

      Third Quarter Highlights 

   Aimia made several new initiatives in Q3.It had already acquired Mittleman Investment Management in Q2 with assets under management (AUM) of $201 million.And in Q3 it invested $9.2 million in an Australian entertainment company called Village Roadshow.And it also invested $10.5 million in a leader in outdoor advertising called J.C.Decaux.But,of course, the big item will be the receipt of about $70 million from their Aeroplan program.Aimia also tells shareholders that it's 49% owned loyalty program called Kognitiv will have a positive adjusted EBITDA and cashflow in 2021.However Q3 will show a net loss of $.15 per share in comparison to $.11 per share income in 2020. 

    Aimia needs more Loyalty

    This is a bit of a pun because Aimia needs more loyalty from it's shareholders which will then bid the share price up.But taken in another sense this blog believes that Aimia should stick to it's core business of loyalty programs like PLM.There is almost $70 million coming in as retribution for Aeroplan in this quarter but is this enough?Aeroplan is still the biggest loyalty program in Canada by far.And it took 17 years for Aimia to build Aeroplan to it's present successful state.Basically Aimia got $450 million plus all liabilities covered with a few sweeteners for a $2.5 billion loyalty program.And that is why the old board members are no longer with Aimia.          

     Right now this blog feels that the new board lacks focus in it's new investments.Although Kognitiv shows promise this blog thinks that almost all of the $70 million coming should be spent on loyalty programs.For example,why not buy Avion or a good chunk of it from Royal Bank.If Aimia is still short of a majority position surely Air Canada (the new Aeroplan owner) will throw in another sweetener to a very sour deal.

                          https://www.aimia.com/

Blackline Safety Posts Record Year

     Blackline Safety (BLN) had a record year in 2020 - a year not great for business because of the pandemic.But annual revenue,at $38 million, was 15% better than 2019 and Q4 revenues were up 31% to $7 million.But BLN was more proud of it's recurring revenues which at $25 million were ahead 42% from 2019.BLN was proud because they recorded these gains in the year of the pandemic.And there were fewer products shipped because of the pandemic.Fourth quarter revenues were especially strong with a 31% increase to $12 million.

     Annual Highlights  

    BLN had a moderate growth year in 2020 with revenues increasing by 15%.And their gross margin showed some improvement because of BLN's better market share.As a result BLN showed significant improvement in adjusted EBITDA from $.5 million in 2019 to $5.5 million in 2020.But still does not record any net income as they showed a small net loss in 2020.BLN expects revenues to grow only to $35-40 million in 2021.But using the fourth quarter as a benchmark this blog thinks that annual revenues should be $45-$50 million.And this increase might improve their margin by another 1%.Blackline must increase adjusted EBITDA and show a small net income in 2021.         

 

     If Blackline cannot improve it's overall market share then it must make one or two small tuck-in acquisitions.Revenues must be increased to cover overhead costs and earn a net income in 2021. It could be said that 2021 is close to or is a breakeven year.It is time to show earnings and e.p.s. for it's shareholders and new investors.

     It is true that BLN had a record year but it's guidance at $35-$40 million will not increase EBITDA and net income sufficiently.It is time to make some nimble moves to increase revenues.Guidance should be in the $45-$50 million area.And this will take at least one accretive acquisition.If this is done then it's shareholders can expect the share price to move gradually towards $9.50-$10.00.      https://www.zacks.com/   https://www.moneysense.ca/ 

 
 

Tucows reports 4th Quarter Results on February 9

     Yes the CEO,Elliott Noss, is working on the fourth quarter report in order to be ready for the February 9 publication.Both Tucows and it's CEO have been the subject of several blogs on Workathon,Blogdaleupsome on the Blogger website  and Econothon on the Wordpress website.The message has been to stop total reliance on registering and cataloguing internet domaine names for their earnings.And also to make more than one acquisition in a separate but closely related field.As Tucows has relatively few shares outstanding and little debt (recorded on it's balance sheet).Still this blog is aware that Noss has hired two top talented staff to work for it's subsidiary called Ting,a mobile internet service.So what can Elliott Noss tell shareholders in it's fourth quarter and 2020 annual report?

       Domaine Names

   Mr. Noss has not completely ignored the messages given on Workathon dated July1,2020 and Blogdaleupsome on November14,2020.The message is the same as the one given several times in 2019.Whether because of this advice or for other reasons Tucows started to sell off domaine names in Q2 of 2019.This bloated earnings and cash flow but reduced revenues.It also appears that some of their high salaried board members($500,000/yr.) have been dropped which, if true,has created significant savings.So revenues have been reduced but expenses have been pared down.Although e.p.s. has remained substantial their P/E ratio moved from 20 to 50.            

         But the Share Price is just Fine

    So e.p.s. remains substantial but the P/E ratio has increased.This is because the share price has fallen only slightly from it's high reached in 2019.Investors remain confident that Elliott Noss will produce new earnings.And,in fact, the share price has not suffered tremenduously.It has drooped, down to the $85 area, but then bounced back up in the $100 area where it now remains.This blog feels the secret is connected to the arrangement made for it's small mobile internet company called Ting in southern U.S.A. with the DISH network.It has even taken on new staff to manage Ting.Tucows has told shareholders that it has little equity left in Ting.But Noss has been silent on his position and the equity in the high-flying DISH stock.Although no new shares have been raised to buy DISH stock Tucows may have an option to buy at an earlier,cheaper share price.Right now many shareholders are hoping that is true but we should know more on February9.  www.woodbridge.com   ;www.canadianmoneysense.ca