VGL – FY2019 Results Announcement
Market Announcement
27 February 2020, Vista Group International Limited, Auckland, New Zealand.
_______________________________________________________________________________________________________________
Vista Group Results for 2019
[Auckland, NZ, 27 February 2020]: Vista Group International (NZX & ASX: VGL), announces its 2019
result today, reporting continued growth across its businesses. With its global film industry vertical
integration strategy, Vista Group has shown significant success in its drive toward achieving majority world
market share across its movie industry sectors. Vista Group is now three times, by revenue, the size it was
in 2014 when it listed on the NZX and ASX.
Key Financial Metrics
• Revenue up 11% to $144.5m
• EBITDA down 5% to $31.1m on a like for like basis
• Operating cashflow of $15.5m
• Final dividend of 2.1 cents per share.
Key Operational Metrics
• Vista Group global leadership position in the cinema industry grew to 51% market share of the 20+
screens segment excluding China, up from 48% in 2018
• 857 new Vista Cinema sites (including 143 sites in China) – another very strong year of site growth
to a cumulative 8,059 sites
• Core revenue growth (Cinema and Movio) 16% for the year
• 11% growth in recurring revenue to $88.2m – representing 61% of total revenue.
Please refer to the following attachments for full details of the result.
• 2019 Financial Statements and Management Commentary
• 2019 Annual Result Investor Presentation
• 2019 Annual Result Media Announcement
• NZX Results Announcement - 2019
• NZX Distribution Notice - 2019
Matt Cawte
Chief Financial Officer
Vista Group International Limited
Contact: +64 9 984 4570
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VISTA GROUP 2019 FULL YEAR RESULTS
27 February 2020
IMPORTANT NOTICE
This presentation has been prepared by Vista Group International Limited (“Vista Group”).
Information in this presentation:
•is provided for general information purposes only, does not purport to be complete or comprehensive,and is
notanofferor invitation for subscriptionorpurchaseof, orsolicitationof anofferto buy or subscribe for,financial
productsin Vista Groupor anyofits related companies;
•does not constitutea recommendation orinvestmentor any other typeof advice, and may not be relied upon in
connection with any purchase or saleoffinancial products in Vista Group or anyof its related companies;
•should be read in conjunction with, and is subject to, Vista Group’s financial statements, market releases and
informationavailableon Vista Group’s website (www.vistagroup.co.nz) and on NZX Limited’s website (www.nzx.com)
under ticker code VGL;
•may include projections or forward looking statements about Vista Groupand its related companiesand the
environmentsin whichtheyoperate. Such forward-looking statements are based onsignificant assumptions and
subjective judgements which are inherently subject torisks, uncertainties and contingencies outsideof Vista Group’s
control. Although Vista Group’s management may indicate and believe the assumptions underlying the forward looking
statements are reasonable, any assumptions could prove inaccurate or incorrect and, therefore, there can be no
assurance that the results contemplated in the forward looking statements will be realised.Vista Group’s actual results or
performance may differ materially from any suchforward lookingstatements;and
•may include statements relating tothepast performanceof Vista Group and/or its related companies, whichare not,
andshould not be regarded as,a reliable indicatorof future performance.
While all reasonable care has been taken in compiling this presentation, Vista Groupand its related companies, and their
respective directors, employees, agents and advisersaccept no responsibility for any errors or omissions.Noneof Vista
Group or its related companies, or anyof their respective directors, employees, agents or advisers makes any representation
or warranty, express or implied, as to the accuracy or completenessof the information in this presentation or as to the
existence, substance or materialityof any information omitted from this presentation.
Unless otherwise stated, all information in this presentation isexpressedat the dateof this presentationand all currency
amounts are in NZ dollars.
2
AGENDA
VISTA GROUP SUMMARY
KIMBAL RILEY
GROUP CHIEF EXECUTIVE
FINANCIAL RESULTS
MATT CAWTE
CHIEF FINANCIAL OFFICER
OPERATIONAL HIGHLIGHTS
KIMBAL RILEY
GROUP CHIEF EXECUTIVE
WILL PALMER
CEO MOVIO
OUTLOOK
Q+A
3
4
VISTA GROUP SUMMARY
Solid 2
nd
half performance underpins results in line with guidance.
•Group revenue growth of 11% highlighted by 16% growth for core
business
•Solid underlying EBITDA performance
•SaaS revenue now 33%, recurring revenue steady at 61% up $8m
•Good revenue growth and a strong profit improvement from AGC
•Balance sheet remains strong with low debt and a strong
cash position
•Vista Cinema market share of Enterprise (20+ screens segment)
excluding China is 51%, up from 48%
5
FINANCIAL RESULTS
6
RECURRING REVENUE
$88.2m
(up 11%)
OPERATING PROFIT
$21.3m
(down 14%)
TOTAL REVENUE
$144.5m
(up 11%)
OPERATING CASHFLOW
$15.5m
(down44%)
FINALDIVIDEND
2.10
cents per share
EBITDA
1
$31.1m
(down5%)
1
EBITDA is a Non-GAAP measure and is defined as earnings before net finance costs, income tax, depreciationandamortisation, acquisition expenses, capital gains/losses,
impairment losses and equity-accounted results from associates and joint venturecompanies.
7
FINANCIAL HIGHLIGHTS
VISTA GROUP - 6 YEAR REVENUE
0.
25.
50.
75.
100.
125.
150.
175.
201420152016201720182019
$ MILLIONS
+$18.2M
+$23.2M
+$18.0M
+$24.1M
25%
CAGR 2014-2019
8
+$13.8M
RECURRING REVENUE
TRADING PERFORMANCE
1
EBITDA is a Non-GAAP measure and is defined as earnings before net finance costs, income tax, depreciation and amortisation, acquisition expenses, capital gains/losses, impairment losses and equity-accounted results
from associates and joint venture companies.
2
To enable a like for like comparison, the 2018 results have been adjusted to include the impact on NZ IFRS 16. See section 8.4 of the following annual financial statements for full details on the impact of adopting NZ IFRS 16
on both the current and prior year.
3
EBITDA adjusted for Long Term Incentives not achieved in 2019.
9
NZ$M (Twelve Months Ended)
31 Dec 201931 Dec 2018% Change
Revenue
144.5130.711%
Expenses123.3107.015%
Foreign exchange losses / (gains)(0.1)(1.0)
Operating Profit21.324.7-14%
Net finance revenue / (costs)(1.1)(0.7)
Share of loss from associates / other(1.8)(3.0)
PROFIT BEFORE TAX
18.421.0-12%
Net Profit attributable to Vista Group
Shareholders
10.812.3-12%
EBITDA
1,2
EBITDA adjfor LTI
3
31.1
29.1
32.8
32.8
-5%
-11%
•Good top line growth, especially in
core
•Expense growth higher with
investment in team and global reach
•Performance from associates
improved
•Reported EBITDA benefits from
reduced LTI costs in 2019.
OPERATING SEGMENTS
10
2019
NZ$M
CinemaMovio
Additional Group
Companies
Early Stage
Investments
CorporateTotal
Revenue
96.325.717.62.92.0144.5
EBITDA
1
30.96.83.3(1.3)(8 .6)31.1
EBITDA % of revenue
32%26%19%n/an/a22%
2018
NZ$M
Cinema
Movio
Additional Group
Companies
Early Stage
Investments
CorporateTotal
Revenue
82.522.815.04.55.9130.7
EBITDA
1
28.36.42.10.4(4.4)32.8
EBITDA % of revenue
34%28%14%9%n/a25%
Revenue Growth
17%13%17%-36%n/a11%
•Core Revenue Growth (Cinema and Movio) was 16%
•2018 EBITDA has been restated to include IFRS16 lease cost adjustments (previously reported as $29.2m).
1
EBITDA is a Non-GAAP measure and is defined as earnings before net finance costs, income tax, depreciation and amortisation, acquisition expenses, capital gains/losses, impairment losses and equity-accounted
results from associates and joint venture companies.
FINANCIAL POSITION
11
•Strong balance sheet maintained
•2018 cash benefited from $7m
customer prepayments
•IFRS16 Lease accounting increases
both sides of balance sheet and
impacts tax balances, primarily non-
current
•Receivables steady on prior year
•Increase in intangibles (non-current
assets) driven by capitalisationof
internally generated softwareand
deferred tax.
NZ$M
31 Dec 201931 Dec 2018% Change
Cash & short term deposits
19.534.4-43%
Other Current Assets58.262.2-6%
Non-Current Assets165.9124.533%
Current liabilities44.543.72%
Non-Current liabilities
35.618.098%
NET ASSETS / TOTAL EQUITY
163.5159.43%
CASH FLOW
12
•Collections in line with prior year,
adjusting for 2018 pre-payments
•Working capital up versus prior year
•Underlying cash generation in line with
previous years
•Investment in internally generated
software consistent with Vista Group’s
product strategy.
NZ$M
31 Dec 201931 Dec 2018% Change
Receipts from customers
143.6132.48%
Payments to suppliers & staff(118.0)(96.0)23%
Tax & interest(10.1)(8.8)15%
Cash flow fromoperating activities15.527.6-44%
Investments in internally generated
softwareand other intangibles
(12.6)(7.9)59%
Other investing activities(6.1)(2.2)177%
Cash flow from financing activities(11.7)(5.9)98%
NET MOVEMENT IN CASH HELD
(14.9)11.6-227%
Foreign exchange differences0.01.8n/a
CASH BALANCE
19.534.4-43%
DIVIDEND PROPOSAL
•The Boardhave resolved to pay a final dividend at the top of the policy range
(50%) and that the dividend will carry full imputation credits
•The value of the final dividend will be 2.10cents per share representing a
total payment of $3.5m
•The record date for the dividend is 5pm on Friday, 13March 2020with
the payment date set for Friday, 27March 2020
•This is in addition to the interim dividend declared and paid in September
2019of 1.20 cents per share, a total payment of $2.0m
•Total 2019 dividend is 3.30 cents per share compared to 3.70 cents per share
in 2018.
13
OPERATIONAL HIGHLIGHTS
14
CINEMA SEGMENT
Vista Cinema provides cinema management software to the world’s largest cinema exhibitors
•857new sites in 2019(including 143sites in China)
•Total now 8,059. Total in China now 1,101
•Overall, Vista and Veezi now have customers in 116 countries
•Market share globally of enterprise segment(excluding China) is 51%, 40% with China
•Whole cinema market share (excluding China) is 40%, 29%with China
•Revenue from non-software ecosystem over $6m – highlighted by hardware and payment partner fees.
$96.3M
REVENUE
GROWTH +17%
12 %
GROWTH IN TOTAL
SITES TO 8,059
32%
EBITDA%
$30.9M
EBITDA
GROWTH +9%
'-
300
600
900
1,200
2013201420152016201720182019
NEW SITES ADDED
existing customersnew customersacquisitions
0
2,000
4,000
6,000
8,000
10,000
2013201420152016201720182019
TOTAL SITE COUNT
0
15
VISTA MARKET SHARE
Vista Cinema percentage of the world market – for cinema exhibition companies with 20+ screens
86% CANADA
2,081/2,435 screens
50% USA
17,209/34,779 screens
98% CENTRAL AMERICA
7,684/7,854 screens
40% SOUTH AMERICA
2,624/6,543 screens
91% AFRICA
835/915 screens
63% MIDDLE EAST
1,940/3,106 screens
36% EUROPE
7,377/20,728 screens
16% CHINA
6,529/40,636 screens
37% ASIA (excl. CHINA)
5,373/14,450 screens
97% AUSTRALASIA
1,928/1,989 screens
40% WORLDWIDE
53,580/133,435 screens
51%
Excluding China
16
CINEMA SEGMENT - CONTINUED
3%
INCREASE IN SITE
REVENUE TO
$604P.MTH
22%
INCREASE
IN ARR
18%
GROWTH IN
CONTRACTED
SITES TO 1,062
26%
RECURRING
REVENUE
GROWTH
Provides cinema management software to the world’s independent cinema exhibitors
•161new sites bring total site numbers to 1,062– including China
•China now with 88sites
•3% increase in revenue per month per site compared to 2018
•Revenue from eco system may become significant in 2020
•New innovation for Veezicustomers included Time & Attendance, Tips ‘n’ Tabs and Online Gift Cards.
0
250
500
750
1,000
1,250
2013201420152016201720182019
VEEZI – TOTAL SITE COUNT
0
150
300
450
600
750
2013201420152016201720182019
AVERAGE REVENUE PER MONTH PER SITE
17
18
$6.8 M$25.7 M
EBITDA
GROWTH +6%
CORE REVENUE
GROWTH +13%
MovioCinema
•Globalrevenuegrew19%, increasingfootprintto57countries.
•RegionalgrowthinEMEAof38%, withfirstOdeonsiteliveinQ4 andremaining124sitesontrackto
go-livein 2020.
•57(66%) ofexhibitorsnowsignedInnovationagreementswithfixedannualincreasesoftypically7%.
MovioResearch
•Globalrevenueincreasedby15%, with100%ofResearchrevenuenowrecurringin nature.
•Ignoringtheone-offrevenueearnedinSeptember2018fromprovidinghistoricaudiencereportingto
Disney,annualrevenuegrewby42%.
•Signedaudienceevolutionreportingslatedeal(18titlesin 2020)withWarnerBrosUKin December.
MovioMedia
•Non-Epsilonrevenueincreasedby17%- digitalcampaignrevenueup68%, directcampaignrevenue
down16%.
•SlateagreementexecutedwithA24inOctoberfordigitalmediacampaigns,furthervalidating
commercialmodel.
Global leader in data-driven marketing, providing products and services to
exhibitors, studios and film advertising specialists.
24%
Growthin recurring
revenue across Movio
Cinema and Research
18%
Growthin Connected
Moviegoers to 9.8M
30%
Growth in connections, sent
3.0B emails, SMS, push
$1.92
Core Revenue per Connected
Moviegoer in the US
Revenue Breakdown ($m NZD)
201720182019
Cinema
10.612.414.7
Research
2.74.75.4
Media
1.75.04.9
Core Revenue
15.022.125.0
Eliminations
0.60.70.7
Reported
15.622.825.7
19
Active Moviegoers (Millions)Core Rev/ActiveMoviegoers (NZ cents)
Region20182019Growth20182019Growth
North America
20200%86916%
Rest of World
253332%192216%
Global
455318%4948-2%
Increasevolume–ActiveMoviegoers
•Continuedinnovationandinvestmentin MovioCinema.
•Focusongrowthin EMEAregionandexploringopportunitiesin Japan.
•Implementationofthenon-membersolutionallowingexhibitorstobuild
moviegoerprofilesbasedononlineticketpurchasesofnonloyalty
members.
Critical KPI’s & Growth Drivers
IncreaserevenueperActiveMoviegoer
•ExpandingexistingUSResearchdeals.
•GrowthofResearchandMediabusinesswithintheUK.
•DevelopmentofMDPtargetinginternationalfilmdistributorswiththeabilityto
operatein newmarkets.
1 ActiveMoviegoershavepurchasedatleastonetickettoa moviefroma participatingexhibitorduringtherecent12monthrollingperiod.
2 CoreRevenue/ ActiveMoviegoersis presentedabove,previouslyallRevenue/ ActiveMoviegoershasbeenpresented.
3 ConnectedMoviegoersarea subsetofActiveMoviegoersavailablefordigitalcampaigns.
ADDITIONAL GROUP COMPANIES
World leading film marketing
products
•Modest revenue growth (7%)
and EBITDA performance –
invested to establish LA studio
•Q4 highlighted by $1m+ of
creative projects for studios
•Traffic across all Powster
platforms grew 23% over 2018
•Increases in coverage of top
100 films in US, UK, and
International
•FWA award for creative work
with 1917 film.
Movie and cinema review and
showtime guide
•Usersup 13% to 8.2m
across New Zealand and
Australia
•Strong increase in
advertising revenue in
Australia
•Extending the lead as the
largest independent movie
site in Australasia.
$17.6M
REVENUE
GROWTH +17%
$3.3M
EBITDA
GROWTH +57%
Provides world leading theatrical
distribution software
•Good revenue growth 21% and
positive EBITDA contribution
•Development of TDS v10 a
unified platform for non-US
distributors nearing completion
•Warners domestic relationship
onto normal commercial footing
•MICA product live with multiple
customers.
20
Box Office Reporting
•Good revenue growth
(35%), albeit off a small
base
•Breakeven in H2 – self
sustaining
•Strong geographic
expansion continues
•Domestic (North America)
coverage now at 65%.
EARLY STAGE INVESTMENTS
$2.9M
REVENUE
GROWTH -36%
($1.3M)
EBITDA
21
Software to optimise film
forecasting and scheduling
•Modest revenue growth (13%)
•Stronger second half
•Increasingly key component
of Vista Cinema contracts
•Integration with Vista Cinema
Film Manager completed.
A platform to share film digital
assets & enable new cinema
ticketing sales channels
•movieXchange Tickets
volume significantly reduced
with the demise of
MoviePass
•movieXchange Film uptake
continues to grow
•Integration into Vista
Cinema complete during Q4.
ASSOCIATE COMPANIES
Vista China Operating Performance
•2019 revenue of $19.2m down 7% on 2018
•EBITDA result small loss for 2019
•Percentage of revenue based on share of online ticket sales reached 80% by year end
•Strategy fine tuned to focus on luxury top end cinemas with partner relationships for independent market.
China film industryupdate
•2020 box office in China will be impacted by the Coronavirus. The extent of this impact is unclear
•Vista China remains an associate company (results not consolidated)
•We have initiated discussions with our Joint Venture partner WePiaoto pause our previously announced
equity increase transaction until the impact of Coronavirus on the cinema industry and on Vista China
becomes clearer.
Stardust
•Stardust was deconsolidated in February 2019 and continues to operate independently of the Vista Group.
22
UPDATE ON VISTA CINEMA SAAS TRANSFORMATION
Key Milestones
• Detailed internal program reporting established
• Program manager appointed
• Commercial program established and
resourced
• First outsource partner engaged and underway
• 25 additional SaaS focused technologists
engaged.
23
VISTA GROUP THEMES
SIMPLIFY AND SCALE
•Cinema Intelligence and
movieXchangenow integrated
into Vista Cinema
•100% ownership of Numero
•Vista Cinema now direct in
South East Asia and Spain
•Stardust transitioned to
Associate.
24
INCREASE TAM
•Transformation to SaaS under
way for Vista Cinema
•Offices opened in Kuala
Lumpur and Amsterdam,
presence in Sao Paulo
•Investment in sales resource
for Vista Cinema ecosystem
•Vista Digital established to
broaden offerings to
customers.
INNOVATION
•Mica released by MACCS to
target small distributors
•Serve sold 1m items in the last
30 days from 550 devices
•MX Film added 10k screens
•Horizon live across 600 sites
•Moviopiloting MDP to target
international distributors.
VISTA GROUP THEMES
TOP 10 CUSTOMERS
•Top 10 customers accounted
for 33% of revenue (up from
29%)
•Structure being piloted to
better manage large multi-
national customers
•Simplification of Group
structure part of this process.
25
RECURRING REVENUE
•Impact of transition to SaaS
post 2021
•Positive trends in Veezi,
ecosystem, and with
innovation offerings across
Group
•Vista Managed Service
offering (not SaaS) established
and live with customers.
UNDERSTAND MOVIEGOERS
•Upcoming release of MovioCinema
enhanced AI capabilities
•MovioResearch is expanding the
range of data insights available
•MDP launch will target international
distributors – a new segment for
MovioMedia.
OUTLOOK
•We expect revenue growth in the region of 13-18% in 2020 (excluding
consolidation of Vista China)and to maintain underlying EBITDA margin
percentage
(1,2)
•Industry analysts predict a solid box office performance (excluding China) for
2020 with a broad range of exciting films
•We are pleased with the progress Vista Cinema has made in accelerating the
move to SaaS
•We have a strong balance sheet, strong client relationships, and an exciting
pipeline of innovation.
26
1
EBITDA is a Non-GAAP measure and is defined as earnings before net finance costs, income tax, depreciation and amortisation, acquisition expenses,
capital gains/losses, impairment losses and equity-accounted results from associates and joint venture companies.
2
EBITDA adjusted for Long Term Incentives not achieved in 2019.
