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Bullboard - Stock Discussion Forum CI First Asset U.S. Tactical Sector Allocation Index ETF T.FUT

TSX:FUT - Post Discussion

Post by BayWall on Nov 15, 2012 8:19am

Advantex

This company began reselling Aeroplan miles in 2010, about 2 years later than Futura and is making more money at it. Not only that, but they want to expand into other categories. Aeroplan willd decide soon.

 

Its sales revenue from marketing: $4,810,000. Most from Aeroplan sales and some from CIBC Advantex program. Compare this with about $1.7 million Aeroplan revenue for Futura.

 

Like Futura. Advantex's operations are funded by debt. A lot of accumulated  debt on their books.

 

Futura had over $11 million in payables, but about $1 million is classified as Futura Member Liability. (I assume from the Futura Rewards program). Whether this is a true payable is unclear. Depends if the issued points get redeemed. So there's some leeway with this liability.

 

In my view the tax loss is the biggest asset Futura has. I would like to know its value, but it could to be between $5 and $8 million for the $29 million in non-capital losses. At a 35% corp tax rate another company would expect to save $10 million plus on taxes, plus additional gains on the extra cash on hand.

 

then how much are the Aeroplan cash stream worth. Get at least $1 million a year. If I was guaranteed a $million/year how much would I pay for it? $5 million for a 20% return. Add everything and there might be something left for Futura shareholders. Then a reverse merger if David Campbell and David Beutel can strike a deal within their circle of contacts.

 

For interest sake, here's Advantex's Aeroplan retail categories:

 

The Company’s merchant partner base currently consists of more than 1,350

merchants operating restaurants; golf courses; independent inns, resorts and selected hotels; spas;

retailers of men’s and ladies fashion, footwear and accessories; retailers of sporting goods; florists

and garden centres; book and newspaper stores; health and beauty centres; dry cleaners; and gift

stores; many of which are leaders in their respective categories (collectively “Retail programs”).

Comment by BayWall on Nov 15, 2012 8:57am
Clarification: May be guaranteed $1 million/year (gross margin), but there still are the expenses to administer the Aeroplan accounts. The cost of sales Futura lists on its income statement only include the 3 cents/mile paid back to Aeroplan.   And then there's the question if whether there are any buyers for the assets. They too would have to finance operations possibly by debt ...more