Curtain rises well on cinema tech list
TOM PULLAR-STRECKER AND JOHN ANTHONY
Shares in cinema software firm Vista Group International have made a successful debut on the NZX, climbing 8 per cent above their offer price to close at $2.55.
The shares made a modest start in the morning, floating at a 5 cent premium to their $2.35 issue price.
Chief executive Murray Holdaway said there were growth opportunities ahead for Vista, even though cinemas were a mature business in many countries.
Vista's main business is selling software that is used to manage 3000 cinemas in 60 countries, but the firm also sells software to distribute and market films.
Holdaway said Vista had no plans to dive directly into the "specialist" business of digitally distributing films direct to consumers.
He estimated Vista had a 37 per cent share of the global cinema market, but could increase that to 50 per cent.
"We have a great deal more growing to do . . . not only in developing cinema markets such as China, Brazil, Russia and India, but in mature markets, where the total number of screens continues to grow."
While the British, Australian and New Zealand cinema markets were mature, cinema admissions in China, another of Vista's target markets, were growing at 10 to 20 per cent year, he said.
That was despite continuing censorship of Hollywood films, which tended to be limited to the action and family genres.
Chairman Kirk Senior said the transition to a publicly listed company was an important step toward the company growing and diversifying earnings "beyond the film exhibition sector and into the broader film industry".
Holdaway said Vista had some exposure to the digital-download industry through its Maccs distribution software. Companies like Australia's Quickflix that offered films for download could also use its Movio software to research and market films. "But we wouldn't be getting into the actual digital distribution and download business ourselves."
Vista raised $40 million through its sharemarket float and its existing shareholders cashed out $52m by further selling down their stake in the business.
Holdaway said that when he founded the firm 15 years ago, he never anticipated it would become publicly listed. The process of listing had been longer and more difficult than he had expected, but had been a "valuable learning experience".
Vista has forecast its revenues will be $61.5m next year, a 23 per cent increase on its forecast for 2014, and that its profits will rise from a forecast $3.7m this calendar year to $9.1m in 2015.
The company employs 250 staff at its offices in Auckland, the United States, Britain, Holland, Australia and China. A dividend of $3.5m was paid to shareholders before the listing and it is not expecting to pay a further dividend this year or next.
The next significant financial release from the company, likely in a few weeks, will be its 2014 half-year result.
The NZX had asked Vista to publish these, even though they were "historical", and applied to an entity and a reporting period before its listing, Holdaway said.