QUESTIONS
27
THANK YOU
28
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1
Annual Report 2019
ANNUAL
FINANCIAL
S TAT E M E N TS
VISTA GROUP INTERNATIONAL LIMITED
2019
vistagroup.co
01 Management commentary
03 Statement of comprehensive income
04 Statement of changes in equity
05 Statement of financial position
06 Statement of cashflows
07 Notes to the financial statements
TABLE OF
CONTENTS
Management commentary
The Board and Management are pleased to present the full year financial statements and highlights of Vista
Group International Limited (the ‘Company’ and its subsidiaries, collectively ‘Vista Group’), for the year ended
31 December 2019.
Key financial metrics
• Revenue up 11% to $144.5m
• EBITDA
(1)
down 5% to $31.1m on a like for like basis
(2)
• Operating cashflow of $15.5m
• Final dividend of 2.1 cents per share.
Key operational metrics
• Vista Group global leadership position in the cinema industry grew to 51% market share of the 20+ screens
segment excluding China, up from 48% in 2018
• 857 new Vista Cinema sites (including 143 sites in China) – another very strong year of site growth to a cumulative
8,059 sites
• Core revenue growth (Cinema and Movio) 16% for the year
• 11% growth in recurring revenue to $88.2m – representing 61% of total revenue.
Industry overview
Box Office
2019 was another good year for the film industry, with global box office of $US42.5b, an all-time high. European
receipts up 4.5% on 2018 to a new record high and domestic US box office at $US11.4b, the second best year ever.
China continued to break records in attendance, screen growth and film releases in 2019.
Segment overview
Cinema
Vista Cinema continues to consistently add around 800 sites per year. In 2019, by adding 857 new sites to its slate,
it now serves over 8,000 sites worldwide representing 40% of all large circuits. Revenue was up 17% and like for
like EBITDA
(1,2)
up 9%. Recurring revenue was steady at 52% of total revenue and revenue from third parties in the
ecosystem increased strongly. Particularly pleasing is the expansion of payment processing opportunities the team
are exploring.
Vista Cinema continues to invest considerably in its product roadmap. A special mention also goes to the product
development organisation in Vista Cinema, who have delivered new products, innovated with existing products,
taken on new implementation for some of the world’s largest cinema chains and embarked on a significant
SaaS transformation.
Veezi continues to build momentum with 161 additional sites added and now serves more than 1,000 customers
worldwide. Veezi ARR
(3)
(excluding China) was up 22% in the year – driven by an increase in sites and a modest
increase in revenue per site.
Movio
Movio Cinema and Movio Research (now split out from Movio Media) reported solid growth, 19% and 15% respectively,
in their customer base and revenues. Pleasingly, Movio Cinema is now in 57 countries, with strong growth particularly
in EMEA in the last 12 months and 100% of Movio Research’s revenue is now recurring in nature.
Movio Media was flat on 2018, however it made strong progress in the key area of digital campaigns (68%).
This offset a reduction in direct campaigns (16%).
The Moviegoer Data Platform announced in 2019 has progressed well and will have its first pilot customer in test from
March 2020.
01
Annual Financial Statements 2019
Additional Group Companies
This segment comprises of Maccs, Numero (from October 2019), Powster and Flicks.
Maccs was the standout performer, recording strong revenue growth of 21% and positive EBITDA
(1)
, while launching
its new Mica offering, aimed at serving the independent distributor market segment.
Numero had a good year, with revenue up due to wider customer uptake and was breakeven for Q4 2019.
Powster grew steadily in the year whilst building its internal capabilities in the US to complement its UK offering.
The volume of contracts and project opportunities increased in Q4 2019 and Powster enters 2020 with a strong
pipeline. Traffic across the Powster platforms increased 23% over the prior year.
Flicks continues to extend its lead as the largest independent movie site in Australasia. Sales and marketing
investment in Australia resulted in good growth in the second half of the year. Users were up 13% over 2018.
Early Stage Investments
This segment comprises the businesses of Cinema Intelligence and MovieXchange and generated revenue of $2.9m
and an EBITDA
(1)
loss of $1.3m in 2019. Both businesses are tracking to breakeven and will be folded into the Cinema
segment from 2020, as there is a significant overlap in current and expected customer base. This will greatly reduce
both businesses’ sales and marketing costs.
Associates and Joint Ventures
Vista China’s revenue was slightly down on 2018 and its net loss reduced significantly. Vista China’s percentage of
revenue based on share of online ticket sales reached 80% by year end and the team have fine-tuned their strategy
to focus on luxury top end cinemas with partner relationships for the independent market.
In December 2019, Vista Group announced that it had agreed to purchase a further 14.5% of Vista China from its
partner WePiao. Due to the uncertainty around the impact of the coronavirus (COVID-19), Vista Group initiated
discussions with WePiao in February 2020 that it intends to pause the transaction until the impact can better
be assessed.
Stardust was deconsolidated in February 2019 and continues to be run and funded independently of the Vista Group.
Financial overview
Trading performance for 2019 represents a continuation of growth across the Vista Group. Reported revenue was
up 11% and up 14% excluding the one-off Vista China localisation revenue in 2018. EBITDA
(1)
was down 5% on a like
for like basis
(2)
to $31.1m. This was above expectations, though benefited from reduced LTI scheme costs ($2.0m)
due to some parts of Vista Group not achieving their targets.
During the year, Vista Group was required to implement the new lease standard (NZ IFRS 16) which impacts the
current year reported results within costs, EBITDA
(1)
and various sections of the balance sheet. The first-time adoption
of this standard is explained in section 8.4 of the following annual financial statements.
Vista Group continues to maintain a strong balance sheet. Total trade receivables at year end were consistent with
the half year and continue to be an area of focus for management. Intangible assets increased as a result of the
continued capitalisation of internally generated software ($11.7m) as Vista Group continues to invest for the future.
Vista Group continues to produce positive cashflow from operating activities. As noted in the prior year Management
Commentary, 2018 operating cashflow benefited from one-off early customer payments ($7.6m) against which
no revenue could be recognised. Excluding this timing impact, the underlying operating cashflow performance
of the business is in line with 2018. Investing cashflow increased with increases in both software development and
the fit out of our new Los Angeles premises. Cash balances were $19.5m at year end.
With the positive operating result, strong balance sheet and cash position, Vista Group has declared a final
dividend of 2.1 cents per share ($3.5m) bringing the full 2019 dividend to 3.3 cents per share ($5.5m). This
compares to 3.7 cents per share in 2018.
(1) EBITDA is a non-GAAP measure and is defined as earnings before net finance costs, income tax, depreciation and amortisation, acquisition
expenses, capital gains/losses, impairment losses and equity accounted results from associates and joint venture companies.
(2) To enable a like for like comparison, the 2018 results have been adjusted to include the impact of NZ IFRS 16. See section 8.4 of the following
annual financial statements for full details on the impact of adopting NZ IFRS 16 on both the current and prior year.
(3) Annual recurring revenue (ARR) is a 12-month forward view of recurring revenue components of a software business at a point in time.
For Veezi, it represents the number of contracted cinema sites at December, multiplied by the average revenue per site for the preceding year.
02
Vista Group International Limited
20192018
SECTIONNZ$mNZ$m
Total revenue2.1, 2.2144.5 130.7
Sales and marketing expenses2.39.5 8.5
Operating expenses2.368.2 59.9
Administration expenses2.345.5 38.3
Acquisition expenses0.1 0.3
Foreign currency gains (0.1)(1.0)
Total expenses 123.2 106.0
Operating profit21.324.7
Finance costs(1.7)(1.0)
Finance income0.6 0.3
Share of loss from associates and joint ventures5.3(2.2)(3.0)
Capital gains and losses2.30.4 -
Profit before tax18.4 21.0
Tax expense6.1(5.6)(8.0)
Profit for the year 12.8 13.0
Profit for the year is attributable to:
Owners of the parent10.8 12.3
Non-controlling interests 2.0 0.7
Profit for the year 12.8 13.0
Other comprehensive income
Items that will not be reclassified subsequently to profit and loss:
Excess income tax benefit on share-based payments6.2- 0.2
Items that may be reclassified subsequently to profit or loss:
Exchange differences on translation of foreign operations, net of tax (0.6)1.2
Total other comprehensive income(0.6)1.4
Total comprehensive income for the year 12.2 14.4
Total comprehensive income for the year is attributable to:
Owners of the parent10.2 13.6
Non-controlling interests 2.0 0.8
Total comprehensive income for the year 12.2 14.4
Earnings per share for profit attributable to the owners of the parent
Basic earnings per share (cents)7. 2$0.07 $0.07
Diluted earnings per share (cents)7. 2$0.06$0.07
The above statement should be read in conjunction with the accompanying notes.
Statement of comprehensive income
For the year ended 31 December 2019
03
Annual Financial Statements 2019
Statement of changes in equity
For the year ended 31 December 2019
ATTRIBUTABLE TO THE OWNERS OF THE PARENT
CONTRIBUTED
EQUITY
RETAINED
EARNINGS
FOREIGN
CURRENCY
RESERVE
SHARE-BASED
PAYMENT
RESERVETOTAL
NON-
CONTROLLING
INTERESTS
TOTAL
EQUITY
SECTIONNZ$mNZ$mNZ$mNZ$mNZ$mNZ$mNZ$m
Balance at 1 January 201959.4 80.9 3.2 2.8 146.3 13.1 159.4
Accounting policy change8.4-(0.4)--(0.4)(0.1)(0.5)
Restated total equity59.4 80.5 3.2 2.8 145.9 13.0 158.9
Profit for the year-10.8 --10.8 2.0 12.8
Other comprehensive income--(0.6)-(0.6)-(0.6)
Total comprehensive income-10.8 (0.6)-10.2 2.0 12.2
Transactions with owners in their
capacity as owners:
Non-controlling interest change-----(1.3)(1.3)
Share-based payments7. 52.4 --(0.7)1.7 -1.7
Dividends paid7. 3-(5.5)--(5.5)(2.5)(8.0)
Balance at 31 December 201961.8 85.8 2.6 2.1 152.3 11.2 163.5
Balance at 1 January 201857.8 75.2 2.1 1.7 136.8 11.2 148.0
Accounting policy change -(1.3)--(1.3)-(1.3)
Restated total equity57.8 73.9 2.1 1.7 135.5 11.2 146.7
Profit for the year-12.3 --12.3 0.7 13.0
Other comprehensive income-0.2 1.1 -1.3 0.1 1.4
Total comprehensive income-12.5 1.1 -13.6 0.8 14.4
Transactions with owners in their
capacity as owners:
Issue of equity-----1.9 1.9
Non-controlling interest change0.2 ---0.2 (0.2)-
Share-based payments7. 50.9 --1.6 2.5 -2.5
Dividends paid7. 3-(5.5)--(5.5)(0.6)(6.1)
VCL share-based payment0.5 --(0.5)---
Balance at 31 December 201859.4 80.9 3.2 2.8 146.3 13.1 159.4
The above statement should be read in conjunction with the accompanying notes.
04
Vista Group International Limited
20192018
SECTIONNZ$mNZ$m
CURRENT ASSETS
Cash19.534.4
Trade and other receivables5.156.261.4
Income tax receivable 2.00.8
Total current assets7 7.796.6
NON-CURRENT ASSETS
Property, plant and equipment5.27. 35.4
Lease assets5.821.8-
Investment in associates and joint ventures5.331.631.9
Goodwill5.469.963.9
Other intangible assets5.627. 420.5
Deferred tax asset6.27. 92.8
Total non-current assets 165.9124.5
Total assets 243.6221.1
CURRENT LIABILITIES
Borrowings – related party4.20.2-
Trade and other payables5.713.218.6
Lease liabilities5.86.1-
Deferred revenue5.922.921.4
Contingent consideration0.4-
Income tax payable 1.73.7
Total current liabilities44.543.7
NON-CURRENT LIABILITIES
Borrowings – related party4.20.70.9
Borrowings – external4.210.911.1
Lease liabilities5.817.4-
Deferred revenue5.90.24.5
Provisions0.60.5
Deferred tax liability6.25.81.0
Total non-current liabilities 35.618.0
Total liabilities 80.161.7
Net assets 163.5159.4
EQUITY
Contributed equity7.161.859.4
Retained earnings85.880.9
Foreign currency reserve2.63.2
Share-based payment reserve7. 52.12.8
Total equity attributable to owners of the parent152.3146.3
Non-controlling interests 11.213.1
Total equity 163.5159.4
For and on behalf of the Board who authorised these financial statements for issue on 27 February 2020.
Kirk Senior Chairman James Ogden Chair Audit and Risk Committee
The above statement should be read in conjunction with the accompanying notes.
Statement of financial position
As at 31 December 2019
05
Annual Financial Statements 2019
20192018
SECTIONNZ$mNZ$m
CASHFLOWS FROM OPERATING ACTIVITIES
Receipts from customers143.6 132.4
Interest received-0.1
Payments to suppliers(118.0)(96.0)
Taxes paid(9.1)(8.2)
Interest paid (1.0)(0.7)
Net cash inflow from operating activities4.115.5 27.6
CASHFLOWS FROM INVESTING ACTIVITIES
Purchase of property, plant and equipment5.2(4.1)(2.5)
Purchase of internally generated software and other intangibles5.6(12.6)(7.9)
Proceeds from disposal of intangibles-1.4
Related party loan advance – Numero5.3(0.7)(1.3)
Derecognition of Stardust cash balances5.3(1.5)-
Numero acquisition, net of cash acquired30.2 -
Vista China acquisition deposit5.1, 5.3(0.4)-
Vista China dividends received5.30.4 -
Vista China 2018 transaction proceeds -0.2
Net cash applied to investing activities (18.7)(10.1)
CASHFLOWS FROM FINANCING ACTIVITIES
Lease payments (principal elements)5.8(3.7)-
Loans and borrowings-0.2
Dividends paid to non-controlling interests(2.5)(0.6)
Dividends paid to the owners of the parent7. 3(5.5)(5.5)
Net cash applied to financing activities (11.7)(5.9)
Net (decrease)/increase in cash (14.9)11.6
Cash at beginning of year34.4 21.0
Foreign exchange differences -1.8
Cash at end of year 19.5 34.4
The above statement should be read in conjunction with the accompanying notes.
Statement of cashflows
For the year ended 31 December 2019
06
Vista Group International Limited
General information
The notes are consolidated into ten sections. Each section contains an introduction which is indicated by the symbol
above. The first section outlines general information about Vista Group International Limited (the Company and
its subsidiaries, collectively Vista Group) and guidance on how to navigate through this document.
Accounting policies
The principal accounting policies adopted in the preparation of these financial statements are set out throughout
the document where they are applicable. These policies have been consistently applied to all years presented,
unless otherwise stated. Accounting policies are identified by the symbol above.
Significant accounting judgements and sources of estimation uncertainty
Significant accounting judgements are those judgements that Vista Group makes when applying its accounting
policies that may have a significant effect on amounts that are recognised in these financial statements.
Significant sources of estimation uncertainty relate to assumptions and estimates made at the end of the current
reporting period that have a risk of resulting in a material adjustment to the carrying amounts of assets and
liabilities within the next financial year.
In applying its accounting policies, Vista Group continually evaluates judgements and estimates based on experience
and other factors, including expectations of future events that may have an impact on Vista Group. All judgements
and estimates made are believed to be reasonable based on the most current set of circumstances available to
Vista Group. Actual results may differ from the judgements and estimates applied.
Significant accounting judgements and estimates made by Vista Group in the preparation of these financial
statements are outlined within the following financial statement notes:
Section 3 Fair value of intangible assets acquired in a business combination
Section 5.3 Carrying value of investment in Vista China
Section 5.3 Initial fair value of joint venture companies
Section 5.5 Assumptions used in testing goodwill for impairment
Section 5.6 Capitalisation of development costs
Section 6.2 Recognition of deferred tax assets
The fair value measurement of equity-settled transactions with employees is no longer considered to be a significant
accounting judgement, as the risk of significant differences is considered remote.
The recoverability of the loan to Numero Limited (Numero) is no longer considered to be a source of estimation
uncertainty, because at 31 December 2019, Numero is now recognised as a subsidiary of Vista Group (see section 3)
with this loan eliminating on consolidation.
Notes to the financial statements
07
Annual Financial Statements 2019
Notes to the financial statements
Continued
1. General information
These financial statements are for Vista Group which is a company incorporated and domiciled in New Zealand,
and whose shares are publicly traded on the New Zealand Stock Exchange (NZX) and the Australian Securities
Exchange (ASX).
The Company is registered under the Companies Act 1993 and is an FMC reporting entity under Part 7 of the
Financial Markets Conduct Act 2013. The financial statements of Vista Group have been prepared in accordance
with the requirements of Part 7 of the Financial Markets Conduct Act 2013 and the NZX Main Board Listing Rules.
In accordance with the Financial Markets Conduct Act 2013, because financial statements are prepared and
presented for Vista Group, separate financial statements for the Company are not presented.
The principal activity of Vista Group is the sale, support and associated development of software for the film
industry. These financial statements were approved by the Board on 27 February 2020.
2. Financial performance
This section outlines further details of Vista Group’s financial performance by building on information presented
in the statement of comprehensive income.
2.1 Revenue
Vista Group recognises revenue when performance obligations have been settled. A performance obligation
is settled when the customer has received all the benefits associated with the performance obligation.
The following details revenue types recognised within each category:
Product
Product revenue comprises different items across each of Vista Group’s operating segments. Within the Cinema
segment, product revenue relates primarily to fees charged for perpetual software licenses. The exception is the
Veezi subscription-based software which is charged monthly.
Movio segment product revenue relates to annual access fees for cloud-hosted marketing and analytics platforms.
The Additional Group Companies segment recognises product revenue for perpetual and recurring licensing
(Maccs); and the website/marketing platform revenue (Powster).
Maintenance
Maintenance services are billed in advance for a fixed term. Revenue is recorded within deferred revenue on
the statement of financial position and recognised on a straight-line basis over the term of the contract billing
period, as services are provided. Maintenance revenue relates to fees charged for support services and upgrades
to software applications.
Service
Service revenue relates to fees charged for value-add services which are one-off charges. Revenue is recognised
when the service is complete or on a stage of completion basis.
Development
Development services are revenues associated with bespoke development effort as requested and paid for by
customers. This category includes revenue associated with development services to deliver the localisation of Vista
Group software under the reseller agreement with Vista China. This revenue is recognised on a stage of completion
basis as the performance obligations are delivered.
Hardware
Revenue from hardware is recognised at a point in time when delivery has been made.
Other revenue
Other revenue comprises revenue earned primarily from advertising and variable processing fees.
08
Vista Group International Limited
Notes to the financial statements
Continued
Process and policy
The tables below provide further information on the application of NZ IFRS 15 Revenue from Contracts with
Customers, across the most significant revenue streams of Vista Group.
Vista Cinema Segment
REVENUE TYPEDESCRIPTIONKEY JUDGEMENTSOUTCOME
TIMING OF REVENUE
RECOGNITION
Product
– Cinema
Non-recurring revenue
Perpetual ERP software
license targeted at larger
cinema circuits.
Determining the distinct
performance obligations
and whether items are
required to be bundled
to form a distinct
performance obligation.
Providing a software
license is a distinct
performance obligation
and is not required to
be bundled with other
performance obligations.
Point in time
Recognised at the
point in time when the
software goes live, which
is when the customer
can benefit from using
the software.
Product
– Veezi
Recurring revenue
Subscription-based
software targeted at small
and independent theatres.
Revenue includes a
fixed monthly fee plus
a variable component
based on the number
of tickets sold.
Determining whether
a sales-based license
of intellectual property
exists. Determining
whether there is a
sales-based variable
component.
The subscription to Veezi
is a sales-based license
of intellectual property.
There is a sales-based
variable component.
Point in time
Recognised at the end
of each month, once
the sales-based variable
usage is known.
Maintenance
– Cinema
Recurring revenue
Basic support and
any enhancements or
upgrades to the software.
No major judgement
required, other than
confirming the scope
and period of the
maintenance contract.
N /AOver time
Benefits are
simultaneously received
and consumed; revenue
is recognised over the
maintenance term.
Services &
Development
Non-recurring revenue
Value-add services,
implementation
services and bespoke
development of
the software.
Determining whether
the services and
development
provided are a distinct
performance obligation.
Services & development
are a distinct performance
obligation as they are
not highly dependent
or interrelated to other
performance obligations
in the contract.
Over time
Recognised when the
service/development is
complete or on a stage
of completion basis.
Movio Segment
REVENUE TYPEDESCRIPTIONKEY JUDGEMENTSOUTCOME
TIMING OF REVENUE
RECOGNITION
Product
– Cinema
Recurring revenue
Movio Cinema cloud-
hosted data, marketing
and analytics platform.
