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Aimia cuts 2015 gross billings guidance on slowing Canada, Europe economies

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Aimia said that it will now report its business on a product-line business rather than a geographic business. Aimia said the simplified organizational structure will reduced annual annual expenses by C$20mln.

Aimia (TSE:AIM), a credit card loyalty program manager, lowered its fiscal full-year guidance for gross billings amid challenging economic conditions in Canada and Europe.

Gross Billings are now expected to be between C$2.46 billion and C$2.51 billion, compared to a previous outlook of between C$2.56 billion and C$2.61 billion, the Montreal, Quebec-based company said in a statement on Friday. Last year's gross billings were C$2.59 billion.

"Our two big, core businesses are in Canada and Europe and consumer confidence is low," the Canadian Press cited Aimia group chief executive officer Rupert Duchesne as saying in a TV interview Friday morning on the BNN business channel.

He said an accounting change was responsible for about half of the reduction in gross billings and "the rest, frankly, is due to a slowing economy in both of our major markets."

Aimia reported mixed results in the second quarter. Net income was C$32.6mln, or C$0.17 per share, for the April-to-June quarter, compared to a net loss of C$18.8mln, or C$0.14 per share, for the year-earlier period. Adjusted EPS was C$0.54, topping the C$0.22 average estimate of 5 analysts polled by Capital IQ.

Second-quarter revenue dropped 3.3% to C$536.9mln from C$555.4mln year-over-year. That result lagged behind the analyst consensus of C$560.4mln.

Gross Billings decreased 6.6% to C$605.3mln. The company ascribed the decrease to lower gross billings at Nectar Italia due to the loss of the program's anchor partner on March 1, 2015 and lower gross billings in the US & APAC (Asia-Pacific) region.

Aimia said Canada accounted for more than half its gross billings during the quarter, but billings fell to C$343mln from C$365.2mln in the year-ago period.

Aimia said on Friday Avis Car Rental has chosen the Aimia Loyalty Platform for its rewards program.

Aimia said that it will now report its business on a product-line business rather than a geographic business. Aimia said the simplified organizational structure will reduced annual annual expenses by C$20mln.

Separately, Aimia declared a quarterly dividend of C$0.19 per share, unchanged from the dividend paid in the previous quarter. This dividend is payable on September 30 to shareholders of record at the close of business on September 16.

Shares have retreated 9.3% since the beginning of the year through yesterday and closed at C$13.25.

Quick facts: Aimia

Price: 3.7 CAD

TSX:AIM
Market: TSX
Market Cap: $401.61 m
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