Mamma Mia! Tom Douramakos (left) is out, Brett Proud (right) is in as Guestlogix CEO. But will the company stick around or sell itself off like so many other Canadian techs?Guestlogix (TSX:GXI) this morning announced that Brett Proud will replace Tom Douramakos as CEO.
Company co-founder Proud, who was executive vice-president of new markets and products, was described by the company as a “recognized as a leader in on-board shopping, payment and entertainment technologies”. The release cited his more than two-decades of experience in the IP sector, highlighting his work with Mastech, Keane and Accenture.
Guestlogix’s other co-founder, Douramakos, will remain on as a director.
The company also made an announcement with a familiar ring to Canadian tech investors of late; it has initiated a strategic review to look at alternatives for the company’s future. A special committee of four independent directors will work with Canaccord Genuity.
M Partners analyst Ron Shuttleworth spoke with Proud this morning, who said the company will make the decision by Q1 to invest in organic growth, grow through acquisition, or sell the company entirely. The M Partners analyst says a change at the CEO level should have no immediate impact because Guestlogix’s contracts are long term. But he says the overall impact of today’s release is positive because the company can now evaluate its potential with fresh eyes. In a research update to clients today, Shuttleworth maintained his BUY recommendation and $0.90 target on Guestlogix.
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Guestlogix was formed in 2002 and has since become the dominant player in the business of delivering ancillary revenue to airlines, with contracts to service more than a billion trips annually. At last year’s M Partners Technology Conference in Toronto, Douramakos pointed out that all little extras; a fee for your second bag, a surcharge for reserving your seat in advance, are actually saving the industry, producing close to $60 billion in revenue last year. Without this ancillary revenue, the airline industry would still be a losing game. Guestlogix’s revenue has grown from just $5.43 million in fiscal 2007 to $22.8-million in 2011. The company’s stock, meanwhile, has moved the other way, falling from nearly $2 in early 2012 to recent lows under $.40 cents.
If Guestlogix should decide to grow organically, Shuttleworth says there are places it can go. He says he is pleased with the company’s decision to move away from its failed OnTouch merchandising strategy and to focus on selling retail systems to the transportation industry. He says the company has the opportunity to gain airline market share in the Asia-Pacific region, and can attack the rail market more aggressively.
At press time, share of Guestlogix were up 11.86% to $.66 cents.