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/