Customers are charged
an annual access fee to
platform plus a variable
component (see below).
Determining whether
the platform access is
a distinct performance
obligation.
Access to the platform
is a distinct performance
obligation and is not
required to be bundled
with other performance
obligations.
Over time
Platform access
is recognised over
time as benefits are
simultaneously received
and consumed.
Recurring revenue
Variable revenue based
on the number of active
members managed and
the number of promotional
messages sent during
a given period.
Determining if a
usage-based license
of intellectual
property exists.
The variable revenue
is a usage-based license
of intellectual property.
Point in time
Variable license revenue
is recognised at the end
of each month once
usage-based quantities
are known.
09
Annual Financial Statements 2019
Notes to the financial statements
Continued
REVENUE TYPEDESCRIPTIONKEY JUDGEMENTSOUTCOME
TIMING OF REVENUE
RECOGNITION
Product
– Media
Recurring revenue
Movio Media cloud-hosted
data, marketing and
analytics platform.
Determining whether
the platform access is
a distinct performance
obligation.
Access to the platform
is a distinct performance
obligation and is not
required to be bundled
with other performance
obligations.
Over time
Platform access
is recognised over
time as benefits are
simultaneously received
and consumed.
Non-recurring revenue
Targeted marketing
campaigns, digital
advertising and reports.
No major judgement
required.
N /APoint in time
Revenue is recognised
when the campaigns
and reports are
completed.
ServicesNon-recurring revenue
Value-add services, data
scientist services and
setup & configuration.
Determining whether the
services provided are
a distinct performance
obligation.
The services are
distinct performance
obligations as they are
not highly dependent
or interrelated to other
performance obligations
in the contract.
Over time
Recognised when the
service is complete
or on a stage of
completion basis.
Additional Group Companies Segment
REVENUE TYPEDESCRIPTIONKEY JUDGEMENTSOUTCOME
TIMING OF REVENUE
RECOGNITION
Product
– Showtimes
Platform
Recurring revenue
Website and marketing
platform for feature
films, incorporating
showtimes data.
Determining the distinct
performance obligations
and the requirements
to bundle performance
obligations.
Two distinct
performance obligations
exist; platform creation
and incorporating
showtimes data.
Point in time
Recognised at a point in
time when the platform
is live and subsequently
when the showtimes
data is incorporated.
Product
– Maccs
Non-recurring revenue
Perpetual theatrical
distribution software
for film distributors.
Determining the distinct
performance obligations
and whether they are
required to be bundled
as one performance
obligation.
Provision of the
software license is a
distinct performance
obligation but is required
to be bundled with
development where the
license is dependent
on the development.
Point in time
Recognised at a point in
time when the territory
is live on the software,
and the customer is
able to benefit from
the software license.
Maintenance
– Maccs
Recurring revenue
Basic support and
any enhancements or
upgrades of the software.
No major judgement
required, other than
confirming the scope
and period of the
maintenance contract.
N /AOver time
Benefits are
simultaneously received
and consumed; revenue
recognised over the
maintenance term.
Services &
Development
Non-recurring revenue
Value-add services,
implementation
services and bespoke
development of the
software.
Determining the distinct
performance obligation
and whether the
development is required
to be bundled to form
a distinct performance
obligation.
Where the services &
development are highly
interrelated to a license,
they are bundled with
the license as a single
performance obligation.
Otherwise, the services
and development are
a distinct performance
obligation.
Over time
Recognised
when the services
and development are
complete or on a stage
of completion basis.
Movio Segment – continued
10
Vista Group International Limited
Notes to the financial statements
Continued
20192018
NZ$m%NZ$m%
Product41.1 36.4
Maintenance47.1 43.3
Recurring revenue88.2 61%79.7 61%
Product30.2 26.4
Services14.9 12.7
Development5.4 8.2
Hardware5.5 3.2
Other0.3 0.5
Non-recurring revenue56.3 39%51.0 39%
Total revenue144.5 100%130.7 100%
Recurring and non-recurring revenues are non-GAAP financial measures that the Chief Operating Decision Maker
(CODM) uses to help evaluate the financial performance of Vista Group and its operating segments. Recurring
revenue is the portion of product and maintenance revenues that are expected to continue in the future. Unlike
non-recurring revenues, these revenues are predictable, stable and can be expected to occur at regular intervals
going forward with a relatively high degree of certainty.
No individual customer exceeded 10% of revenue in either the current or prior comparative year.
The timing of when recurring and non-recurring revenues are recognised in these financial statements is shown below:
20192018
RECURRING
REVENUE
NON-RECURRING
REVENUE
RECURRING
REVENUE
NON-RECURRING
REVENUE
NZ$mNZ$mNZ$mNZ$m
At a point in time17.5 36.7 16.0 30.5
Over time70.7 19.6 63.7 20.5
Total revenue88.2 56.3 79.7 51.0
2.2 Operating segments
Vista Group operates in the vertical cinema/film market via four reportable segments and a corporate segment.
The Chief Executive and the Board of Vista Group are collectively considered to be the CODM in terms of
NZ IFRS 8 Operating Segments. These segments have been defined based on the reports regularly reviewed
by the CODM to make strategic decisions.
Cinema segment
Software associated with cinema management via the Vista software suite of products, plus the cloud based
Veezi product for smaller scale cinemas.
Movio segment
Includes the Movio Cinema and Media products, both of which provide data analytics and campaign management.
Additional Group Companies segment (AGC)
An aggregation of Maccs, Powster, Flicks, plus the addition of Numero from 14 October 2019 (see section 3).
None of these businesses individually exceed the 10% threshold for segment revenue or profitability that would
require separate disclosure under NZ IFRS 8.
The Early Stage Investments segment (ESI)
An aggregation of MovieXchange, Share Dimension (Cinema Intelligence) and Stardust until 25 February 2019
(see section 5.3). Like the AGC segment, none of the businesses included in this segment individually exceed
the 10% threshold for segment revenue or profitability that would require separate disclosure under NZ IFRS 8.
Corporate segment
The shared services functions associated with Vista Group, being legal, finance, and senior management. Revenue
received from the associate company Vista China is recognised within this segment.
Full legal names of each entity can be obtained from section 8.3.
11
Annual Financial Statements 2019
Notes to the financial statements
Continued
2019
CINEMAMOVIOAGCESI
(1,2)
CORPORATETOTAL
NZ$mNZ$mNZ$mNZ$mNZ$mNZ$m
Timing of revenue recognition
At a point in time39.2 9.5 3.9 1.6 -54.2
Over time57.1 16.2 13.7 1.3 2.0 90.3
Total revenue96.3 25.7 17.6 2.9 2.0 144.5
Revenue growth
(5)
17%13%17%-36%-66%11%
Operating segment performance
Recurring revenue50.0 19.8 14.0 2.4 2.0 88.2
Non-recurring revenue46.3 5.9 3.6 0.5 -56.3
Total revenue96.3 25.7 17.6 2.9 2.0 144.5
Operating expenses(47.7)(10.6)(7.5)(2.2)(0.2)(68.2)
Sales, marketing and admin expenses(18.0)(8.4)(6.5)(2.0)(10.4)(45.3)
Foreign currency gains/(losses)0.3 0.1 (0.3)--0.1
EBITDA
(3)
30.9 6.8 3.3 (1.3)(8.6)31.1
EBITDA margin
(5)
32%26%19%22%
2018
CINEMAMOVIOAGCESICORPORATETOTAL
NZ$mNZ$mNZ$mNZ$mNZ$mNZ$m
Timing of revenue recognition
At a point in time31.79.31.83.7-46.5
Over time50.813.513.20.85.984.2
Total revenue82.5 22.8 15.0 4.5 5.9 130.7
Revenue growth
(5)
22%47%22%286%-41%23%
Operating segment performance
Recurring revenue43.717.812.53.62.179.7
Non-recurring revenue38.85.02.50.93.851.0
Total revenue82.5 22.8 15.0 4.5 5.9 130.7
Operating expenses(40.7)(9.7)(7.3)(2.0)(0.2)(59.9)
Sales, marketing and admin expenses(17.8)(7.0)(6.4)(2.1)(9.3)(42.6)
Foreign currency gains/(losses)1.60.10.1-(0.8)1.0
EBITDA (as previously reported)
(6)
25.66.21.40.4(4.4)29.2
Impact of NZ IFRS 16
(6)
2.70.20.7--3.6
EBITDA (adjusted for NZ IFRS 16)
(6)
28.36.42.10.4(4.4)32.8
EBITDA margin (adjusted for NZ IFRS 16)
(5,6)
34%28%14%9%25%
To assist the readers’ understanding of these financial statements, the revenues of each segment have been split
to show both recurring and non-recurring revenues.
Movio derives $0.7m inter-segment revenues from the Cinema segment (2018: $0.5m) and $0.2m from Numero
since its inclusion in the AGC segment. These revenues are not included in the above tables as they eliminate
on consolidation.
12
Vista Group International Limited
Notes to the financial statements
Continued
Reconciliation of EBITDA
(3)
to profit before tax
20192018
NZ$mNZ$m
EBITDA
(3)
31.1 29.2
Depreciation and amortisation(9.7)(4.2)
EBIT
(4)
21.4 25.0
Finance income 0.6 0.3
Finance costs (1.7)(1.0)
Acquisition expenses(0.1)(0.3)
Share of loss from associates and joint ventures(2.2)(3.0)
Capital gains and losses0.4 -
Profit before tax 18.4 21.0
(1) Includes results of Numero from 14 October 2019, the date control was obtained through the step acquisition (see section 3).
(2) Includes results of Stardust until 25 February 2019, at which date the entity no longer meets the requirements for control (see section 5.3).
(3) EBITDA is a non-GAAP measure and is defined as earnings before net finance costs, income tax, depreciation and amortisation, acquisition
expenses, capital gains/losses, impairment losses and equity accounted results from associates and joint venture companies.
(4) EBIT is a non-GAAP measure and is defined as earnings before net finance costs, income tax, acquisition expenses, capital gains/losses,
impairment losses and equity accounted results from associate and joint venture companies.
(5) Revenue growth and EBITDA margin are non-GAAP measures which the CODM regularly reviews. EBITDA margin is calculated as EBITDA
over total revenue.
(6) On first-time implementation of NZ IFRS 16 Leases, Vista Group elected to not restate the comparative year values. To assist the readers’
understanding of the year on year EBITDA trading growth, the prior year segment disclosures have been reported showing both the values
reported in the prior year financial statements (‘as previously reported’) and to show the EBITDA as if NZ IFRS 16 had also been adopted
in the prior year (‘adjusted for NZ IFRS 16’). See section 8.4 for more details on first time adoption of NZ IFRS 16.
Revenue by domicile of entity
Vista Group recognises revenue within entities across several jurisdictions. Revenue is allocated to geographical
regions based on where the sale is recorded by each operating entity within Vista Group. Independent resellers
are used to promote Vista Group’s products in multiple jurisdictions. The revenues recognised via these
independent resellers are not allocated geographically, rather they are shown within the New Zealand and
United Kingdom jurisdictions based on the location of the transacting Vista Group entity.
The Other category in the tables below include entities in the Netherlands, Germany, Malaysia, Romania and
South Africa.
20192018
NZ$mNZ$m
New Zealand 28.9 34.3
United States 54.5 45.6
United Kingdom 34.4 27.7
Mexico 15.7 15.7
Other 11.0 7.4
Total revenue 144.5 130.7
13
Annual Financial Statements 2019
Notes to the financial statements
Continued
Non-current assets by domicile of entity
Non-current operating assets by location of the reporting entity are presented in the following table.
2019
RESTATED
2018
NZ$mNZ$m
New Zealand 55.7 41.6
United States 25.7 8.5
United Kingdom 12.5 8.8
Mexico 11.7 11.4
Other 20.8 19.5
As required by NZ IFRS 8, the table above excludes deferred tax assets (the comparatives have been restated
accordingly). Investment in associates are excluded from the non-current assets balance presented.
2.3 Expenses
Government grants
Government grants are recognised where there is reasonable assurance that the grant will be received, and all
attached conditions will be complied with. Government grants are recognised within the statement of comprehensive
income as an offset to operating expenses.
During the year, Vista Group recognised a total of $4.2m (2018: $3.2m) of grants from Callaghan Innovation in
New Zealand and Ministry of Economic Affairs (WBSO) in Netherlands to assist with research and development.
At balance date, there is a 10% retention amount related to 2019 grants of $0.4m (2018: $0.3m) yet to be paid
and subject to independent auditor review.
Auditor’s remuneration included in administration expenses
20192018
NZ$mNZ$m
Audit of financial statements
Audit and review of financial statements – PwC0.50.4
Audit of subsidiary financial statements – Scrutton Bland-0.1
Total audit fees0.5 0.5
Vista Group engaged PwC to perform non-audit services relating to assurance services (review of R&D growth grants
schedule $15k (2018: $15k)), advisory services relating to long-term employee incentive schemes $7k (2018: $24k)
and the preparation of an immaterial subsidiary’s financial statements $12k (2018: $nil). The cumulative cost for these
engagements was less than $0.1m (2018: less than $0.1m).
Capital gains and losses
20192018
SECTIONNZ$mNZ$m
Capital gain – derecognition of Stardust5.30.1-
Capital gain – step acquisition of Numero30.3-
Total capital gains and losses0.4-
14
Vista Group International Limited
Notes to the financial statements
Continued
Other expenses
Sales and marketing expenses are those costs incurred by Vista Group in directly selling or marketing its products,
along with the associated personnel costs.
Operating expenses include those costs incurred by Vista Group in running its business operations. Such costs
include hosting, research, maintenance, development and the associated personnel costs. Vista Group has expensed
$25.4m of aggregated software related research and development expenditure (2018: $22.4m) within this operating
expense line.
Administration expenses include the overhead costs incurred by Vista Group that are not directly associated with
sales, marketing or costs incurred in running its business operations.
20192018
SECTIONNZ$mNZ$m
Included in administration expenses:
Depreciation of property, plant & equipment5.22.11.7
Depreciation of lease assets5.83.9-
Amortisation of intangible assets5.63.72.5
3. Business combinations
This section outlines how Vista Group has accounted for transactions when acquiring its associated company
(Numero) and the disposal of an existing subsidiary (Stardust). The were no business combinations that
completed in 2018.
Business combinations
The acquisition method of accounting is used to account for all business combinations, regardless of whether
equity instruments or other assets are acquired. The consideration transferred for the acquisition of a subsidiary
comprises cash and the fair value of any asset or liability resulting from a contingent consideration arrangement.
Identifiable assets acquired as well as any liabilities and contingent liabilities assumed in a business combination
are, with limited exceptions, measured initially at their fair values at the acquisition date. Vista Group recognises
any non-controlling interest in the acquired entity on an acquisition-by-acquisition basis either at fair value or
at the non-controlling interest’s proportionate share of the acquired entity’s net identifiable assets.
Acquisition-related costs are expensed as incurred.
Goodwill represents the excess of purchase considerations over the fair value of net assets acquired in a business
combination. Goodwill is allocated to cash generating units (CGUs), which are the lowest level of assets for which
separately identifiable cash flows can be attributed. See section 5.4 for more detail on the components of goodwill
recognised. Where settlement of any part of cash consideration is deferred, the amounts payable in the future are
discounted to their present value at the date of exchange. The discount rate applied is the entity’s incremental
borrowing rate (being the rate at which a similar borrowing could be obtained from an independent financier
under comparable terms and conditions).
Contingent consideration is classified either as equity or a financial liability. Amounts classified as a financial liability
are subsequently remeasured to fair value with changes recognised in the statement of comprehensive income.
If a business combination is achieved in stages, the acquisition date carrying value of the acquirer’s previously held
equity interest in the acquiree is remeasured to fair value at the acquisition date. Any gains or losses arising from
such remeasurement are recognised in the statement of comprehensive income.
15
Annual Financial Statements 2019
Notes to the financial statements
Continued
Significant accounting judgement – Fair value of intangible assets acquired
in a business combination
The fair value of the acquired intangible assets of Numero are to be performed by external valuation experts
as these fair values are likely to be significant. Due to this acquisition only completing late in 2019, the valuation
of the acquired intangible assets has yet to be finalised and therefore the acquired net assets have been reported
on a provisional basis.
Numero step acquisition
On 14 October 2019, Vista Group announced it had acquired the remaining 50% stake in Numero. This transaction
results in Vista Group obtaining control of Numero and therefore has been consolidated into Vista Group’s results
from the date of the transaction.
Numero provides an aggregated Box Office reporting platform that delivers the film industry and media clean,
fast and effective Box Office information. Management consider this consolidation transaction to be a natural
progression due to the similarity of its business model to that of the rest of Vista Group.
The share purchase agreement includes contingent consideration with components payable in cash of $0.1m and
up to 20,000 Vista Group shares. The contingent consideration is payable once certain 2020 and 2021 EBITDA and
revenue performance targets are achieved. Vista Group determined the fair value of the shares contingent on these
performance targets was $nil, as they are not considered likely to be earned.
Due to the recency of the Numero transaction, the fair value of net assets acquired are provisional. In accordance
with NZ IFRS 3 Business Combinations, these fair values will be finalised and adjusted within 12 months of completing
the transaction.
The provisional goodwill currently includes the customer contracts and IP, which are still being measured by
an external valuation expert. Provisional goodwill, after removing the acquired intangibles, will be attributable
to future growth in Numero obtained from future operating synergies and the ability to leverage Vista Group’s
existing infrastructure and customer network. Lastly, the provisional goodwill will include a portion relating to
the assembled workforce, which do not meet the NZ IAS 38 Intangible Assets criteria of intangible assets.
While the total receivables on the date of acquisition were $9.1 million, Vista Group concluded the previously
recognised provision for impairment of $3.6 million at 30 June 2019 remained appropriate, meaning the fair value
of the receivables were $5.5 million. This fair value is confirmed using a 5-year Discounted Cash Flow (DCF) of
Numero’s future cash flows, which is a level 3 fair value measurement technique as per the fair value hierarchy
set out in section 10.2. As this step acquisition resulted in a change in control, a non-taxable capital gain of
$0.3m was recognised, calculated as follows:
2019
NZ$m
Fair value of the 50.0% of Numero acquired by Vista Group0.3
Less: equity accounted carrying value of Numero -
Capital gain on step acquisition of Numero 0.3
16
Vista Group International Limited
Notes to the financial statements
Continued
Business combinations completed during the year
NUMERO
NZ$m
Fair value of net liabilities acquired
Cash 0.3
Trade and other receivables 0.4
Trade and other payables (0.7)
Deferred revenue (0.1)
Lease assets 0.1
Lease liabilities – current (0.1)
Net liabilities acquired (0.1)
Provisional goodwill 6.1
Total consideration 6.0
Consideration is satisfied by:
Cash consideration 0.1
Cash contingent consideration 0.1
Derecognition of receivables owed to Vista Group 5.5
Fair value of previously held equity interest 0.3
Total consideration 6.0
Net cash outflow arising on acquisition
Cash consideration (0.1)
Cash acquired 0.3
Net cash inflow 0.2
Contribution to Vista Group since control was obtained
Revenue 0.6
EBITDA (0.1)
Results of the acquired subsidiary for the year ended 31 December 2019
Revenue
2.2
EBITDA (0.3)
None of Vista Group’s acquisitions have goodwill that is deductible for taxation purposes.
17
Annual Financial Statements 2019
Notes to the financial statements
Continued
4. Cash flows and borrowings
This section builds on information from the statement of cashflows. Cash comprises cash at bank and on hand.
4.1 Reconciliation of net profit to operating cash flows
20192018
SECTIONNZ$mNZ$m
Profit for the year12.8 13.0
Non-cash items:
Amortisation 5.63.7 2.5
Depreciation5.2, 5.86.0 1.7
Share-based payment expense7. 51.7 2.5
Non-cash finance charges0.7 0.3
Acquisition expenses0.1 1.0
Capital gains and losses2.3(0.4)-
Share of loss from investment in associates and joint ventures5.32.2 1.8
Deferred tax-1.0
Foreign exchange movements(0.2)(0.5)
Expected credit loss expense5.1(0.7)(0.5)
Net non-cash items 13.1 9.8
Movements in working capital:
(Decrease)/increase in related party trade and other payables(4.7)1.6
Decrease in related party trade and other receivables, net of deferred revenue6.05.9
Increase in trade and other payables0.62.5
Increase in trade and other receivables, net of deferred revenue(8.8)(5.0)
Decrease in taxation receivable and payable(3.5)(0.2)
Net change in working capital (10.4)4.8
Net cash inflow from operating activities 15.5 27.6
4.2 Borrowings
Borrowings are initially recognised at fair value less directly attributable transaction costs and subsequently
measured at amortised cost using the effective interest method. Borrowing costs are expensed as incurred.
