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AIMIA INC (OTCMKTS:GAPFF) Eyes Strategic Alliance To Accelerate Growth

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AIMIA INC (OTCMKTS:GAPFF)

Shares of AIMIA INC (OTCMKTS:GAPFF) gained 15.41% after the data-driven and loyalty analytics company reported third quarter financial results. The company delivered solid performance in the quarter, helped by good execution of coalition programs and new partnerships.

AIMIA INC (OTCMKTS:GAPFF)

The better than expected financial results have helped strengthen investors’ confidence in the company. The stock is currently trading at a key support level of $2.58 a share as it tries to bounce back from all-time lows. However, it is down by more than 60% for the year. The stock faces immediate resistance at the $2.80 level.

AIMIA Q3 Financial results

For the three months ended September 30, 2017, AIMIA INC (OTCMKTS:GAPFF) generated gross billings of $496.8 million down 10% on a constant currency basis. Total revenue came in at $462.1 million down from $503.6 million reported last year. Net loss in the quarter totaled (-$40.3) million – an increase from a net loss of (-$41.5) million reported last year.

For the 12 months, ended September 30, 2017, return on invested capital was 6.1%, compared to 5.2% for the 12 months ended September 30, 2016.

In a bid to enhance operational efficiency and reduce net loss, AIMIA INC (OTCMKTS:GAPFF) has embarked on a two-division structure that is expected to result in a significant reduction in divisional and corporate costs. The strategy has already resulted in the reduction of the total headcount by 10%, leading to initial savings of around $9 million.

Strategic Alliance

The sale of the Canadian Air Miles trademarks in the quarter resulted in the strengthening of Aimia Balance sheet. Proceeds of $53.8 million from the sale contributed to an increase in cash and cash equivalents to $374.8 million.

“We’re much focused on securing long-term strategic and commercial partnerships that will provide even better experiences in the future and are making good progress on strengthening the balance sheet and executing on our cost reduction plans,” said CEO, David Johnston.

AIMIA INC (OTCMKTS:GAPFF) is currently in discussions about the possibility of securing long-term strategic and commercial partnerships for the Aeroplan business

For the year ending December 31, 2017, AIMIA INC (OTCMKTS:GAPFF) expects gross billings of between $2 and $2.1 billion compared to the previous guidance of $2.1 billion. Adjusted EBITDA margin in the core business should be around 13%. Free cash flows before dividends are paid should total $220 million.

I have no positions in any of the stocks mentioned, and have no plans to initiate any positions within the next 72 hours. All information, including any data, is provided without any guarantees of accuracy.

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