Aimia's Share Buyback Momentum and Strategic Capital Allocation in Q2-Q3 2025: A Deep Dive

In the second half of 2025, Aimia Inc. (TSX: AIM) has demonstrated a disciplined and aggressive approach to capital return through its Normal Course Issuer Bid (NCIB) program. As of June 30, 2025, the company had repurchased and cancelled 6,669,332 common shares since the program's initiation in June 2024, with a weighted-average price of $2.77 per share. This cumulative buyback activity represents a significant portion of its 91.7 million outstanding shares, reflecting Aimia's strategic focus on aligning its stock price with intrinsic value. The renewed NCIB, extended through June 5, 2026, authorizes up to 5,906,629 additional shares for repurchase, underscoring the company's long-term commitment to this initiative.

The Mechanics of Share Buybacks: Enhancing Earnings Per Share (EPS) and Net Asset Value (NAV)

Aimia's Q2-Q3 2025 NCIB execution has directly contributed to improving key financial metrics. By reducing the share count, the company is amplifying earnings per share (EPS) and narrowing the discount of its stock price to net asset value (NAV). For instance, the June 2025 repurchase of 1,083,400 shares at $2.77 per share injected $2.996 million into the program, a move that leverages Aimia's robust liquidity position of $94.7 million in cash and marketable securities. This liquidity is further bolstered by $1.0103 billion in tax loss carryforwards, which provide a buffer against future tax liabilities and free up capital for strategic reinvestment.

The impact of these buybacks on shareholder value is twofold: First, they reduce the discount of Aimia's stock price relative to its intrinsic value, which management estimates to be significantly higher than the current market price. Second, by decreasing the number of outstanding shares, EPS and NAV per share increase, making the stock more attractive to value-conscious investors. For example, Aimia's core businesses—Bozzetto and Cortland International—reported combined adjusted EBITDA of $22.4 million in Q1 2025, demonstrating the underlying strength of its asset base.

Strategic Capital Allocation: Balancing Buybacks with Core Business Transformation

Aimia's capital return strategy is not isolated from its broader operational transformation. The company has prioritized cost-cutting at the holding company level, reducing expenses to $2.7 million as of March 31, 2025, well below its $11 million annual guidance. These savings are directly funneled into the NCIB program, ensuring that buybacks do not strain operational cash flow. Additionally, Aimia's Substantial Issuer Bid (SIB) in February 2025, which replaced preferred shares with senior notes, generated $5.1 million in annual savings, further strengthening its ability to fund repurchases.

The core businesses themselves are a critical enabler of sustainable capital return. Bozzetto, a global leader in industrial textiles, reported $89.1 million in Q1 revenue and $17.0 million in adjusted EBITDA, while Cortland International achieved 19.7% revenue growth to $40.7 million. These results highlight the resilience of Aimia's operating units in a volatile macroeconomic environment, providing a stable cash flow foundation for continued share repurchases. Management has also emphasized the importance of tax-efficient capital allocation, leveraging its $1.01 billion in tax losses to reinvest in undervalued assets or expand its core holdings.

Evaluating Sustainability: Liquidity, Cost Discipline, and Market Conditions

Aimia's ability to sustain its NCIB hinges on three pillars: liquidity, cost discipline, and market conditions. As of June 2025, the company maintains $94.7 million in cash and equivalents, a slight dip from $95.4 million at year-end 2024 but still ample to fund ongoing buybacks. The Toronto Stock Exchange's daily trading limit of 11,828 shares per day ensures compliance with regulatory constraints while allowing for steady execution.

However, external factors such as interest rates and global tariffs could impact the company's ability to maintain this pace. For instance, rising borrowing costs might reduce the attractiveness of debt-fueled buybacks, while tariffs on Bozzetto's industrial textiles could pressure margins. Yet, management has proactively mitigated these risks by diversifying supply chains and securing tax-efficient financing.

Investment Implications: A Compelling Case for Value Investors

For investors, Aimia's Q2-Q3 2025 performance presents a compelling case. The company's share repurchase momentum has consistently narrowed the gap between its stock price and NAV, creating a margin of safety for new buyers. With 79.69% of its 7,009,622 authorized NCIB shares already repurchased by May 2025, the renewed 2026 program offers room for further value creation.

Moreover, Aimia's strategic alignment between operational improvements and capital return initiatives suggests a sustainable model. The core businesses' strong EBITDA margins, combined with aggressive cost-cutting at the holding company, position the company to outperform its guidance of $88–95 million in adjusted EBITDA for 2025. Investors should monitor Q3 2025 results for updates on buyback progress, liquidity management, and the impact of its SIB on EPS.

In conclusion, Aimia's disciplined execution of its NCIB, coupled with a transformative approach to its core businesses, offers a clear path to enhanced shareholder value. While risks such as macroeconomic volatility remain, the company's liquidity, tax advantages, and operational resilience make it a strong candidate for long-term value investors seeking undervalued opportunities in the industrial and specialty chemicals sectors.