20192018
NZ$mNZ$m
Borrowings – related party0.9 0.9
Borrowings – external10.9 11.1
Total borrowings11.8 12.0
Current0.2 -
Non-current11.6 12.0
Total borrowings11.8 12.0
18
Vista Group International Limited
Notes to the financial statements
Continued
The table below details the movement in borrowings during the year:
20192018
NZ$mNZ$m
Borrowings – related party:
Opening0.9 0.6
Additional borrowing – Maccs minority shareholders-0.2
Movement in foreign exchange-0.1
Balance at 31 December0.9 0.9
Borrowings – external:
Opening11.1 10.7
Movement in foreign exchange(0.2)0.4
Balance at 31 December10.9 11.1
A schedule of all debt facilities is shown below:
INTEREST RATEDEBT DRAWN (NZ$m)
FACILITY PROVIDERREASON FOR LOANEXPIRY DATE20192018 LIMIT (m)20192018
ASB – term loan Maccs acquisitionJan 20232.50%2.97%€3.0 5.05.1
ASB – term loanVista Latam acquisitionJan 20234.27%5.59%US$4.05.96.0
ASB – revolving creditFuture acquisitions/
SaaS project
Jan 2023
3.81%n/aNZ$41.0--
ASB – overdraftWorking capitalJan 20236.08%6.12%NZ$2.0--
Total borrowings – externalNZ$54.010.911.1
Maccs Working capitalApr 20205.00%5.00%€0.10.20.2
Share Dimension Working capitalJul 20225.00%5.00%€0.40.70.7
Total borrowings – related party0.50.90.9
On 31 January 2020, Vista Group entered into a refinancing arrangement with ASB to assist in funding the SaaS
transformation project, the 2020 Vista China step acquisition and any future acquisition related opportunities.
All ASB facilities are secured by a general security agreement under which the bank has a security interest
in all Vista Group’s tangible assets. Agreed covenants include:
• EBITDA of the charging group not being less than 80% of Vista Group;
• Gearing ratio of not greater than 2.5 times; and
• Interest cover of equal or greater than 3.0 times.
Vista Group has been compliant with all covenants for both the current and prior reporting periods.
Related party borrowings include loans from minority shareholders for Maccs and Share Dimension.
19
Annual Financial Statements 2019
Notes to the financial statements
Continued
5. Assets and liabilities
This section outlines further details of Vista Group’s financial performance by building on information presented
in the statement of financial position.
5.1 Trade and other receivables
Trade and other receivables at 31 December were as follows:
20192018
SECTIONNZ$mNZ$m
Trade receivables 35.4 44.3
Sundry receivables 3.8 3.9
Accrued revenue 13.2 4.9
Prepayments 3.4 2.9
Vista China acquisition deposit5.30.4-
Related party loan – Numero-5.4
Total trade and other receivables 56.2 61.4
The prior year related party loan to Numero was presented net of a provision for impairment of $3.0m. An additional
provision for impairment of $0.6m was recognised in 2019 prior to Vista Group obtaining control of Numero.
Subsequent to this date, both the related party loan and impairment provision eliminate on consolidation.
See section 3 for further details of the Numero step acquisition.
Included within trade receivables is a receivable from Vista China of $0.9m (2018: $6.8m), see section 5.3 for
further details.
Accrued revenues are recognised with regard to customer contracts where Vista Group’s performance obligations
have been fully satisfied, but billing is not contractually due until a subsequent date.
Included within trade and other receivables is a $0.4m (RMB2.0m) deposit paid to WePiao as part of the proposed
Vista China step acquisition (see section 5.3 for further details).
The following table summarises the impact of the expected credit loss provision on the trade receivables balance.
See section 10.2 for further details on the accounting policies that impact trade receivables:
20192018
NZ$mNZ$m
Trade receivables – gross 36.6 46.2
Expected credit loss – general provision (0.4)(1.1)
Expected credit loss – specific provision (0.8)(0.8)
Trade receivables – net of provisions 35.4 44.3
The movement in the expected credit loss provision during the year was as follows:
20192018
NZ$mNZ$m
Balance at 1 January 1.91.0
Bad debts written off (1.4) (0.2)
Change in provision 0.71.1
Expected credit loss provision at 31 December 1.21.9
20
Vista Group International Limited
Notes to the financial statements
Continued
The expected credit loss provision for trade receivables has been measured using the same techniques as the prior
year, determined as follows:
31 DECEMBER 2019
CURRENT
91-180 DAYS
PAST DUE
181-270 DAYS
PAST DUE
271-360 DAYS
PAST DUE
361+ DAYS
PAST DUETOTAL
NZ$mNZ$mNZ$mNZ$mNZ$mNZ$m
Gross carrying amount28.73.82.60.80.736.6
Baseline0.1-0.1--0.2
Aging and write offs----0.10.1
Country, customer and market 0.1----0.1
General provision0.2-0.1-0.10.4
Specific provision--0.10.30.40.8
0
Total ECL provision0.2-0.20.30.51.2
General provision effective rate0.7%-3.8%-14.3%1.1%
0
31 DECEMBER 2018
CURRENT
91-180 DAYS
PAST DUE
181-270 DAYS
PAST DUE
271-360 DAYS
PAST DUE
361+ DAYS
PAST DUETOTAL
NZ$mNZ$mNZ$mNZ$mNZ$mNZ$m
Gross carrying amount32.33.82.10.57. 546.2
Baseline0.1-0.1-0.40.6
Aging and write offs----0.40.4
Country, customer and market ----0.10.1
General provision0.1-0.1-0.91.1
Specific provision0.3-0.1-0.40.8
Total ECL provision0.4-0.2-1.31.9
General provision effective rate0.3%-4.8%-12.0%2.4%
0
The movement in accrued revenues during the year was as follows:
20192018
NZ$mNZ$m
Accrued revenues at 1 January 4.96.2
Amounts included in opening balance released in the current year (4.9)(5.9)
Additional accrued revenue recognised at year end 13.14.4
Exchange movements0.10.2
Accrued revenue at 31 December 13.24.9
5.2 Property, plant and equipment
Property, plant and equipment are measured at cost less accumulated depreciation and impairment losses.
Cost includes expenditure that is directly attributable to the acquisition of the asset.
Depreciation on assets is charged on a straight-line basis to allocate the differences between their original cost
and the residual values over their estimated useful lives, as follows:
• Fixtures and fittings 7 to 10 years, or the term of any associated property lease
• Computer equipment 3 to 5 years
The residual values and useful lives of assets are reviewed and adjusted if appropriate. If an asset’s carrying
amount is greater than its estimated recoverable amount, the carrying amount is immediately written down
to its recoverable amount.
21
Annual Financial Statements 2019
Notes to the financial statements
Continued
The carrying amount of property, plant and equipment is represented as follows:
2019
FIXTURES &
FITTINGS
COMPUTER
EQUIPMENTTOTAL
NZ$mNZ$mNZ$m
Gross carrying amount
Balance at 1 January 5.8 4.9 10.7
Additions2.8 1.3 4.1
Disposals(0.3)(2.5)(2.8)
Exchange differences(0.4)(0.2)(0.6)
Balance at year end7.9 3.5 11.4
Accumulated depreciation
Balance at 1 January (2.1)(3.2)(5.3)
Current year depreciation(0.9)(1.2)(2.1)
Disposals0.3 2.5 2.8
Exchange differences0.4 0.1 0.5
Balance at year end(2.3)(1.8)(4.1)
Carrying amount at 31 December 20195.6 1.7 7.3
2018
FIXTURES &
FITTINGS
COMPUTER
EQUIPMENTTOTAL
NZ$mNZ$mNZ$m
Gross carrying amount
Balance at 1 January 4.6 3.5 8.1
Additions1.2 1.3 2.5
Exchange differences-0.1 0.1
Balance at year end5.8 4.9 10.7
Accumulated depreciation
Balance at 1 January (1.4)(2.1)(3.5)
Current year depreciation(0.6)(1.1)(1.7)
Exchange differences(0.1)-(0.1)
Balance at year end(2.1)(3.2)(5.3)
Carrying amount at 31 December 20183.7 1.7 5.4
5.3 Investment in associates and joint ventures
Associates are all entities over which the Vista Group has significant influence but not control or joint control.
This is generally the case where Vista Group holds between 20% and 50% of the voting rights.
Joint ventures are all entities over which Vista Group has a joint arrangement where two or more of the parties
have joint control of the arrangement and have rights to the net assets of the arrangement.
Investments in both associates and joint ventures are accounted for using the equity method of accounting,
after initially being recognised at cost.
In the event of loss of control of a subsidiary, resulting in an associate company, the investment is recognised
initially at fair value. The carrying amount of the investment in an associate is increased or decreased to recognise
Vista Group’s share of the profit or loss and other comprehensive income of the associate after the acquisition
date. Dividends received or receivable from associates and joint ventures are recognised as a reduction in the
carrying amount of the investment.
When Vista Group’s share of losses in an equity-accounted investment equals or exceeds its interest in the entity,
including any other unsecured long-term receivables, Vista Group does not recognise further losses, unless it has
incurred obligations or made payments on behalf of the other entity. The carrying amount of equity-accounted
investments are tested for impairment in accordance with the policy described in section 5.5.
22
Vista Group International Limited
Notes to the financial statements
Continued
The financial statements of associates and joint ventures are prepared for the same reporting period as Vista
Group. When necessary, adjustments are made to bring the accounting policies in line with those of Vista Group.
Holdings in associates and joint ventures
The principal associates and joint ventures all have share capital consisting solely of ordinary shares. None of these
entities are considered strategic to Vista Group’s core operations.
NAME OF ENTITY
ASSOCIATE OR
JOINT VENTURE
COUNTRY OF
INCORPORATION
PRINCIPAL PLACE
OF BUSINESS
HOLDING PERCENTAGE
20192018
Vista Entertainment Solutions
(Shanghai) LimitedAssociateChinaChina
47.5%47.5%
Stardust Solutions Limited Joint VentureNew ZealandUSA55.9%58.9%
At 31 December 2018, Vista Group recognised its 50.0% stake in Numero as an associated company.
Significant estimation uncertainty – Carrying value of investment in Vista China
An independent valuation of Vista China at 31 December 2019 has been prepared by an external valuation expert
using a combined DCF and capitalisation of revenue method to ensure Vista China’s carrying value does not exceed
its recoverable amount. The external valuation expert also considered the implied $106.4m (RMB500.0m) equity
valuation from the proposed transaction between Vista Group and WePiao (more detail provided below in this
section). This combined approach represents a fair value less costs to dispose (FVLCD) methodology.
The key inputs applied by the external valuation expert into the valuation models were:
• Discount rate: a range of 20-25% (2018: 20-25%), based on authoritative studies into the rates of return required
by venture capital firms of China-based companies.
• Revenue multiple range of 4.00x to 5.00x (2018: 4.25x to 5.25x), based on a study of 83 listed ‘Application
Software’ companies in China, adjusted for outliers (below 20th percentile, or above 80th percentile).
Judgement was applied by management in estimating the 5-year operating performance of Vista China upon
which this valuation was based, which forecasts Vista China revenues to grow at a CAGR of 11.8% from 2019 to
2024. The values applied by management were cross-checked by the external valuation expert to other externally
published sources, with the associated risks being reflected in their adopted discount rate range.
When completing the FVLCD calculation, a 10% control discount and an assumed 2% transaction cost were applied.
The result of this external valuation was that Vista Group’s equity accounted carrying value of Vista China did not
exceed the recoverable amount.
Proposed Vista China step acquisition
On 20 December 2019, Vista Group announced that it had agreed to acquire a further 14.5% stake in Vista China.
The initial cash consideration will include cash payments of RMB26.3m and US$5.2m. Further cash of RMB10.0m
will be payable 12 months after completion. The acquisition implies an equity valuation of Vista China of $106.4m
(RMB500.0m). Consideration for this transaction is to be funded through a combination of existing cash resources
and an enhanced ASB revolving credit facility.
At 31 December 2019, this step acquisition was subject to approval from the relevant Chinese regulatory authorities
which is expected to be obtained during the first half of 2020.
Management consider China to be a very good long-term market prospect for Vista Group with 12 of the world’s
top 20 cinema exhibitor chains operating in the Chinese market; continued strong box office growth; and cinemas
being built at such a rate that by 2021, China is expected to have almost double the number of US cinema screens.
This step acquisition will enable Vista Group to have greater control over the strategic direction of Vista China
and to take advantage of the opportunities that arise in that market.
Vista Group have paid a deposit of NZ$0.4m (RMB2.0m) to WePiao, which is included within trade and other
receivables (see section 5.1) at 31 December 2019. This deposit is fully refundable should an adverse ruling be obtained
from the regulators. Should the acquisition complete, the consideration payable will be reduced by this deposit.
23
Annual Financial Statements 2019
Notes to the financial statements
Continued
Significant Accounting judgement – Initial fair value of joint venture companies (Stardust)
On 25 February 2019, Vista Group entered into agreements that resulted in Stardust no longer meeting the
requirements for control under NZ IFRS 10 Consolidated Financial Statements. Under the terms of the amended
shareholders’ agreement, Vista Group no longer has an entitlement to appoint a majority of the Directors, nor
to solely appoint the CEO. Holding two of the four Board seats enables Vista Group to exercise joint control over
Stardust and therefore classifies this entity as a joint venture. Vista Group ceased to consolidate Stardust as of
25 February 2019 with its shareholding remaining unchanged at 58.9%.
On 25 February 2019, the carrying value of Stardust’s net assets were $3.2m, of which $1.5m consisted of cash
at bank. The fair value of the retained 58.9% shareholding in Stardust required judgement with the intellectual
property being calculated using a ‘cost to replace’ valuation model (a level 3 fair value measurement technique).
Vista Group recognised a $0.1m gain on deconsolidation, calculated as follows:
2019
NZ$m
Fair value of the 58.9% of Stardust retained by Vista Group2.0
Less: carrying value of net assets of Stardust (3.2)
Add: carrying value of non-controlling interests1.3
Capital gain on deconsolidation of Stardust 0.1
Income tax expense-
Capital gain on deconsolidation of Stardust 0.1
Numero step acquisition
On 14 October 2019, Vista Group obtained control of Numero by acquiring a further 50% shareholding, taking Vista
Group’s holding to 100%. From the date of acquisition, Numero is no longer accounted for as an associated entity
and is instead fully consolidated into Vista Group’s results. For more information on this transaction, see section 3.
Carrying value of associates and joint ventures
STARDUSTVISTA CHINA
2019201820192018
NZ$mNZ$mNZ$mNZ$m
Opening net assets --24.6 28.7
Net assets of Stardust at 25 Feb 20193.2 ---
Loss for the year (0.9)-(2.3)(4.1)
Dividends declared --(1.5)-
Closing net assets 2.3 -20.8 24.6
Vista Group interest55.9%-47.5%47.5%
Vista Group’s share 1.3 -9.9 11.7
Goodwill 0.2 -20.2 20.2
Carrying values 1.5 -30.1 31.9
On 24 November 2019, Stardust raised an additional $0.4m of cash funding from two of the existing shareholders,
both of whom are related parties of Vista Group. The transaction was completed at fair value using a valuation of
US$32.31 per share and dilutes Vista Group’s ownership stake from 58.9% to 55.9%.
The carrying value of Vista Group’s share of Numero on the date control of the entity was obtained was $nil
(31 December 2018: $nil).
24
Vista Group International Limited
Notes to the financial statements
Continued
Summarised financial position
A summarised statement of financial position of Vista Group’s material associates and joint ventures at 31 December
2019 is presented below:
VISTA CHINA
20192018
NZ$mNZ$m
Cash12.6 26.4
Trade and other receivables14.4 11.6
Total current assets27.0 38.0
Total non-current assets3.0 1.3
Total assets30.0 39.3
Total current liabilities(7.9)(13.2)
Total non-current liabilities--
Total liabilities(7.9)(13.2)
Effect of translation(1.3)(1.5)
Net assets20.8 24.6
Summarised trading results
A summarised statement of comprehensive income of Vista Group’s material associates and joint ventures, and
a reconciliation to the equity accounted losses recognised in Vista Group is detailed below. Unless stated otherwise,
all profits/losses are derived from continuing operations and there was no movement in other comprehensive income.
Adjustments have been applied to align the associate and joint venture company accounting policies to those of
Vista Group.
VISTA CHINA
20192018
NZ$mNZ$m
Revenue 19.2 20.6
Total expenses(21.5)(24.7)
Loss for the year (2.3)(4.1)
Vista Group equity accounted interest – through August 2018-39.5%
Vista Group equity accounted interest – through December 201947.5%47.5%
Vista Group equity accounted loss for the year(1.0)(1.8)
Related parties
Vista Group’s associate and joint venture related party balances are detailed in the table below:
NUMERO
(1)
VISTA CHINASTARDUST
(1)
201920182019201820192018
NZ$mNZ$mNZ$mNZ$mNZ$mNZ$m
Related party receivable--0.9 6.8 0.1 -
Related party payable--(0.1)(4.8)(0.4)-
Related party loan-8.4 ----
Provision for impairment-(3.0)----
Net receivable/(payable)-5.4 0.8 2.0 (0.3)-
(1) Numero has been classified as a subsidiary of Vista Group from 14 October 2019, while Stardust was classified as a subsidiary until
25 February 2019. The tables above reflect the transactions that occurred while these entities were not classified as a subsidiary.
25
Annual Financial Statements 2019
Notes to the financial statements
Continued
Vista Group’s associate and joint venture related party transactions were as follows:
NUMERO
(1)
VISTA CHINASTARDUST
(1)
201920182019201820192018
NZ$mNZ$mNZ$mNZ$mNZ$mNZ$m
Development fees0.3 0.5 -(3.8)--
Vista China acquisition deposit--0.4 ---
Maintenance, licence, service fees0.2 0.4 (0.8)(2.2)--
Interest on loan0.2 0.3 ----
Dividend to Vista Group
(2)
--(0.7)---
Other advances-0.1 0.3 -(0.1)-
Total related party transactions0.7 1.3 (0.8)(6.0)(0.1)-
(1) Numero has been classified as a subsidiary of Vista Group from 14 October 2019, while Stardust was classified as a subsidiary until
25 February 2019. The tables above reflect the transactions that occurred while these entities were not classified as a subsidiary.
(2) Of the $0.7m dividend received from Vista China, $0.4m had been received in cash by 31 December 2019. The remaining balance will
reduce the consideration payable on the proposed Vista China acquisition.
During the period, Vista Group recognised $2.0m of revenue from Vista China (2018: $5.9m). At the end of the
period, $nil remains as deferred revenue (2018: $1.5m).
On 30 January 2019, Vista China provided a retention accommodation loan of $4.3m (RMB20.0m) to the CEO
of Vista China. This loan is interest free, secured against equity in Vista China and matures on 30 January 2022.
As part of the step acquisition of Vista China, on 23 December 2019 Vista China provided a shareholder loan of
$3.0m (RMB14.3m) to WePiao. This loan is expected to be repaid with proceeds from the proposed transaction,
which is awaiting regulatory approval.
5.4 Goodwill
The amount of goodwill initially recognised is a function of the allocated purchase price to the fair value of the
identifiable net assets acquired. The determination of the net assets fair value, particularly intangible assets,
is to a considerable extent based on judgement.
A summary of movements in goodwill is detailed below:
20192018
SECTIONNZ$mNZ$m
Gross carrying amount
Balance at 1 January 67.5 66.4
Additions – Numero36.1 -
Exchange differences (0.1)1.1
Gross carrying amount at year end 73.5 67.5
Accumulated impairment
Balance at 1 January (3.6)(3.6)
Accumulated impairment at year end (3.6)(3.6)
Goodwill at 31 December 69.9 63.9
26
Vista Group International Limited
Notes to the financial statements
Continued
Goodwill has been allocated to the following CGUs:
20192018
SECTIONNZ$mNZ$m
Vista Entertainment Solutions Limited (VESL) 24.4 24.4
Virtual Concepts Limited (Movio) 17.0 17.0
Maccs International BV (Maccs) 12.3 12.5
Share Dimension BV (Cinema Intelligence) 1.9 2.0
Powster Limited (Powster) 7.6 7.4
Flicks.co.nz Limited (Flicks) 0.6 0.6
Numero Limited (Numero)36.1 -
Goodwill at 31 December 69.9 63.9
The above CGUs are the lowest level at which goodwill is monitored for internal management reporting purposes.
