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Vista shares plunge 19% as 1H net profit falls 23%

Thursday 29th August 2019

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Vista Group International’s first-half net profit fell 22.7 percent, owing to the demise of third-party movie ticket subscription service MoviePass, lower revenue from China, and adverse foreign exchange movements.

The cinema software company says its operating earnings on a like-for-like bases rose 16 percent while revenue from core business was up 19 percent during an “intense period of product innovation in all Vista Group companies.”

Net profit attributable to shareholders for the six months ended June fell to $4 million from $5.2 million in the same six months of 2018.

Vista shares plunged $1.03, or 19 percent, to $4.39 when trading began this morning on the NZX. Before the open, they had risen 35 percent in the last 12 months compared with the benchmark S&P/NZX 50 Index’s 15 percent gain.

Vista says it is accelerating its move to the cloud and a pure software-as-a-service model, begun in 2017, because of demand from cinema exhibition customers and prospects.

“Vista Group’s progress to date, and the market’s realisation that the pace of innovation and ease of access that SaaS solutions deliver are transformative benefits for their operations, has resulted in a customer mindset shift from caution to support; Vista intends to respond accordingly,” the company says.

“Our goal is simple: to deliver a multi-tenant SaaS product for cinema circuits and cinemas of all sizes, in all countries, as fast as we can,” says chief executive Kimbal Riley in a statement.

“Our teams are already immersed in the project and the excitement about our future is infectious.”

Vista is aiming to have its SaaS product in the market during 2021 for both new and existing customers.

The company says its market share globally among cinema complexes with 20 or more screens rose to 49.9 percent, excluding China, up from 48 percent at the end of last year, and to 39.4 percent including China.

Vista currently operates in China through a joint venture and the company says it is “in advanced negotiations” to take a controlling stake in the venture.

It added 481 new multiplex sites, taking the total to 7,683 sites, including 89 new sites in China.

Its Veezi offering for small cinemas added 83 sites, taking the total to 984.

The core cinema segment lifted earnings before interest, tax, depreciation and amortisation by 13 percent to $15.7 million on revenue growth of 15 percent, which the company says demonstrates “sustained growth.” Margins eased to 34 percent from 35 percent.

The Movio data analytics business lifted ebitda 42 percent to $2.3 million and its margin rose slightly to 20 percent from 19 percent.

The company says Movio revenue per active moviegoer grew 27 percent compared with the first-half last year.

Movio added its first Japanese cinema exhibitor, Aeon, as a customer during the six months and increased its footprint to 55 countries.

“Movio Media revenue was strong due to an increase in research revenue and renewed contracts with Amazon, Warner Bros. and Viacom,” the company says.

Other companies within the group contributed ebitda of $600,000, down from $800,000, while early stage investments lost $1 million compared with $500,000 profit the previous year.

Recurring revenue grew 14 percent and now accounts for 61 percent of total Vista Group revenue.

Vista will pay a fully-imputed first-half dividend of 1.2 cents per share, at the top end of the company’s dividend policy range but down from 1.6 cents last year. It will be paid on Sept. 27 to those on the share register on Sept. 13.


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