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Jarrod Wesson
Published on
September 7, 2017
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After a horrible year, it seems that AIMIA INC COM NPV (OTCMKTS:GAPFF), a data-driven marketing and loyalty analytics company, is on an uptrend. In the month of August, the share price commenced to creep up from $1.18 to touch $1.88 as of September 6, 2017.This comes as the company commenced to sell its non-core assets to strengthen its balance sheet and obtain cash. It sold Air Miles Trademarks, which returned $53.75 million in cash to the company. Additionally, in the last quarterly release, it noted that GAPFF was trying to simplify the business and reduce the cost structure.We will provide all the details about these new measures in this article and also explain what happened in May, when the company lost almost 70% of its market cap in a few days. Before we explain what happened, have a look at the recent share price action:

1 year chart for GAPFF

1 month chart for GAPFF


What's the company's business model? We could read the following information in the annual report. GAPFF helps clients make better business decisions by providing customer insights. How are these insights issued? The company collects customer interactions by individual companies, financial institutions, and loyalty rewards programs.Clients have three ways of interacting with GAPFF:
  • Coalition Loyalty: it brings together many partners in a loyalty rewards program that obtains a complete picture of customer behavior, and preferences.
  • Loyalty Solutions: it helps clients design, launch and operate loyalty service programs, and advance existing programs.
  • Analytics and Insights: the company obtains insights from the data created on the behalf of clients.
Businesses analytics is best explained in the annual report thought the following words:
"By looking at the transactional, behavioural and contextual data that is collected through our programs and technology, our data analysts find hidden patterns and insights that marketers use to better predict customer behaviours. Using those findings, our clients can provide relevant offers that will influence customer behaviour from the companies they do business with and for the products and services they buy." Source
Recent Developments - What happened in May and how the management reacted?On May 11, 2017, the company announced that Air Canada had decided not to continue working with GAPFF. This was one of the biggest customers of the company, who saw its stock fall after the announcement. From over $6, the share price went down to $3 in only one day and continued falling in June and July to touch the level of $1.24.How did the company react to this bad news?First of all, a serious restructuring process was commenced. The CEO was changed. David Johnston was elected as the new Group Chief Executive of the Corporation effective May 11, 2017. Rupert Duchesne decided to retire. That was not all. On June 8, 2017, the CFO, Tor Lønnum, announced that he was stepping down for family reasons. Roman Doroniuk was elected the interim CFO. Finally, the Pricewaterhouse Coopers, LLP, was also elected as the new auditor.Furthermore, Board of Directors decided to suspend payment of all dividends on the common stock and Preferred Shares. The announcement did not have a large market reaction, but it shows the new phase in which the company was. On August 9, 2017, in the new 10-Q, the market got to know that the company had decided to dispose off non-core assets, simplify and refocus on the business. The goal of the company is to preserve liquidity and build its cash reserves.On August 25, 2017, the new plan gave the first results. The company received $53.75 million from the sale of Air Miles Trademarks. The market capitalization of the company as of September 6, 2017 is $338 million, so the amount of money received is relevant and will definitely help enhance the company's financial position. We appreciate this transaction as it shows that the company was serious when said that it would sell non-core assets.The new strategic business plan seems to be working out. Market participants are buying, pushing up the share price. Mittleman Investment Management, LLC, acquired 1,015,600 shares of the company in August.ConclusionGAPFF had a horrible year, as it lost one of its main clients. However, we believe that the company has taken the correct steps to the right the ship. The CFO and CEO were changed, the auditor was changed, and the company decided to refocus on its business model and sell non-core assets. The new plan was celebrated by the market, which reacted by pushing up the share price. We believe that the upward trend may continue as the turnaround story continues.We will be updating our subscribers as soon as we know more. For the latest updates on GAPFF, sign up below!Image courtesy of Beppe Grillo via FlickrDisclosure: We have no position in GAPFF and have not been compensated for this article.

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