Value in use (VIU) calculations are used in determining the recoverable amount of each CGU. Cash flows were
projected based on a 5-year business model for each CGU, including Board approved 2020 budgets. Determination
of appropriate post-tax cash flows, terminal growth rates and discount rates for the calculation of VIU is subjective and
requires significant judgement to determine the growth in revenue and EBITDA, timing and quantum of future capital
expenditure, working capital, long-term growth rates and the selection of discount rates to reflect the risks involved.
5.5 Impairment testing
Impairment testing of goodwill and other assets
Goodwill is not amortised and is tested for impairment annually irrespective of whether there is any indication of
impairment. If any such indication exists, then the asset’s recoverable amount is estimated. After initial recognition,
goodwill is measured at cost less any accumulated impairment losses.
Other assets are tested for impairment whenever events or changes in circumstances indicate that the carrying
amount may not be recoverable.
An impairment loss is recognised if the carrying amount of an asset exceeds its recoverable amount. Impairment
losses are recognised in the statement of comprehensive income.
The recoverable amount of an asset is the greater of its VIU and its FVLCD, however in line with NZ IAS 36
Impairment of Assets, FVLCD is only determined where VIU would result in an impairment. For the purposes of
assessing impairment, assets are grouped at the lowest levels for which there are separately identifiable cash inflows
which are largely independent of the cash inflows from other assets or groups of assets (CGUs). The allocation
is made to those CGUs that are expected to benefit from the business combination in which goodwill arose.
In assessing VIU, the estimated future cash flows are discounted to their present value using a pre-tax discount
rate that reflects current market assessments of the time value of money and the risks specific to the asset.
Significant estimation uncertainty – Assumptions used in testing goodwill for impairment
Vista Group has carried out an annual impairment review of goodwill allocated to the CGUs in order to ensure
that recoverable amounts exceed aggregate carrying amounts. VIU was determined by discounting the future
cash flows generated by each CGU. Cash flows were projected based on a 5-year business model for each
CGU, including Board approved 2020 budgets. Information about estimates and judgements that have the
most significant affect on recognition and measurement of goodwill and intangible assets are provided below.
Actual results may be substantially different.
The discount rate is determined using the Capital Asset Pricing Model (CAPM) methodology of determining the
weighted average cost of capital (WACC), using market specific inputs. Vista Group’s WACC is reviewed annually.
27
Annual Financial Statements 2019
Notes to the financial statements
Continued
The key assumptions used for the VIU calculation are as follows:
CGU
REVENUE CAGRPRE-TAX WACCP OST-TAX WACC
2020 – 20242019 – 20232019201820192018
VESL10.7%8.6%12.8%12.5%10.4%9.7%
Movio17.0%26.2%13.3%12.4%10.4%9.7%
Flicks14.3%14.4%16.1%11.9%13.5%9.7%
Maccs10.9%16.8%14.1%13.7%11.8%11.5%
Powster12.6%10.6%16.4%14.1%13.9%12.0%
Cinema Intelligence26.3%31.3%14.6%15.3%11.8%12.6%
Numero20.7%N /A17.5%N /A13.5%N /A
The terminal growth rate for all CGUs is calculated based on the 2024 year and assumes continuous growth
of a minimum of projected inflation estimates of 2.5% (2018: 2.5%). The values assigned to the key assumptions
represent Vista Group’s assessment of future trends and are based on both external and internal sources.
Other factors considered when testing goodwill for impairment include actual financial performance against
budgeted financial performance; any material unfavourable operational and regulatory factors; and any material
unfavourable economic outlook and market competition.
Vista Group’s impairment review concluded there was no impairment of goodwill or other assets during the year
(2018: $nil).
Sensitivity testing
Based on previous experience, Vista Group applied judgement in determining a reasonably possible change in
the key assumptions (sensitised rates) in the VIU models. The CGUs that would result in a potential impairment
scenario are as follows:
• Maccs – the VIU recoverable amount for this CGU is the same as the carrying value (i.e. no headroom). In isolation,
this means an adverse change of the revenue CAGR to 10.0% would result in an impairment charge of $1.3m;
an increase of the pre-tax WACC to 16.0% would result in an impairment charge of $2.3m; and a reduction
of the terminal growth rate to 0.5% would result in an impairment charge of $0.9m.
• Numero – the VIU recoverable amount for this CGU exceeds the carrying amount by $3.6m. A reduction in
the revenue CAGR to 18.6% would result in no headroom. Neither the discount rate nor terminal growth rate
are considered sensitive for this CGU.
5.6 Other intangible assets
Intangible assets
Intangible assets are measured on initial recognition at cost. The cost of intangible assets acquired in a business
combination is their fair value at the date of acquisition. Following initial recognition, intangible assets are carried
at cost less any accumulated amortisation and accumulated impairment losses.
Intangible assets with finite lives are amortised over their useful economic life. The amortisation period and the
amortisation method for an intangible asset with a finite life are reviewed at least annually.
Development costs and internally generated software
Maintenance
Costs associated with maintaining computer software programmes are recognised as an expense within the
statement of comprehensive income as incurred.
Development – capitalised
Internally developed software is capitalised as an intangible asset when they meet the recognition criteria
of NZ IAS 38 (see following page).
Development – other
Other development expenditures that do not meet the recognition criteria are classified as operating expenses as
incurred. Development costs previously recognised as an expense are not recognised as an asset in a subsequent period.
28
Vista Group International Limited
Notes to the financial statements
Continued
Significant accounting judgement – Capitalisation of development costs
Development costs that are directly attributable to the design and testing of identifiable and unique software
products controlled by Vista Group are only recognised as intangible assets when all the following criteria are met:
• it is technically feasible to complete the software product so that it will be available for use;
• management intends to complete the software product and use or sell it;
• there is an ability to use or sell the software product;
• it can be demonstrated how the software product will generate probable future economic benefits;
• adequate technical, financial and other resources to complete the development and to use or sell the software
product are available; and
• the expenditure attributable to the software product during its development can be reliably measured.
Other intangible assets
Intellectual property that has been acquired through business combinations and amounts spent subsequently.
Customer relationships include the purchase of existing customer bases via an existing license agreement
or business combination.
Software licenses include the purchase of third-party software in the normal course of business.
Intangible assets are amortised on a straight-line basis over the following useful economic lives:
• Intellectual property 4 to 15 years
• Customer relationships 4 to 15 years
• Software licenses 2.5 to 15 years
• Internally generated software 3 to 5 years based on their estimated useful life.
The carrying amount of other intangible assets is represented as follows:
2019
INTERNALLY
GENERATED
SOFTWARE
SOFTWARE
LICENSES
INTELLECTUAL
PROPERTY
CUSTOMER
RELATIONSHIPSTOTAL
NZ$mNZ$mNZ$mNZ$mNZ$m
Gross carrying amount
Balance at 1 January17.7 2.6 2.2 4.9 27.4
Additions11.7 -0.2 0.7 12.6
Disposals – deconsolidation of Stardust(1.9)---(1.9)
Exchange differences-(0.1)-(0.1)(0.2)
Balance at year end27.5 2.5 2.4 5.5 37.9
Accumulated amortisation
Balance at 1 January(1.9)(1.3)(1.0)(2.7)(6.9)
Amortisation(2.7)(0.2)(0.4)(0.4)(3.7)
Exchange differences-0.2 -(0.1)0.1
Balance at year end(4.6)(1.3)(1.4)(3.2)(10.5)
Carrying amount at 31 December 201922.9 1.2 1.0 2.3 27.4
29
Annual Financial Statements 2019
Notes to the financial statements
Continued
2018
INTERNALLY
GENERATED
SOFTWARE
SOFTWARE
LICENSES
INTELLECTUAL
PROPERTY
CUSTOMER
RELATIONSHIPSTOTAL
NZ$mNZ$mNZ$mNZ$mNZ$m
Gross carrying amount
Balance at 1 January9.8 2.6 2.1 7.8 22.3
Additions7.9 ---7.9
Disposals---(3.0)(3.0)
Exchange differences--0.1 0.1 0.2
Balance at year end17.7 2.6 2.2 4.9 27.4
Accumulated amortisation
Balance at 1 January(0.6)(1.1)(0.7)(3.9)(6.3)
Amortisation(1.3)(0.2)(0.3)(0.7)(2.5)
Disposals---1.8 1.8
Exchange differences---0.1 0.1
Balance at year end(1.9)(1.3)(1.0)(2.7)(6.9)
Carrying amount at 31 December 201815.8 1.3 1.2 2.2 20.5
On 23 March 2018, Vista Group announced the termination of the French market distribution agreement with Cote
Cine Group (CCG). This resulted in the disposal of the customer relationship previously recognised. A settlement
payment of $1.4m was received.
5.7 Trade and other payables
20192018
NZ$mNZ$m
Trade payables0.3 5.8
Sundry accruals6.6 6.3
Deferred lease incentives-0.3
Employee benefits6.3 6.2
Total trade and other payables 13.2 18.6
Included in trade payables is a balance of $0.1m (2018: $4.8m) payable to the associate company Vista China.
See section 5.3 for detail.
Employee benefits
Accruals for wages, salaries, including non-monetary benefits, commissions and annual leave expected to be
settled within 12 months of the reporting date are recognised in respect of employees’ services up to the reporting
date. They are measured at the amounts expected to be paid using the remuneration rate expected to apply at the
time of settlement, on an undiscounted basis. Expenses for non-accumulating sick leave are recognised when the
leave is taken and are measured at the rates paid or payable.
Vista Group has pension obligations in respect of various defined contribution plans. Vista Group pays contributions
to publicly or privately administered pension insurance plans on a mandatory or contractual basis. Vista Group
has no further payment obligations once the contributions have been paid. The contributions are recognised
as an employee entitlement expense when they are due.
30
Vista Group International Limited
Notes to the financial statements
Continued
Employee expenses included in total expenses:
20192018
NZ$mNZ$m
Wages and salaries71.2 63.0
Share-based payment expense1.6 2.4
Defined contribution plans5.1 4.0
Total employee benefits77.9 69.4
5.8 Lease assets & liabilities
Recognition and measurement of Vista Group’s leasing activities
Vista Group predominantly leases property for fixed periods of 1-7 years, but may have extension options. These
extension options are usually at the discretion of Vista Group and are included in the measurement of the lease
asset if management is reasonably certain the extension will be exercised. Lease terms are negotiated on an
individual basis and contain a variety of terms and conditions. However, these lease agreements do not impose
any covenants.
Prior to 31 December 2018, leases of property, plant and equipment were classified as operating leases. Payments
made under operating leases (net of any incentives received from the lessor) were charged to profit or loss on
a straight-line basis over the period of the lease.
From 1 January 2019, leases are recognised as a right of use asset (lease asset) and a corresponding lease liability
at the date at which the leased asset is available for use by Vista Group. Each lease payment is allocated between
the liability and finance cost. The finance cost is charged to profit or loss over the lease period. The lease asset
is depreciated over the shorter of the asset’s useful life and the lease term on a straight-line basis.
Assets and liabilities arising from a lease are initially measured on a present value basis. Lease liabilities include
the net present value of the following lease payments:
• fixed payments (including in-substance fixed payments), less any lease incentives receivable; and
• payments of penalties for terminating the lease, if the lease term reflects the lessee exercising that option.
The lease payments are discounted using the lessee’s incremental borrowing rate, being the rate that the lessee
would have to pay to borrow the funds necessary to obtain an asset of similar value in a similar economic
environment with similar terms and conditions.
Lease assets are measured at cost comprising the following:
• the amount of the initial measurement of lease liability;
• any lease payments made at or before the commencement date less any lease incentives received;
• any initial direct costs; and
• restoration costs.
See section 8.4 for more information on adjustments recognised on adoption of NZ IFRS 16, practical expedients
applied and the impact of first-time adoption on these financial statements.
31
Annual Financial Statements 2019
Notes to the financial statements
Continued
Lease assets
Vista Group lease assets predominantly comprise property leases. Key movements relating to lease balances are
presented below:
2019
NZ$m
Balance at 1 January -
Additions due to first-time adoption of NZ IFRS 16 6.1
Additions during the year 19.3
Depreciation charges (3.9)
Exchange differences 0.3
Lease assets at 31 December 21.8
Lease liabilities
The maturity of the lease liabilities is as follows:
2019
NZ$m
Less than one year 6.1
One to five years 13.5
More than five years 3.9
Total lease liabilities 23.5
The total interest expense on lease liabilities and the total cash outflow for the year was $0.6m and $3.7m, respectively.
5.9 Deferred revenue
Deferred revenues are recognised on payments received from customers for which the correlating performance
obligations have yet to be satisfied by Vista Group.
The following table represents the revenues recognised in the current year relating to carried forward deferred
revenue, as well as the additional deferred revenue recognised at 31 December where the performance obligations
are yet to be satisfied.
20192018
NZ$mNZ$m
Total deferred revenue at 1 January25.925.1
Revenue recognised from performance obligations satisfied in the current year(20.7)(18.6)
Additional deferred revenues from unsatisfied performance obligations17.515.9
Exchange movements0.43.5
Total deferred revenue at 31 December23.125.9
Represented by:
Current portion
22.921.4
Non-current portion0.24.5
Total deferred revenues23.125.9
32
Vista Group International Limited
Notes to the financial statements
Continued
6. Taxation
This section outlines further details of the income tax expenses incurred by Vista Group, as well as the deferred
taxes recognised on the statement of financial position.
6.1 Income tax expense
Income tax
The income tax expense for the year comprises current and deferred tax. Taxation is recognised in profit or loss
in the statement of comprehensive income, except when it relates to items recognised directly in equity (in which
case the income tax is recognised in equity). Income tax expense is based on tax rates and regulation enacted,
or substantively enacted at the balance sheet date, in the jurisdiction in which the group entities operate.
Income tax is comprised of:
20192018
SECTIONNZ$mNZ$m
Current tax expense5.6 8.8
Deferred tax expense 6.2-(0.8)
Total tax expense 5.6 8.0
Reconciliation of income tax expense
The relationship between the expected tax expense based on the domestic effective tax rate of the Company at 28%
(2018: 28%) and the reported tax expense in the statement of comprehensive income can be reconciled as follows:
20192018
NZ$mNZ$m
Profit before tax (taxable income) 18.4 21.0
Domestic tax rate for the Company28%28%
Expected tax expense 5.2 5.9
Foreign subsidiary company tax(0.1)0.2
Non-assessable income/non-deductible expenses0.40.9
Prior period adjustment(1.0)(0.1)
Deferred tax assets no longer recognised-1.0
Other1.10.1
Total tax expense 5.6 8.0
Effective tax rate 30%38%
As at 31 December 2019, Vista Group has $16.0m (2018: $12.9m) of imputation credits available for use in subsequent
reporting periods. Vista Group also has $0.4m (2018: $3.4m) of unused tax losses for which no deferred tax asset
has been recognised, as they do not meet the recognition criteria.
6.2 Deferred tax assets and liabilities
Deferred tax
Deferred tax is recognised in respect of temporary differences between the carrying amounts of assets and
liabilities for financial reporting purposes and the amounts used for taxation purposes. The amount of deferred
tax is based on the expected manner of realisation of the carrying amount of assets and liabilities, using tax rates
enacted or substantially enacted at the balance sheet date.
A deferred tax asset is recognised only to the extent that it is probable that future taxable profits will be available
against which the asset can be utilised.
33
Annual Financial Statements 2019
Notes to the financial statements
Continued
Significant estimation uncertainty – Recognition of deferred tax assets
The net deferred tax asset at balance date includes temporary timing differences and income tax losses available
to carry forward against future profits. A deferred tax asset is recognised on losses, only when it is considered
probable that sufficient taxable profits will be available to utilise the losses in the near future. Vista Group applies
judgement when reviewing current business plans and forecasts to ascertain the likelihood of future taxable profits.
The financial forecasts used in this assessment are the same as those used in the impairment review of goodwill
and other assets in section 5.5.
Deferred taxes arising from temporary differences and unused tax losses can be summarised as follows:
2019
OPENING
BALANCE
ACQUIRED
AS PART OF
A BUSINESS
COMBINATION
INITIAL
RECOGNITION
OF NZ IFRS 16
RECOGNISED
IN OCI
RECOGNISED
IN INCOME
STATEMENT
CLOSING
BALANCE
NZ$mNZ$mNZ$mNZ$mNZ$mNZ$m
Trade and sundry receivables0.4 ---(0.2)0.2
Employee benefits1.6 ---(0.5)1.1
Property, plant and equipment(0.1)----(0.1)
Lease assets --(1.5)-(2.9)(4.4)
Lease liabilities--1.8 -3.04.8
Intangible assets(1.3)----(1.3)
Unused tax losses1.1 ---0.6 1.7
Other0.1 ----0.1
Deferred tax temporary net asset1.8 -0.3 --2.1
Represented by:
Deferred tax asset7.9
Deferred tax liability(5.8)
Deferred tax temporary net asset2.1
2018
OPENING
BALANCE
ACQUIRED
AS PART OF
A BUSINESS
COMBINATION
INITIAL
RECOGNITION
OF NZ IFRS 16
RECOGNISED
IN OCI
RECOGNISED
IN INCOME
STATEMENT
CLOSING
BALANCE
NZ$mNZ$mNZ$mNZ$mNZ$mNZ$m
Trade and sundry receivables0.2 ---0.2 0.4
Employee benefits0.5 --0.2 0.9 1.6
Property, plant and equipment(0.1)----(0.1)
Intangible assets(1.5)---0.2 (1.3)
Unused tax losses1.5 ---(0.4)1.1
Other0.2 ---(0.1)0.1
Deferred tax temporary net asset0.8 --0.2 0.8 1.8
Represented by:
Deferred tax asset
2.8
Deferred tax liability(1.0)
Deferred tax temporary net asset1.8
34
Vista Group International Limited
Notes to the financial statements
Continued
7. Capital structure
This section outlines Vista Group’s capital structure, earnings per share and share-based employee incentives
which have an impact on Vista Group’s equity.
Contributed equity
Contributed equity represents the value of shares that have been issued. Incremental costs directly attributable
to the issue of ordinary shares are recognised as a deduction from equity.
All transactions with owners of the parent are recorded separately within share capital.
All shares are ordinary, authorised, issued and fully paid shares. They all have equal voting rights and share equally
in dividends and any surplus on winding up. The shares have no par value.
Retained earnings
Retained earnings include all current and prior period retained profits and losses.
Dividend payments
Dividends payable to equity shareholders are included in trade and other payables when the dividends have been
approved by the Board on or before the end of the reporting period but not yet distributed.
Foreign currency reserve
This reserve is used to record cumulative translation differences on the assets and liabilities of foreign operations.
The cumulative translation differences are recycled to the income statement on disposal of the foreign operation.
Share-based payment reserve
The share-based payment reserve is used to record any equity share-based incentives. The reserve value
represents the difference between the value at the time of allocation and the cash received incentives plus
the equity component of contingent consideration payable.
7.1 Contributed equity
During the 2019 financial year, 861,704 shares were issued (2018: 778,960). The following reflects where these
shares were allocated:
MILLIONS OF SHARESNZ$m
2019201820192018
Shares issued and fully paid:
Beginning of the year165.5 164.8 59.4 57.8
Ordinary shares issued during the year:
VCL contingent consideration-0.4 -0.5
Employee incentives0.9 0.3 2.4 0.9
Non-controlling interest change---0.2
Total contributed equity at end of the year166.4 165.5 61.8 59.4
35
Annual Financial Statements 2019
Notes to the financial statements
Continued
7.2 Earnings per share
Vista Group presents basic and diluted earnings per share (EPS) data for its ordinary shares.
Basic EPS is calculated by dividing the profit or loss attributable to owners of the parent by the weighted average
number of ordinary shares in issue during the year.
Diluted EPS is determined by adjusting the profit or loss attributable to owners of the parent and the weighted
average number of ordinary shares in issue during the year for the effects of all dilutive potential ordinary shares,
which for Vista Group comprise share-based payments and performance rights. Potential ordinary shares are
treated as dilutive when their conversion to ordinary shares would decrease EPS or increase the loss per share.
