RE: Auto sector loyalty programs It's nice that somethings work in the loyalty business. But back to Futura. There still remains the question of the large quarterly losses. I don't want to appear bullish by my posts. Some got upset with that. There's money to be made, but it will not be easy to turn a profit.
Here, I will try to balance the bullish with some less so stuff, soto even things out and accommodate the nay sayers.
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April 12, 2012 NR. A "real validation" or a hyped-up news release?
"We are excited to enter the large American market in four different geographic regions," said David Campbell, president and chief executive officer of the Futura Loyalty Group. "This represents a real validation that merchants in different sectors and market areas in the United States see the value in our customer-driven loyalty marketing services and solutions.
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The processing division status?
The Company has been granted the option to repurchase the Processing Division
between January 15, 2012 and June 30, 2012 (the “Call Option Period”). The purchase
price for the Processing Division at the time the call option is exercised will be based on
the fair market value of the Processing Division at the time and payment will be satisfied
by the cancelling of the promissory notes and the issuance of shares of the Company for
any additional value above the aggregate value of the promissory notes up to the fair
market value. The Company anticipates that it will repurchase the Processing Division
within the Call Option Period.
Madison Grant Fund Inc., an investment banking firm specializing in advising on tax
structured financings for public companies, acted as advisor to the Company in
connection with the transaction.
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July 29, 2011 news release, the "drive to profitability". Looking at the recent financials, it's going the other way. If the company prospects were so rosey, why all the resignations this year? Significantly ramp up sales?
"We have a number of great growth opportunities that this capital will allow us to execute on as we drive to profitability. In conjunction with our recently signed marketing agreements with numerous provincial auto associations, this capital allows us to significantly ramp up our sales, marketing and distribution of loyalty currencies to auto dealers across the country," stated Mark Farrell, chief executive officer of Futura.
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June 29, 2012
"Also at the meeting, management gave an overview of current operations, including that the company continues to see strong growth".
Do shareholders see this strong growth also? How do we measure this growth? But the reality are the large losses. The B2B idea is encouraging and has a chance to be further expanded. The wholesale business generally is an area to look at. I don't think Aeroplan itself will venture far here, rather perferring to stay within the retail sector. So this may be a growth opportunity for Futura as a reseller of Aeroplan.
But for the auto business, I think this move was done more in response to encourage more dealership sign-ons and provide some synergy.
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The bottom line is the bottom line. Futura must adddress this quickly.The ever-evolving loyalty marketplace doesn't allow much room for experiments or miscues. Almost have to get it right the first time or get left in the dust.
The news releases above have encouraging words, like strong growth, drive to profitability, great growth opportunities, etc, but these are only words, not something investors should bet their money on. A 1/2 cent stock and the financial statements prove this.