MONTREAL – The former owner of Aeroplan will cut about one-quarter of its workforce as it charts a new course following the sale of the loyalty program to an Air Canada-led consortium.
Aimia Inc. said Thursday that it expects to reduce its workforce to about 550 employees by the end of 2019, and plans to evolve its business through a combination of organic growth from its other businesses and acquisitions.
The company’s other assets include Air Miles Middle East, a stake in the Club Premier program in Mexico that it jointly controls with Aeromexico, and an investment with Air Asia in a travel technology company that operates BIG Loyalty.
Bill McEwan, who became chairman Aimia’s board of directors on Thursday, said it has concluded there is “a tremendous opportunity available” due to a strong balance sheet, tax assets, and expertise in the loyalty and travel sectors.
McEwan, a former president and CEO of the Sobeys grocery business who has been an Aimia director since 2016, succeeds Robert Brown, who retired from the board effective Thursday.
Aimia chief financial officer Mark Grafton will leave the company in May, to be replaced by Steven Leonard, who has been with the company since 2010.
Chief executive Jeremy Rabe said it will look to evolve through a combination of organic growth and acquisitions, but said the intense focus on wrapping the Aeroplan sale has prevented an extensive search for potential bolt-ons until recently.
“Doubling down on our existing areas of expertise in loyalty solutions will be an important element of the strategy we have announced today,” Rabe said.
The company is on track to become profitable by 2020, he said.
Aimia shares have hovered between $3.15 and $4.60 since the Aeroplan deal was announced on Aug. 21 – they sat at $3.81 in mid-morning trading Thursday, less than half its stock price from before May 2017. The analytics firm has seen shares decline from a peak of around $20 in the first half of 2014 and net losses totalling more than $400 million over the past five years.
Aimia’s global reach has sometimes come at a cost. In February, the company announced it had sold Nectar, a U.K. loyalty program, to British retailer Sainsbury for $105-million, 11 years after Aimia bought it for $755-million.
Analyst Drew McReynolds of RBC Dominion Securities said the new consolidation strategy “will likely take some time to play out.”
“While this outcome of the strategic review was probably the most probable and logical, we do believe the onus is firmly on the company to demonstrate that sustained shareholder value can be created on a timely basis,” he said in a research note to investors.
The company also announced its net loss for the fourth quarter, which was prior to the sale of Aeroplan, was reduced to $126.2 million from $214.7 million a year earlier.
Revenue from its continuing operations, as of Dec. 31, was $36.8 million – down 23 per cent from $47.3 million.
That excluded the Aeroplan business, which was designated as a discontinued operation for the quarter ended Dec. 31.
Aimia said its net loss from continuing operations amounted to 98 cents per share. Adjusted net loss from continuing operations was 51 cents per share.
The company’s discontinued operations earned 12 cents per share of net income or 50 cents per share after adjustments.
Aimia completed the sale of the Aeroplan loyalty program to Air Canada on Jan. 10. About $308 million of the $497 million in proceeds were used to reduce debt and $100 million are held in a restricted cash account.News from © Canadian Press Enterprises Inc. 2019