NUMBER OF SHARES (MILLIONS)
20192018
Weighted average ordinary shares for basic earnings per share166.1 165.3
Effect of dilution:
Share options and awards1.3 1.8
Weighted average ordinary shares adjusted for the effect of dilution167.4 167.1
Profit attributable to owners of the parent (NZ$m)10.8 12.3
Basic earnings per share (cents)$0.07 $0.07
Diluted earnings per share (cents)$0.06 $0.07
7.3 Dividends
The following reflects the dividends paid by Vista Group during the year:
DIVIDENDPAYMENT DATE
VISTA GROUP
NUMBER OF SHARES
(MILLIONS)NZ$ PER SHARENZ$m
2019 interim dividend27 September 2019166.4$0.0120 2.0
2018 final dividend22 March 2019165.5$0.0210 3.5
2018 interim dividend27 September 2018165.5$0.0160 2.6
2017 final dividend23 March 2018164.8$0.0174 2.9
7.4 Foreign currency reserve
Functional and presentation currency
Items included in the financial statements of each of Vista Group’s entities are measured using the currency of the
primary economic environment in which the entity operates (the Functional Currency). The financial statements
are presented in New Zealand Dollars (NZD), which is Vista Group’s presentation currency. All financial information
has been presented rounded as millions of dollars (NZ$m).
Transactions and balances
Foreign currency transactions are translated into the functional currency using the exchange rates prevailing
at the dates of the transactions. Foreign exchange gains and losses resulting from the settlement of such transactions
and from the translation, at year-end exchange rates, of monetary assets and liabilities denominated in foreign
currencies, are recognised in the statement of comprehensive income.
36
Vista Group International Limited
Notes to the financial statements
Continued
7.5 Share-based payments
Equity-settled share-based payments to employees are measured at the fair value of the equity instruments
at the grant date. The fair value includes the effect of market based vesting conditions.
The fair value determined at the grant date of the equity-settled share-based payments is expensed evenly
over the vesting period within administration expenses, based on our estimate of equity instruments that will
eventually vest. At each balance sheet date, we revise our estimate of the number of equity instruments expected
to vest as a result of the effect of non-market based vesting conditions. The impact of the revision of the original
estimates, if any, is recognised in profit or loss such that the cumulative expense reflects the revised estimate, with
a corresponding adjustment to the share-based payment reserve.
The share-based payment reserve is used to record any equity share-based incentives.
Share-based payment expense
The share-based payment expense relating to each scheme is as follows:
20192018
NZ$mNZ$m
LTI Scheme – Group Results0.40.6
LTI Scheme – Total Shareholder Return0.10.4
LTI Scheme – Segmental Results0.10.2
LTI Scheme – Movio CEO (Variable)0.5-
Retention Scheme – Group CEO0.61.3
Total share-based payment expense1.72.5
In the prior year, judgement was applied in assuming the non-market conditions of all awards on grant date would
be 100% achieved. In line with NZ IFRS 2 Share-based Payment, this assumption was revised at 31 December 2019
which resulted in a lower share-based payment expense being recognised in the current year.
Summary of performance rights
The movement in the number of performance rights outstanding is summarised in the following table:
NUMBER OF RIGHTS
(MILLIONS)
LONG-TERM INCENTIVE SCHEMES
RETENTION
SCHEME
GROUP CEOTOTAL
GROUP
RESULTSTSR
SEGMENTAL
RESULTS
MOVIO CEO
(TERMINAL)
MOVIO CEO
(VARIABLE)
At 1 January 2018-1.1----1.1
Granted0.3-0.2--0.71.2
Forfeited-(0.1)----(0.1)
Exercised-(0.1)---(0.2)(0.3)
At 1 January 20190.30.90.2--0.51.9
Granted0.4--0.30.4-1.1
Forfeited-(0.1)-(0.3)(0.1)-(0.5)
Exercised(0.2)(0.6)---(0.1)(0.9)
At 31 December 20190.50.20.2-0.30.41.6
The share price of awards on the date of exercise for the Group Results scheme was $4.85 (2018: none exercised);
the TSR scheme was $4.85 (2018: $2.86); and the Group CEO scheme was $5.54 (2018: $3.00).
At the end of the year, no rights are exercisable as all are issued when they vest (2018: none). As all rights are
granted at nil cost, the weighted average exercise price of the rights at all times is $nil (2018: $nil).
The weighted average contractual life of the outstanding performance rights is 1.2 years (2018: 1.1 years).
In the current year, awards in the TSR scheme and both Movio CEO schemes were forfeited as the required
performance targets were not achieved, resulting in the associated share-based payment expense being reversed.
37
Annual Financial Statements 2019
Notes to the financial statements
Continued
Assumptions
The below assumptions were applied when using the Black-Scholes and Monte Carlo option pricing models
to determine the fair value of rights granted in both the current and prior year:
ASSUMPTION
20192018
GROUP
RESULTS
MOVIO CEO
(TERMINAL)
MOVIO CEO
(VARIABLE)
GROUP
RESULTS
SEGMENTAL
RESULTSGROUP CEO
Share price on grant date (NZ$)$3.78$5.53$5.53$2.88$2.88$3.00
Vesting period (months)12-3619-319-3312-3625-610-36
As all performance rights are granted at nil-cost, the exercise price is nil and therefore no volatility or risk-free rates
are required.
The expected dividend yield for each of the above schemes was assumed to be less than 1%.
Vista Group determined the required performance targets of all new rights granted would be 100% achieved.
The assumed December 2021 proportion of Movio/Vista Group revenues applied to the Movio CEO (Terminal)
scheme was 22%.
LTI Scheme – Group Results
This scheme was approved by the Board with awards issued in both 2018 and 2019. Awards under this scheme are
granted to eligible employees meeting criteria determined by the Board to help incentivise sustained performance
over the long-term and to promote alignment with the shareholders’ interests. The scheme identifies revenue and
EBITDA targets over a three-year performance period, with vesting split into 6 tranches, being one per year for
each specified target.
This scheme allows the carry forward of any performance rights that do not vest in each vesting period to be
eligible to vest in future vesting periods.
Performance rights are granted under the plan for no consideration and carry no dividend or voting rights.
The vesting of interests granted to employees is subject to the option holder continuing to be an employee.
The fair value of interests awarded under this scheme was determined using the Black-Scholes option pricing model.
LTI Scheme – Total Shareholder Return (TSR)
This scheme was approved by the Board with awards issued between 2015 and 2017. Awards under this scheme are
granted to eligible employees meeting criteria determined by the Board to help incentivise sustained performance
over the long-term and to promote alignment with the shareholders’ interests. The amount of performance rights
that vest is contingent on Vista Group’s relative TSR over a two and three-year performance period, against all
other NZX50 companies (excluding Vista Group), with 50% of the value of rights allocated under each target.
Vesting of the performance rights is defined by the following table:
PERCENTILE PERFORMANCE AGAINST NZX50 COMPANIESVESTING PERFORMANCE RIGHTS
Less than 50th percentileZero
50th – 75th percentile50% to 100% pro-rata on a straight-line basis
Greater than 75th percentile100%
The measurement of TSR is determined from the start date of the grant period until the end of the performance
period (two years and three years). This scheme allows the carry forward of any performance rights that do not
vest in the first vesting period to be eligible to vest in the vesting period for the second tranche of performance
rights. The scale at which carried over rights may vest at the end of the tranche two vesting period shall
commence at the TSR percentile achieved in respect of the tranche one vesting period.
Performance rights are granted under the plan for no consideration and carry no dividend or voting rights.
The vesting of interests granted to employees is subject to the option holder continuing to be an employee.
The fair value of interests awarded under this scheme was determined using a Monte Carlo pricing model.
38
Vista Group International Limited
Notes to the financial statements
Continued
LTI Scheme – Segmental Results
This scheme was approved by the Board with awards issued in 2018. Awards under this scheme are granted to selected
key management personnel to help incentivise sustained performance over the long-term and to promote alignment
with shareholders’ interests. The scheme identifies operating segment targets over a five-year service period.
Performance rights are granted under the plan for no consideration and carry no dividend or voting rights.
The amount of performance rights to vest depends on operating segment performance against specified targets.
Upon the achievement of stated targets, performance rights are allocated with vesting split into 2 tranches
The first tranche (50%) to vest following a 12-month deferral period following performance rights being issued
and the second (50%) following an additional 12 months.
The vesting of interests granted to employees is subject to the option holder continuing to be an employee.
The fair value of interests awarded under this scheme was determined using a Black-Scholes option pricing model.
LTI Scheme – Movio CEO (Terminal)
This scheme was approved by the Board with awards issued in 2019. Awards under this scheme are granted to the
Movio CEO to ensure continued retention, incentivise sustained performance over the long-term and to promote
alignment with shareholders’ interests.
The grant of shares under this scheme is activated only when Movio exceeds both revenue and EBITDA targets,
each year over a three-year performance period. In addition, the shares will only vest if Vista Group’s average
market capitalisation exceeds $1.1 billion over a three-month period until December 2021. 50% of the shares vest
within 30 days of the targets being achieved (December 2021) and 50% after a further 12 months.
Performance rights are granted under the plan for no consideration and carry no dividend or voting rights.
The vesting of interests granted is subject to the option holder continuing to be an employee. The fair value of
interests awarded under this scheme was determined using a Monte Carlo simulation (using 100,000 trials) to predict
Vista Group’s future share price.
LTI Scheme – Movio CEO (Variable)
This scheme was approved by the Board with awards issued in 2019. Awards under this scheme are granted to the
Movio CEO to ensure continued retention, incentivise sustained performance over the long-term and to promote
alignment with shareholders’ interests. The share rights vest on an annual basis dependent on continued tenure
along with annual Movio revenue and EBITDA targets.
The allocation of performance rights is determined by the proportion of increased Vista Group market
capitalisation that is attributable to Movio which vest annually over a three-year period. This scheme allows
50% of any performance rights to be eligible to vest in the next vesting period should the annual targets not
be achieved.
The calculation of Movio’s approximated market capitalisation is determined as a proportion of Movio revenues
to those of Vista Group.
Performance rights are granted under the plan for no consideration and carry no dividend or voting rights.
The vesting of interests granted is subject to the option holder continuing to be an employee. The fair value of
interests awarded under this scheme was determined using a Monte Carlo simulation (using 100,000 trials) to predict
Vista Group’s future share price and the resulting number of shares that are predicted to vest.
Retention Scheme – Group CEO
This scheme was approved by the Board with awards issued in 2018. Awards under this scheme are granted to the
Vista Group CEO to align with shareholders’ interests and ensure continued retention.
The share rights vest on an annual basis dependent on continued tenure with no further performance requirements.
Share rights are granted for no consideration and carry no dividend or voting rights until vested.
The Vista Group CEO Retention Scheme vested 200,000 shares in April 2018 upon signing of the scheme
documentation, with an additional 150,000 vesting in April 2019. A further two tranches will vest in April 2020
and 2021.
The fair value of interests awarded under this scheme was determined using the Black-Scholes option pricing model.
39
Annual Financial Statements 2019
Notes to the financial statements
Continued
8. Basis of preparation & accounting policies
This section outlines the legislation and accounting standards which have been followed in the preparation of these
financial statements along with explaining how the information has been aggregated.
8.1 Key legislation and accounting standards
The financial statements of Vista Group have been prepared in accordance with Generally Accepted Accounting
Practice in New Zealand (NZ GAAP). Vista Group is a for-profit entity for the purposes of complying with NZ GAAP.
The financial statements comply with New Zealand equivalents to International Financial Reporting Standards
(NZ IFRS), other New Zealand financial reporting standards and authoritative notices that are applicable to entities
that apply NZ IFRS. The financial statements also comply with International Financial Reporting Standards (IFRS)
and interpretations issued by the IFRS Interpretations Committee (IFRS IC) applicable to companies reporting
under IFRS.
The financial statements have been prepared on a historical cost basis except for contingent consideration which
is measured at fair value.
8.2 Basis of consolidation
Vista Group’s financial statements consolidate those of the Company and its subsidiaries as at 31 December 2019.
A subsidiary is an entity over which Vista Group has control. Control is achieved when Vista Group is exposed,
or has rights to variable returns from its involvement with the investee and has the ability to affect those returns
through its power to direct the activities of the investee.
Consolidation of a subsidiary begins when Vista Group obtains control over the subsidiary and ceases when Vista
Group loses control of the subsidiary. Income and expenses of a subsidiary acquired or disposed of during the year
are included within the statement of comprehensive income from the date Vista Group gains control until the date
Vista Group ceases to control the subsidiary. All subsidiaries have a reporting date of 31 December. In preparing
the financial statements, all inter-entity balances and transactions, and unrealised profits and losses, arising within
the consolidated entity have been eliminated in full. A change in the ownership interest of a subsidiary without
a loss of control is accounted for as an equity transaction.
Non-controlling interests, presented as part of equity, represent the portion of a subsidiary’s profit or loss and net
assets that is not held by Vista Group. Vista Group attributes total comprehensive income or loss of subsidiaries
to the amounts of the Company and the non-controlling interests based on their ownership interests.
Vista Group treats transactions with non-controlling interests that do not result in a loss of control as transactions
with equity owners of the group. A change in ownership interest results in an adjustment between the carrying
amounts of the controlling and non-controlling interests to reflect their relative interests in the subsidiary.
Any difference between the amount of the adjustment to non-controlling interests and any consideration paid
or received is recognised in a separate reserve within equity attributable to the owners of the Company.
8.3 Group companies
The results and financial position of all Vista Group entities (none of which has the currency of a hyper-inflationary
economy) that have a functional currency different from the presentation currency are translated into the
presentation currency as follows;
a) assets and liabilities for each statement of financial position presented are translated at the closing rate at the
date of that statement of financial position;
b) income and expenses for each income statement and statement of other comprehensive income, are
translated at average exchange rates (unless this average is not a reasonable approximation of the cumulative
effect of the rates prevailing on the transaction dates, in which case income and expenses are translated at the
rate on the dates of the transactions);
c) all resulting exchange differences are recognised in other comprehensive income; and
d) goodwill and fair value adjustments arising on the acquisition of a foreign entity are treated as assets and
liabilities of the foreign entity and translated at the closing rate. Exchange differences arising are recognised
in other comprehensive income.
40
Vista Group International Limited
Notes to the financial statements
Continued
Foreign exchange gains and losses that relate to borrowings are presented in the statement of comprehensive
income, within finance costs. All other foreign exchange gains and losses are presented in the statement of
comprehensive income on a net basis within other expenses.
Group information
These financial statements consolidate the following subsidiaries of the Company:
NAMEPRINCIPAL ACTIVITY
COUNTRY OF
INCORPORATION
SHAREHOLDING
20192018
Book My Show LimitedInactiveNew Zealand74%74%
Book My Show (NZ) LimitedInactiveNew Zealand74%74%
Flicks LimitedAdvertising salesNew Zealand100%100%
Maccs International B.V.Software development
and licensing
Netherlands50%50%
Maccs USSoftware licensingUnited States50%50%
MovieXchange International LimitedWeb platform development
and licensing
New Zealand100%100%
MovieXchange LimitedWeb platform licensingNew Zealand100%100%
Movio LimitedProvision of online loyalty,
data analytics and marketing
New Zealand100%100%
Movio, Inc.Provision of online loyalty,
data analytics and marketing
United States100%100%
Numero LimitedHolding companyNew Zealand100%50%
Numero (Aust) Pty LtdSoftware development
and licensing
Australia100%50%
Powster, Inc.Marketing and creative
solutions
United States50%50%
Powster LtdMarketing and creative
solutions
United Kingdom50%50%
S.C. Share Dimension S.R.L.Software developmentRomania50%50%
Senda DO Brasil Serviços de Tecnológia LTDA.Software licensingBrazil60%60%
Share Dimension B.V.Software development
and licensing
Netherlands50%50%
Virtual Concepts LimitedHolding companyNew Zealand100%100%
Vista Entertainment Solutions LimitedSoftware development
and licensing
New Zealand100%100%
Vista Entertainment Solutions (Asia) Sdn. Bhd.Software licensingMalaysia100%-
Vista Entertainment Solutions (Canada) LimitedInactiveCanada100%100%
Vista Entertainment Solutions (NL) B.V.Software licensingNetherlands100%-
Vista Entertainment Solutions (Spain), S.L.U.InactiveSpain100%100%
Vista Entertainment Solutions (UK) LimitedSoftware licensingUnited Kingdom100%100%
Vista Entertainment Solutions (USA), Inc.Software licensingUnited States100%100%
Vista Group LimitedInactiveNew Zealand100%100%
Vista International Entertainment Solutions
South Africa (Pty) Ltd
Software licensingSouth Africa100%100%
Vista Latin America, S.A. de C.V.
(1)
Software licensingMexico60%60%
VPF Hub GmbHInactiveGermany45%45%
(1) Prior to its name change in 2019, previously known as Senda Dirección Tecnológica S.A. de C.V.
41
Annual Financial Statements 2019
Notes to the financial statements
Continued
8.4 Adoption of new accounting standards
Impact of new standards adopted by Vista Group
A number of new or amended standards became applicable for the current reporting period. The only new
or amended standard that had a significant impact on Vista Group’s accounting policies was the first-time
adoption of NZ IFRS 16.
NZ IFRS 16 Leases
NZ IFRS 16 is effective for annual reports beginning on or after 1 January 2019. Vista Group has adopted
NZ IFRS 16 using the modified retrospective transition approach. Under this approach, the cumulative effect of
initially applying NZ IFRS 16 is recognised as an adjustment to retained earnings at 1 January 2019. Comparative
figures for the year ended 31 December 2018 are not restated but instead continue to reflect the accounting
policies under NZ IAS 17 Leases.
Adjustments recognised on adoption of NZ IFRS 16
On adoption of NZ IFRS 16, Vista Group recognised lease liabilities in relation to leases which had previously been
classified as ‘operating leases’ under the principles of NZ IAS 17. These liabilities were measured at the present
value of the remaining lease payments, discounted using the lessee’s incremental borrowing rate as of 1 January
2019. The weighted average lessee’s incremental borrowing rate applied to the lease liabilities on 1 January 2019
was 5.4%. Vista Group held no finance leases at 31 December 2018.
A reconciliation of operating lease commitments at 31 December 2018 to the lease liability recognised at 1 January
2019 is shown below:
NZ$m
Operating lease commitments disclosed as at 31 December 2018 24.3
Discounted using the lessee’s incremental borrowing rate at the date of initial application(0.6)
Different treatment of leases not yet commenced to which Vista Group are committed
(1)
(18.3)
Different treatment of extensions and incentives 1.8
Lease liability recognised as at 1 January 2019 7.2
Classified as:
Less than one year 3.4
One to five years 3.3
More than five years 0.5
Lease liability recognised as at 1 January 2019 7.2
(1) Vista Group committed to a 7-year property lease in Los Angeles which was only available for use in 2019, therefore was not included
as a lease liability at 1 January 2019.
The lease assets predominantly comprise property leases which were measured on a retrospective basis as if the
new rules had always been applied.
Practical expedients applied
In applying NZ IFRS 16 for the first time, Vista Group has used the following practical expedients permitted
by the standard:
• use of a single discount rate to leases with reasonably similar characteristics;
• use of hindsight in determining a lease term;
• reliance on previous assessments on whether leases are onerous; and
• exclusion of initial direct costs for the measurement of the lease asset at the date of initial application.
Vista Group has also elected not to reassess whether a contract contains a lease at the date of initial application.
Instead, for contracts entered into before the transition date, Vista Group relied on its assessment made applying
NZ IAS 17 and IFRIC 4 Determining Whether an Arrangement Contains a Lease.
42
Vista Group International Limited
Notes to the financial statements
Continued
Impact of NZ IFRS 16 on these financial statements
On first time implementation of NZ IFRS 16, Vista Group elected not to restate the comparative year values.
The following summarised primary statements detail the impact of NZ IFRS 16 on the current year, as well as the prior
year, should Vista Group have elected to restate its comparative values.
