Loyalty program company Aimia to cut jobs as it charts post-Aeroplan course
Aimia chairman of the board Robert Brown is pictured prior to a special shareholders meeting Montreal on January 8, 2019. THE CANADIAN PRESS/Paul Chiasson
The Associated Press
Published Thursday, March 28, 2019 8:12AM EDT
Last Updated Thursday, March 28, 2019 12:16PM EDT
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 Air Canada.
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.
Chief executive Jeremy Rabe said the focus on wrapping the Aeroplan sale has prevented an extensive search for potential bolt-ons until recently.
"There's just hundreds and hundreds of small-ish loyalty solutions companies out there...and a lot of them are founder-led and have grown to a certain size but can't scale too much beyond that," Rabe said in an interview with The Canadian Press.
"These guys or gals have been doing it for 20 or 30 years and are ready to monetize part of their investment."
North America is "likely to be a market where we spend a lot of time" hunting for loyalty analytics companies, he said.
The company is on track to become profitable by 2020, he said.
The past two years have been turbulent for the Montreal-based company. Rupert Duchesne, Aimia's previous CEO, stepped away from the job in January 2017, replaced by Jeremy Rabe in May 2018. Former president and chief strategy officer Nathaniel Felsher left in November less than three months after he took the job.
Aimia's global reach has sometimes come at a cost. In February 2018, 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," McReynolds said in a research note to investors.
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.
Aimia chief financial officer Mark Grafton will also leave the company in May, to be replaced by Steven Leonard, who has been with the company since 2010.
The company reported a loss of $126.2 million for the quarter ended Dec. 31 compared with a loss of $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.
On a per share basis, Aimia says its loss from continuing operations amounted to 98 cents compared a loss from continuing operations of 50 cents per share a year ago. Aimia's adjusted net loss from continuing operations was 51 cents per share compared with 52 cents per share a year ago.
Aimia completed the sale of the Aeroplan loyalty program to Air Canada on Jan. 10.
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.