STATEMENT OF FINANCIAL
POSITION (EXTRACT)
31 DEC 2019
ADJUSTED FOR
NZ IFRS 16
IMPACT OF
NZ IFRS 16
31 DEC 2019
EXCLUDING
NZ IFRS 16
31 DEC 2018
ADJUSTED FOR
NZ IFRS 16
IMPACT OF
NZ IFRS 16
31 DEC 2018
PREVIOUSLY
REPORTED
NZ$mNZ$mNZ$mNZ$mNZ$mNZ$m
Cash19.5-19.534.4-34.4
Other current assets58.2-58.262.2-62.2
Total current assets7 7.7-7 7.796.6-96.6
Property, plant and equipment7. 3-7. 35.4-5.4
Lease assets21.821.8-6.16.1-
Deferred tax asset7. 94.83.14.61.82.8
Other non-current assets128.9-128.9116.3-116.3
Total non-current assets165.926.6139.3132.47. 9124.5
Total assets243.626.6217.0229.07. 9221.1
Trade and other payables13.2-13.218.3(0.3)18.6
Lease liabilities6.16.1-3.43.4-
Other current liabilities25.2-25.225.1-25.1
Total current liabilities44.56.138.446.83.143.7
Lease liabilities17.417.4-3.83.8-
Deferred tax liability5.84.41.42.51.51.0
Other non-current liabilities12.4-12.41 7.0-1 7.0
Total non-current liabilities35.621.813.823.35.318.0
Total liabilities80.12 7. 952.270.18.461.7
Net assets163.5(1.3)164.8158.9(0.5)159.4
Contributed equity61.8-61.859.4-59.4
Retained earnings85.8(1.1)86.980.5(0.4)80.9
Foreign currency reserve2.6-2.63.2-3.2
Share-based payment reserve2.1-2.12.8-2.8
Total equity attributable to
owners of the parent
152.3(1.1)153.4145.9(0.4)146.3
Non-controlling interests11.2(0.2)11.413.0(0.1)13.1
Total equity163.5(1.3)164.8158.9(0.5)159.4
43
Annual Financial Statements 2019
Notes to the financial statements
Continued
STATEMENT OF
COMPREHENSIVE INCOME
(EXTRACT)
31 DEC 2019
ADJUSTED FOR
NZ IFRS 16
IMPACT OF
NZ IFRS 16
31 DEC 2019
EXCLUDING
NZ IFRS 16
31 DEC 2018
ADJUSTED FOR
NZ IFRS 16
IMPACT OF
NZ IFRS 16
31 DEC 2018
PREVIOUSLY
REPORTED
NZ$mNZ$mNZ$mNZ$mNZ$mNZ$m
Total revenue144.5-144.5130.7-130.7
Operating expenses68.2-68.259.9-59.9
Administration expenses45.50.245.337. 5(0.8)38.3
Other expenses9.5-9.57. 8-7. 8
Total expenses123.20.2123.0105.2(0.8)106.0
Operating profit21.3(0.2)21.525.50.824.7
Finance costs (1.7)(0.6)(1.1)(1.3)(0.3)(1.0)
Finance income0.6-0.60.3-0.3
Share of loss from associates
and joint ventures
(2.2)-(2.2)(3.0)-(3.0)
Capital gains and losses0.4-0.4---
Profit before tax18.4(0.8)19.221.50.521.0
Tax expense(5.6)(0.1)(5.5)(8.0)-(8.0)
Profit for the year12.8(0.9)13.713.50.513.0
Other comprehensive income(0.6)-(0.6)1.4-1.4
Total comprehensive income
for the year
12.2(0.9)13.114.90.514.4
Earnings per share for profit
attributable to the equity
holders of the parent
Basic earnings per share (cents)$0.07 -$0.07 $0.07 -$0.07
Diluted earnings per share (cents)$0.06$0.01$0.07$0.07-$0.07
Other than the reclassification of the principal portion of operating lease payments to financing activities,
NZ IFRS 16 had no other significant impact on the cash flow statement.
A reconciliation of EBITDA to profit before tax for the period is as follows:
31 DEC 2019
ADJUSTED FOR
NZ IFRS 16
IMPACT OF
NZ IFRS 16
31 DEC 2019
EXCLUDING
NZ IFRS 16
31 DEC 2018
ADJUSTED FOR
NZ IFRS 16
IMPACT OF
NZ IFRS 16
31 DEC 2018
PREVIOUSLY
REPORTED
NZ$mNZ$mNZ$mNZ$mNZ$mNZ$m
EBITDA
(1)
31.1 3.7 27.4 32.8 3.6 29.2
Depreciation and amortisation(9.7)(3.9)(5.8)(7.0)(2.8)(4.2)
EBIT
(2)
21.4 (0.2)21.6 25.8 0.8 25.0
Finance income0.6 -0.6 0.3 -0.3
Finance costs(1.7)(0.6)(1.1)(1.3)(0.3)(1.0)
Acquisition expenses(0.1)-(0.1)(0.3)-(0.3)
Share of loss from associates
and joint ventures
(2.2)-(2.2)(3.0)-(3.0)
Capital gains and losses0.4 -0.4 ---
Profit before tax18.4 (0.8)19.2 21.5 0.5 21.0
44
Vista Group International Limited
Notes to the financial statements
Continued
A reconciliation of segmental EBITDA
(1)
for the period is as follows:
31 DEC 2019
ADJUSTED FOR
NZ IFRS 16
IMPACT OF
NZ IFRS 16
31 DEC 2019
EXCLUDING
NZ IFRS 16
31 DEC 2018
ADJUSTED FOR
NZ IFRS 16
IMPACT OF
NZ IFRS 16
31 DEC 2018
PREVIOUSLY
REPORTED
NZ$mNZ$mNZ$mNZ$mNZ$mNZ$m
Cinema30.9 2.7 28.2 28.3 2.7 25.6
Movio6.8 0.2 6.6 6.4 0.2 6.2
Additional Group Companies3.3 0.7 2.6 2.1 0.7 1.4
Early Stage Investments(1.3)0.1 (1.4)0.4 -0.4
Corporate(8.6)-(8.6)(4.4)-(4.4)
Vista Group EBITDA
(1)
31.1 3.7 27.4 32.8 3.6 29.2
(1) EBITDA is a non-GAAP measure and is defined as earnings before net finance costs, income tax, depreciation and amortisation, acquisition
expenses, capital gains/losses, impairment losses and equity accounted results from associates and joint venture companies.
(2) EBIT is a non-GAAP measure and is defined as earnings before net finance costs, income tax, acquisition expenses, capital gains/losses,
impairment losses and equity accounted results from associate and joint venture companies.
A reconciliation of non-current assets by domicile of entity is as follows:
31 DEC 2019
ADJUSTED FOR
NZ IFRS 16
IMPACT OF
NZ IFRS 16
31 DEC 2019
EXCLUDING
NZ IFRS 16
31 DEC 2018
ADJUSTED FOR
NZ IFRS 16
IMPACT OF
NZ IFRS 16
31 DEC 2018
PREVIOUSLY
REPORTED
NZ$mNZ$mNZ$mNZ$mNZ$mNZ$m
New Zealand55.7 2.0 53.7 42.5 0.9 41.6
United States25.7 15.1 10.6 10.3 1.8 8.5
United Kingdom12.5 3.2 9.3 10.8 2.0 8.8
Mexico11.7 0.2 11.5 11.5 0.1 11.4
Other20.8 1.3 19.5 20.8 1.3 19.5
Impact of standards issued but not yet effective
The IASB have issued IFRS 17 Insurance Contracts, as well as various amendments to existing international
accounting standards. IFRS 17 is mandatory for reporting periods on, or after 1 January 2021. Vista Group does not
intend to adopt this standard before its mandatory date.
Vista Group’s financial reporting will be presented in accordance with these new and amended standards when they
become mandatory, however none are expected to have a material impact on Vista Group’s consolidated results.
45
Annual Financial Statements 2019
Notes to the financial statements
Continued
9. Financial risk management
Vista Group is exposed to three main types of risks in relation to financial instruments, being market (foreign
currency risk and interest rate risk), credit and liquidity.
Vista Group’s risk management framework is set by the Board and implemented by management. The framework
focus includes actively monitoring and securing Vista Group’s short to medium-term cash flows by minimising
the exposure to financial markets. The most significant financial risks to which Vista Group is exposed are
described below.
9.1 Capital management
The following table summarises the capital of Vista Group:
20192018
NZ$mNZ$m
Borrowings – related party0.9 0.9
Borrowings – external10.9 11.1
Equity163.5 159.4
Total capital 175.3 171.4
Vista Group’s policy is to use a mixture of capital raised on the NZX/ASX exchanges and borrowing facilities to meet
anticipated funding requirements. These borrowings together with cash generated from operations, are loaned
internally or contributed as equity to certain subsidiaries.
9.2 Foreign currency risk
Vista Group operates internationally and is exposed to foreign exchange risk in US Dollars (USD), Pounds Sterling
(GBP), Euros (EUR), Chinese Yuan Renminbi (RMB) and Australian Dollars (AUD). Foreign exchange risk arises
from future commercial transactions and recognised assets and liabilities denominated in a currency that is not
the functional currency of the relevant group entity.
To mitigate exposure to foreign currency risk, foreign currency cash flows are monitored in accordance with the
Vista Group’s risk management policies. Vista Group’s risk management policies include treasury management and
foreign exchange policies, the implementation of which is set and reviewed regularly by the Board. Vista Group’s
risk management procedures distinguish short-term foreign currency cash flows (due within 6 months) from
longer-term cash flows (due after 6 months). Where the amounts to be paid and received in a specific currency
are expected to largely offset one another, no further hedging activity is undertaken. The foreign exchange policy
allows for the use of hedging activity however no hedging arrangements have been used in either the current
or prior year.
46
Vista Group International Limited
Notes to the financial statements
Continued
Foreign currency denominated financial assets and liabilities which expose Vista Group to currency risk are disclosed
below. The amounts shown are those reported to key management translated into NZD at the closing rate.
USDGBPEURRMBAUD
NZ$mNZ$mNZ$mNZ$mNZ$m
AT 31 DECEMBER 2019
Financial assets
Cash 11.5 2.8 2.0 -0.8
Trade receivables 25.6 3.0 5.0 0.8 1.8
Sundry receivables0.5 0.6 0.3 0.4 -
Financial liabilities
Trade payables (0.2)-(0.1)--
Sundry payables(2.0)(1.2)(0.5)--
Borrowings – external(5.9)-(5.0)--
Borrowings – related party--(0.9)--
Contingent consideration(0.3)---(0.1)
Net exposure 29.2 5.2 0.8 1.2 2.5
AT 31 DECEMBER 2018
Financial assets
Cash
19.6 9.9 1.6 -1.9
Trade receivables 27.8 3.8 5.2 5.9 1.5
Sundry receivables0.5 -0.4 --
Financial liabilities
Trade payables
(1.4)-(0.1)(2.4)-
Sundry payables(1.0)(0.5)---
Borrowings – external(6.0)-(5.1)--
Borrowings – related party--(0.9)--
Net exposure 39.5 13.2 1.1 3.5 3.4
The following table illustrates the sensitivity of profit or loss and equity in regard to Vista Group’s financial assets
and liabilities affected by the USD/NZD exchange rate, the GBP/NZD exchange rate, the EUR/NZD exchange rate,
the RMB/NZD exchange rate and the AUD/NZD exchange rate ‘all other things being equal’. It assumes a +/- 10%
change of the NZD to currency exchange rate for the year ended 31 December 2019 (2018: 10%). The sensitivity
analysis is based on Vista Group’s foreign currency financial instruments held at each reporting date.
PROFIT/EQUITY
USDGBPEURRMBAUD
NZ$mNZ$mNZ$mNZ$mNZ$m
31 DECEMBER 2019
10% strengthening in NZD(2.6)(0.5)(0.1)(0.1)(0.2)
10% weakening in NZD3.2 0.6 0.1 0.1 0.3
31 DECEMBER 2018
10% strengthening in NZD(3.6)(1.2)(0.1)(0.3)(0.3)
10% weakening in NZD4.4 1.5 0.1 0.4 0.4
Exposures to foreign exchange rates vary during the year depending on the volume of overseas transactions.
Nonetheless, the analysis above is considered to be representative of Vista Group’s exposure to market risk.
47
Annual Financial Statements 2019
Notes to the financial statements
Continued
9.3 Interest rate risk
Vista Group’s interest rate risk primarily arises from long-term borrowing, lease liabilities, cash and advances
to associates. Borrowings and deposits at variable rates expose Vista Group to cash flow interest rate risk.
Borrowings and deposits at fixed rates expose Vista Group to fair value interest rate risk.
The following tables set out the interest rate repricing profile and current interest rate of the interest-bearing
financial assets and liabilities:
EFFECTIVE
INTEREST RATE
FLOATING
FIXED UP TO
3 MONTHS
FIXED UP TO
6 MONTHS
FIXED UP TO
5 YEARSTOTAL
NZ$mNZ$mNZ$mNZ$mNZ$m
AT 31 DECEMBER 2019
Financial assets
Cash-19.5 ---19.5
Financial liabilities
Borrowings – external4.1%---(10.9)(10.9)
Borrowings – related party5.0%---(0.9)(0.9)
Lease liabilities3.9%-(0.1)-(23.4)(23.5)
Contingent consideration----(0.4)(0.4)
Net exposure 19.5 (0.1)-(35.6)(16.2)
AT 31 DECEMBER 2018
Financial assets
Related party loan – Numero
6.0%---8.4 8.4
Cash-34.4 ---34.4
Financial liabilities
Borrowings – external
4.4%---(11.1)(11.1)
Borrowings – related party5.0%---(0.9)(0.9)
Net exposure 34.4 --(3.6)30.8
Profit or loss is sensitive to higher/lower interest income/expense from cash as a result of changes in interest rates.
AT 31 DECEMBER 2019
EFFECTIVE
INTEREST RATE
+1%
EFFECTIVE
INTEREST RATE
-1%
NZ$mNZ$m
Cash0.2(0.2)
Borrowings – external(0.1)0.1
Borrowings – related party--
Lease liabilities(0.2)0.2
Contingent consideration--
Net exposure(0.1)0.1
48
Vista Group International Limited
Notes to the financial statements
Continued
9.4 Credit risk
Credit risk is the risk that a counterparty fails to discharge an obligation to Vista Group. Vista Group is exposed
to this risk for various financial instruments, for example trade and sundry receivables and deposits with financial
institutions and related parties. The maximum exposure to credit risk is limited to the carrying amount of financial
assets recognised at 31 December, as summarised in section 10.2.
Vista Group continuously monitors defaults of customers and other counterparties, identified either individually
or by Vista Group and incorporates this information into its credit risk controls. Vista Group’s policy is to deal only
with credit-worthy counterparties.
At 31 December, Vista Group has certain trade receivables that have not been settled by the contractual due
date but are not considered to be impaired because of the nature of contracts and/or the longevity of ongoing
customer relationships. The amounts at 31 December, analysed by the length of time past due, are:
20192018
NZ$mNZ$m
Not more than 6 months3.83.8
Between 6 months and 9 months2.62.1
Over 9 months1.58.0
Total credit risk7. 913.9
In respect of trade receivables, Vista Group is not exposed to any significant credit risk exposure to any single
counterparty or any group of counterparties having similar characteristics. Trade receivables consist of many
customers in various industries and geographical areas. Based on historical information about customer default
rates, management considers the credit quality of trade receivables that are not past due or impaired to be good.
Judgement has been applied to the recoverability of all trade receivables, with management confirming that the
net balances receivable (excluding the expected credit loss provision) are deemed recoverable and not impaired.
Vista Group has financial assets classified and measured at amortised cost that are subject to the expected credit
loss model requirements of NZ IFRS 9 Financial Instruments (see section 5.1 for the expected credit loss recognised
on trade receivable balances). The credit risk for cash is considered negligible, since the counterparties are
reputable banks with high quality external credit ratings.
At 31 December 2019, due to Numero now being a controlled subsidiary of Vista Group, advances from Vista Group
are no longer subject to credit risk due to the balances eliminating on consolidation.
9.5 Liquidity risk
Liquidity risk is the risk that Vista Group might be unable to meet its obligations. Vista Group’s objective is to
maintain a balance between continuity of funding and flexibility through monitoring of cash and the use of bank
overdrafts and bank loans (see section 4). Vista Group’s policy is that not more than 25% of borrowings should
mature in the next 12-month period. Of the $0.9m related party borrowings balance at 31 December 2019, $0.7m
will mature in greater than one year. Vista Group assessed the concentration of risk with respect to refinancing its
debt as being low. Access to sources of funding is sufficiently available and debt maturing within 12 months can
be rolled over with existing lenders.
Vista Group has significant cash balances held as cash on hand of $19.5m. Vista Group’s dividend policy is to
distribute between 30% to 50% of net profit after tax attributable to owners of the parent, subject to immediate
and future growth opportunities and identified capital expenditure requirements. At balance date, Vista Group has
an NZD $2m overdraft facility with ASB, which remains undrawn. Subsequent to balance date, Vista Group agreed
to extended revolving credit facilities with ASB, primarily to fund the SaaS transformation project and to facilitate
the step-acquisition of Vista China (see section 4.2).
49
Annual Financial Statements 2019
Notes to the financial statements
Continued
The table below summarises the maturity profile of Vista Group’s non-derivative financial liabilities based
on contractual undiscounted payments.
ON DEMAND
LESS THAN
3 MONTHS
3 TO 12
MONTHS
1 TO 5
YEARS> 5 YEARSTOTAL
NZ$mNZ$mNZ$mNZ$mNZ$mNZ$m
AT 31 DECEMBER 2019
Trade payables-0.3---0.3
Sundry payables-5.6---5.6
Borrowings – external---10.9-10.9
Borrowings – related party--0.20.7-0.9
Interest on borrowings-0.10.40.8-1.3
Lease liabilities-1.54.613.53.923.5
Contingent consideration--0.4--0.4
Total liquidity risk-7. 55.625.93.942.9
AT 31 DECEMBER 2018
Trade payables-5.8---5.8
Sundry payables-4.0---4.0
Borrowings – external---11.1-11.1
Borrowings – related party---0.9-0.9
Interest on borrowings-0.10.40.7-1.2
Total liquidity risk-9.90.412.7-23.0
10. Other information
10.1 Related parties
Vista Group has various types of transactions with related parties. Refer to section 5.3 for details of transactions
with associate and joint venture companies. Refer to section 4.2 for details of related party borrowings. Other
related party transactions include transactions with key management personnel which are detailed below.
Key management personnel transactions
Key management personnel include Vista Group’s Board (executive and non-executive) and senior management.
Senior management is defined as personnel who report directly to the Vista Group’s Chief Executive. Key management
personnel include 18 individuals (6 Directors and 12 senior management) (2018: 16 individuals, being 6 Directors
and 10 senior management).
The compensation paid to key management personnel includes:
20192018
NZ$mNZ$m
Salaries including bonuses5.6 3.8
Share-based payments1.2 0.7
Director fees0.3 0.3
Total key management personnel transactions7.1 4.8
Dividends paid to key management personnel on their Vista Group shareholdings amounted to $0.6m (2018: $0.5m).
50
Vista Group International Limited
Notes to the financial statements
Continued
10.2 Financial instruments
Financial instruments
Financial instruments recognised in the statement of financial position include cash, receivables and payables,
lease assets and liabilities, contingent consideration and borrowings. Vista Group’s policy is that no speculative
trading in financial instruments may be undertaken.
Fair value of financial assets and liabilities
Vista Group carries out a fair value assessment of its financial assets and liabilities at 31 December 2019 in
accordance with NZ IFRS 9. Accordingly, financial instruments are classified as either measured at amortised cost,
fair value through other comprehensive income or fair value through profit or loss.
Vista Group’s financial instruments that are measured subsequent to initial recognition at fair value are grouped
into levels based on the degree to which the fair value is observable:
Level 1Fair value measurements derived from quoted prices in active markets for identical assets.
Level 2Fair value measurements derived from inputs other than quoted prices included within level 1 that are
observable for the asset or liability, either directly or indirectly.
Level 3Fair value measurements derived from valuation techniques that include inputs for the asset or liability
which are not based on observable market data.
There have been no transfers between levels or changes in the valuation methods used to determine the fair value
of the Group’s financial instruments during the year. As at 31 December 2019, the only financial instrument carried
at fair value using level 3 measurements is contingent consideration. Level 3 measurements were also applied in the
initial recognition of associates/joint ventures and net assets acquired as part of a business combination.
Vista Group’s financial assets and liabilities by category are summarised as follows:
Cash
Cash comprises cash at bank and on hand and its carrying value equates to fair value.
Trade, related party and other receivables
These assets are short-term in nature and are reviewed for impairment; the carrying value approximates fair value.
Trade, related party and other payables
These liabilities are mainly short-term in nature with the carrying value approximating fair value.
Borrowings
Borrowings have fixed and floating interest rates. Fair value is estimated using the DCF model based on a current
market interest rate for similar products; the carrying value approximates fair value.
Lease assets and liabilities
Assets and liabilities arising from a lease are initially measured on a present value basis using the lessee’s
incremental borrowing rate.
Contingent consideration
These liabilities typically arise from a business combination or a reacquired right. Fair value of elements greater
than 12 months are determined on a present value basis using the Vista Group’s incremental borrowing rate.
Expected credit losses
For trade receivables, Vista Group applies the simplified approach permitted by NZ IFRS 9, which requires
expected lifetime losses to be recognised from initial recognition of the receivables.
Trade receivables are written off when there is no reasonable expectation of recovery. Indicators that there is no
reasonable expectation of recovery include, amongst others, the failure of a debtor to engage in a repayment plan
with Vista Group, and a failure to make contractual payments for a period of greater than 180 days past due.
51
Annual Financial Statements 2019
Notes to the financial statements
Continued
To measure expected credit losses, trade receivables have been grouped and reviewed based on the number of days
past due. The expected credit loss has been calculated by considering the impact of the following characteristics:
• The baseline characteristic considers the age of each invoice and applies an increasing expected credit loss
estimate as the trade receivable ages.
• The aging and write off characteristics consider the history of write off related to the specific customer and the
relative size of aged debt to current debt. If the trade receivable aged over 180 days past due makes up more
than 45% of the total trade receivable for a specific customer, further provision for expected credit loss is added.
• The country, customer and market characteristics consider the relative risk related to the country and/or region
within which the customer resides and assesses the financial strength of the customer and the market position
that Vista Group has achieved within that market.
Judgement has been applied to remove sundry receivables from the expected credit loss calculation as the
counterparties are considered to have a high level of certainty in terms of recoverability.
Financial instruments by category
FINANCIAL ASSETS
AT AMORTISED
COST
FINANCIAL
INSTRUMENTS
AT FAIR VALUE
THROUGH PROFIT
OR LOSS
FINANCIAL
LIABILITIES AT
AMORTISED COST
TOTAL CARRYING
VALUE
NZ$mNZ$mNZ$mNZ$m
AT 31 DECEMBER 2019
Cash19.5 - -19.5
Trade receivables35.4 - -35.4
Sundry receivables2.9 - -2.9
Total financial assets57.8 - -57.8
Trade payables - -0.3 0.3
Sundry payables - -5.6 5.6
Borrowings – external - -10.910.9
Borrowings – related party - -0.9 0.9
Lease liabilities - -23.5 23.5
Contingent consideration -0.4 -0.4
Total financial liabilities -0.4 41.241.6
AT 31 DECEMBER 2018
Cash34.4 - -34.4
Trade receivables44.3 - -44.3
Sundry receivables8.8 - -8.8
Total financial assets87.5 - -87.5
Trade payables - -5.8 5.8
Sundry payables - -4.0 4.0
Borrowings – external - -11.1 11.1
Borrowings – related party - -0.9 0.9
Total financial liabilities - -21.8 21.8
52
Vista Group International Limited
Notes to the financial statements
Continued
10.3 Other disclosures
Contingent liabilities
There were no contingent liabilities for Vista Group at 31 December 2019 (2018: $nil).
Capital commitments
There were no capital commitments for Vista Group at 31 December 2019 (2018: $nil).
Events after balance date
On 31 January 2020, Vista Group entered into a refinancing arrangement with ASB to assist in funding the SaaS
transformation project, the 2020 Vista China step acquisition and any future acquisition related opportunities.
See section 4.2 for further details.
On 30 January 2020, the spread of novel coronavirus (COVID-19) was declared a public health emergency by
the World Health Organisation. As this declaration was made after the reporting period, Vista Group does not
believe it constitutes an ‘Adjustable Event’, as defined in NZ IAS 10 Events after the Reporting Period. Vista Group
will continue to monitor the impact of COVID-19 on both Vista Group and the proposed step acquisition of Vista
China, but at the date of this report it is too early to determine the full impact this virus may have on Vista Group.
Should this public health emergency continue for a prolonged period of time this has the potential to have
a material adverse financial impact on Vista China.
On 27 February 2020, the Board approved a fully imputed final dividend of 2.10 cents per share. The dividend
record date is 13 March 2020 with a payment date of 27 March 2020.
There have been no other events subsequent to 31 December 2019 which materially impact on the results reported.
53
Annual Financial Statements 2019
PricewaterhouseCoopers, 188 Quay Street, Private Bag 92162, Auckland 1142, New Zealand
T: +64 9 355 8000, F: +64 9 355 8001, pwc.co.nz
Independent auditor’s report
To the shareholders of Vista Group International Limited
We have audited the financial statements which comprise:
• the statement of financial position as at 31 December 2019;
• the statement of comprehensive income for the year then ended;
• the statement of changes in equity for the year then ended;
• the statement of cashflows for the year then ended; and
• the notes to the financial statements, which include significant accounting policies.
Our opinion
In our opinion, the accompanying financial statements of Vista Group International Limited (the
Company), including its subsidiaries (the Group), present fairly, in all material respects, the financial
position of the Group as at 31 December 2019, its financial performance and its cash flows for the year
then ended in accordance with New Zealand Equivalents to International Financial Reporting
Standards (NZ IFRS) and International Financial Reporting Standards (IFRS).
Basis for opinion
We conducted our audit in accordance with International Standards on Auditing (New Zealand)
(ISAs (NZ)) and International Standards on Auditing (ISAs). Our responsibilities under those
standards are further described in the Auditor’s responsibilities for the audit of the financial
statements section of our report.
We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for
our opinion.
We are independent of the Group in accordance with Professional and Ethical Standard 1 (Revised)
Code of Ethics for Assurance Practitioners (PES 1) issued by the New Zealand Auditing and Assurance
Standards Board and the International Ethics Standards Board for Accountants’ Code of Ethics for
Professional Accountants (IESBA Code), and we have fulfilled our other ethical responsibilities in
accordance with these requirements.
Our firm carries out other services for the Group in the areas of related assurance services (R&D
growth grant schedule review), advisory services in relation to long term employee incentive schemes
and preparation of an immaterial subsidiary’s financial statements. The provision of these other
services has not impaired our independence as auditor of the Group.
54
Vista Group International Limited
PwC
Our audit approach
Overview
An audit is designed to obtain reasonable assurance whether the financial
statements are free from material misstatement.
Overall Group materiality: $0.95 million, which represents approximately
5% of profit before tax.
We chose profit before tax as the benchmark because, in our view, it is the
benchmark against which the performance of the Group is most commonly
measured by users and is a generally accepted benchmark.
We have determined that there are three key audit matters:
• Carrying value of the investment in Vista Entertainment Solutions
Shanghai Limited ("Vista China")
• Impairment testing of goodwill
• Classification of Research and development costs between
capitalisation and expenditure
Materiality
The scope of our audit was influenced by our application of materiality.
Based on our professional judgement, we determined certain quantitative thresholds for materiality,
including the overall Group materiality for the financial statements as a whole as set out above. These,
together with qualitative considerations, helped us to determine the scope of our audit, the nature,
timing and extent of our audit procedures and to evaluate the effect of misstatements, both
individually and in aggregate on the financial statements as a whole.
Audit scope
We designed our audit by assessing the risks of material misstatement in the financial statements and
our application of materiality. As in all of our audits, we also addressed the risk of management
override of internal controls including among other matters, consideration of whether there was
evidence of bias that represented a risk of material misstatement due to fraud.
We tailored the scope of our audit in order to perform sufficient work to enable us to provide an
opinion on the financial statements as a whole, taking into account the structure of the Group, the
accounting processes and controls, and the industry in which the Group operates.
We performed full scope audits of the financially significant subsidiaries of the Group. In addition, we
also performed specific audit procedures over certain balances and transactions of the holding
company, other subsidiaries and associates.
The full scope audits and specific audit procedures were undertaken by PwC New Zealand and were
performed at a materiality level calculated with reference to a proportion of the Group materiality
appropriate to the relative financial scale of the subsidiary concerned.
Key audit matters
Key audit matters are those matters that, in our professional judgement, were of most significance in
our audit of the financial statements of the current year. These matters were addressed in the context
of our audit of the financial statements as a whole, and in forming our opinion thereon, and we do not
provide a separate opinion on these matters.
55
Annual Financial Statements 2019
PwC
Key audit matter How our audit addressed the key audit matter
Carrying value of the investment in Vista
Entertainment Solutions Shanghai
Limited ("Vista China")
As disclosed in Note 5.3, the carrying
value of the Group’s investment in Vista
China amounts to $30.1 million, including
goodwill of $20.2 million. The Group uses
the equity method of accounting for its
investment.
Management undertook an assessment of
the recoverable value of goodwill and of its
investment in Vista China to assess
whether there had been any impairment.
This assessment involved significant
management judgement in determining
key assumptions and estimates and
included consideration of:
• The recent trading performance of
Vista China and the 2020 budget;
• The forecast revenue growth rates and
cash flows for the following 4 years of
the overall 5 year forecast period;
• An independent business valuation
conducted by an independent expert
which complies with the provisions of
Advisory Engagement Standard No 2
Independent Business Valuation
Engagements, issued by the Chartered
Accountants Australia and New
Zealand; and
• Assumptions relating to a control
discount and transaction costs.
Our audit focused on this area due to the
value of the Group’s investment in Vista
China, and the level of judgement involved
in assessing the recoverable amount of the
investment.
The assessment concluded that there was
no impairment of the investment.
Our audit procedures in relation to the carrying value
of the investment in Vista China included the
following:
• We held discussions with management, including
those outside of the Vista finance function, to gain
an understanding of the strategy and performance
to date of Vista China;
• We reviewed Board meeting minutes to identify
any events or conditions that indicate potential
impairment of the investment;
• We considered the report prepared by
management’s independent expert on their
valuation assessment undertaken as at
31 December 2019. We also compared this current
assessment to the valuation undertaken by the
same independent expert in 2016, 2017 and 2018;
and
• We engaged our own expert to consider the
valuation methodology utilised by management’s
independent expert and the key assumptions made,
in particular the revenue growth rate, discount
rate, transaction costs and control discount. Our
expert’s assessment included comparing the
valuation determined by management’s
independent expert with the valuation indicated by
an external share broker.
We have no matters to report as a result of our
procedures.
56
Vista Group International Limited
PwC
Key audit matter
How our audit addressed the key audit matter
Impairment testing of goodwill
Note 5.4 of the financial statements
provides details of the goodwill balance of
$69.9 million as at 31 December 2019.
Management perform an annual
assessment to determine whether there is
any impairment of goodwill, as disclosed
in Note 5.5.
A value in use (VIU) methodology was
utilised to determine the recoverable
amount of each cash generating unit
(CGU) using discounted cash flows. This
VIU was then compared to the carrying
amount of the associated net assets,
including goodwill, of each CGU as at
31 December 2019. The estimated cash
flows used in the VIU model were based
on the 2020 Board approved budget and
forecast cash flows for the following four
years.
The valuations involve the application of
significant judgement in forecasting future
business performance and determining
certain key assumptions and estimates, in
particular:
• Revenue growth rates for the 5 year
forecast period;
• The long term growth rates for cash
flows beyond the 5 year forecast
period; and
• The appropriate discount rate for each
CGU.
Changes in these assumptions might lead
to changes in the carrying value of
goodwill. The risk is greater for the
goodwill attributed to the MACCS
International BV (“MACCS”) and Numero
Limited (“Numero”) CGUs where the
headroom compared to carrying amount is
lower than for the other CGUs.
Our audit focused on this area due to the
value of the goodwill balance, and the level
of judgement involved in assessing the
recoverable amount of each CGU.
Our audit procedures in relation to impairment testing
of goodwill included the following:
• We gained an understanding of the business
processes and controls applied by management in
assessing whether there was any impairment of
goodwill;
• We held discussions with management, including
those outside of the Vista finance function, about
the performance of each CGU and whether there
were any events or circumstances that indicated
the carrying amount of the CGU, including
goodwill, was impaired;
• We tested the calculation of the VIU model,
including the inputs and the mathematical
accuracy and compared the resulting balances to
the relevant net assets of each CGU; and
• We assessed the key estimates and assumptions
made by management in the CGUs’ VIU models, by
performing the following procedures:
o Obtained an understanding of how
management prepared its budget and forecasts
and the associated review and approval
processes;
o Assessed management’s ability to accurately
forecast by comparing historical forecasts to
actual results;
o Compared growth rates used over the 5 year
forecast period to historical growth rates and
board approved budgets as well as challenging
whether the historical growth rates are
sustainable as the businesses mature;
o Obtained and evaluated management’s
sensitivity analysis to ascertain the impact of
reasonably possible changes in key
assumptions. We also performed our own
sensitivity analysis on the impact of changing
key assumptions to consider whether any
reasonably possible changes could result in
impairment of goodwill; and
o Engaged our own experts to evaluate the
discount rates and terminal growth rates used
in the CGUs’ VIU models by comparing with
those of similar market participants.
57
Annual Financial Statements 2019
PwC
Key audit matter How our audit addressed the key audit matter
Management concluded that goodwill was
not impaired as at 31 December 2019.
However, the valuation of the MACCS and
Numero CGUs were both sensitive to
reasonably possible changes in revenue
growth assumptions and the MACCS CGU
was also sensitive to reasonably possible
changes in the discount rate and terminal
growth rate, and such changes could result
in an impairment, as disclosed in Note 5.5
of the financial statements
• For the MACCS and Numero CGUs we also
performed the following procedures:
o Considered the performance of those CGUs and
gained an understanding of strategic and
operational initiatives being undertaken
through discussions with management,
including those outside of the Vista finance
function; and
o Assessed the extent to which revenue in the
2020 budget is contracted and agreed a sample
of forecast amounts to signed customer
contracts.
We have no matters to report as a result of our
procedures.
Classification of research and
development costs between capitalisation
and expenditure
As disclosed in Note 5.6 the Group has
capitalised $11.7 million of costs incurred
in the development of its software in the
year (FY18 $7.9 million).
As disclosed in Note 2.3 the Group has
recognised $25.4 million of research
expenditure in profit or loss in FY19
(FY18 $22.4 million).
The Group’s research and development
personnel are involved in the research,
development and maintenance of the
Group’s software products.
Our audit focused on this area due to the
magnitude of the research and
development spend and the judgement
involved in assessing whether the costs
meet the criteria detailed in the
accounting standard (NZ IAS 38
Intangible Assets) that require
capitalisation, or whether they should be
expensed.
Management determined the most
significant of these judgements to be the:
• Separately identifiable criteria; and
• Economic feasibility criteria.
In responding to the significant judgements involved
in determining whether research and development
spend has been recognised in accordance with the
accounting standard, our audit procedures included:
• Updating our understanding of management’s
process for assessing how much of the research and
development spend has met all of the NZ IAS 38
recognition criteria;
• Obtaining the detailed analysis of the Group’s
research and development spend for the year
allocated by project and tested the reconciliation of
amounts reported to accounting and payroll
records;
• For a sample of capitalised projects and for a
sample of expensed projects:
o We held discussions with management,
including research and development personnel,
to discuss the nature of work being completed
and their assessment of the areas of judgement
for each, in particular whether and how the
software was separately identifiable and the
economic feasibility of each project selected;
o Assessed the nature of the projects against the
requirements of NZ IAS 38 to determine if they
were capital in nature; and
o For capitalised costs we reviewed management’s
papers which detail how the NZ IAS 38
recognition criteria are met.
We have no matters to report as a result of our
procedures.
58
Vista Group International Limited
PwC
Information other than the financial statements and auditor’s report
The Directors are responsible for the annual report. Our opinion on the financial statements does not
cover the other information included in the annual report and we do not and will not express any form
of assurance conclusion on the other information. At the time of our audit, there was no other
information available to us.
In connection with our audit of the financial statements, if other information is included in the annual
report, our responsibility is to read the other information and, in doing so, consider whether the other
information is materially inconsistent with the financial statements or our knowledge obtained in the
audit, or otherwise appears to be materially misstated. If, based on the work we have performed on the
other information that we obtained prior to the date of this auditor’s report, we conclude that there is a
material misstatement of this other information, we are required to report that fact.
Responsibilities of the Directors for the financial statements
The Directors are responsible, on behalf of the Company, for the preparation and fair presentation of
the financial statements in accordance with NZ IFRS and IFRS, and for such internal control as the
Directors determine is necessary to enable the preparation of financial statements that are free from
material misstatement, whether due to fraud or error.
In preparing the financial statements, the Directors are responsible for assessing the Group’s ability to
continue as a going concern, disclosing, as applicable, matters related to going concern and using the
going concern basis of accounting unless the Directors either intend to liquidate the Group or to cease
operations, or have no realistic alternative but to do so.
Auditor’s responsibilities for the audit of the financial statements
Our objectives are to obtain reasonable assurance about whether the financial statements, as a whole,
are free from material misstatement, whether due to fraud or error, and to issue an auditor’s report
that includes our opinion. Reasonable assurance is a high level of assurance but is not a guarantee that
an audit conducted in accordance with ISAs (NZ) and ISAs will always detect a material misstatement
when it exists. Misstatements can arise from fraud or error and are considered material if, individually
or in the aggregate, they could reasonably be expected to influence the economic decisions of users
taken on the basis of these financial statements.
A further description of our responsibilities for the audit of the financial statements is located at the
External Reporting Board’s website at:
https://www.xrb.govt.nz/standards-for-assurance-practitioners/auditors-responsibilities/audit-
report-1/
This description forms part of our auditor’s report.
59
Annual Financial Statements 2019
PwC
Who we report to
This report is made solely to the Company’s shareholders, as a body. Our audit work has been
undertaken so that we might state those matters which we are required to state to them in an auditor’s
report and for no other purpose. To the fullest extent permitted by law, we do not accept or assume
responsibility to anyone other than the Company and the Company’s shareholders, as a body, for our
audit work, for this report or for the opinions we have formed.
The engagement partner on the audit resulting in this independent auditor’s report is Leopino Foliaki.
For and on behalf of:
Chartered Accountants
27 February 2020
Auckland
60
Vista Group International Limited
2
Annual Report 2019
VISTA GROUP INTERNATIONAL LIMITED
Level 3, 60 Khyber Pass Road
Newton, Auckland 1023
+64 9 984 4570
info@vistagroup.co.nz
vistagroup.co
---
____________________________________________________________________________________________
Vista Group International Ltd, L3, 60 Khyber Pass Road, Newton, PO Box 8279, Symonds St, Auckland 1150, NZ
Media Release
27 February 2020, Vista Group International Ltd, Auckland, New Zealand
Vista Group Results for 2019
Vista Group (VGL) is reporting its 2019 result showing continued growth across its businesses. With its
global film industry vertical integration strategy, Vista Group has shown significant success in its drive
toward achieving majority world market share across its movie industry sectors. Vista Group is now
three times, by revenue, the size it was in 2014 when it listed on the NZX and ASX.
An overview of the wider movie industry showed that 2019 was another good year for the film industry,
with global box office of $US42.5b, an all-time high. European receipts were up 4.5% on 2018 to a new
record high and domestic US box office recorded $US11.4b, the second best year ever. China
continued to break records in attendance, screen growth and film releases in 2019.
Kimbal Riley, Vista’s Group Chief Executive, commented that “this result underlines the fundamental
strengths of Vista Group. We continue to make strong progress in serving our customers globally,
delivering on our mission to enhance the moviegoer experience. We have grown our revenue, reported
a strong EBITDA result and continued our much-admired track record of putting innovation in the hands
of our customers, and their moviegoers.”
Vista Cinema, VGL’s founding and largest business, continues to consistently add around 800 sites per
year. In 2019, by adding 857 new sites to its slate, it now serves over 8,000 sites worldwide
representing 40% of all large circuits. Revenue was up 17% and like for like EBITDA up 9%. Recurring
revenue was steady at 52% of total revenue and revenue from third parties in the ecosystem increased
strongly. Particularly pleasing is the expansion of revenue sharing from payment processing partners.
Vista Cinema continues to invest in its product roadmap. A special mention goes to the product
development organisation in Vista Cinema, who have delivered new products, innovated with existing
products, taken on new implementations for the world’s largest cinema chains and embarked on a
significant SaaS transformation. Veezi continues to build momentum with 161 additional sites added
and now serves more than 1,000 customers worldwide. Veezi ARR (excluding China) was up 22% in
the year – driven by increase in sites and a modest increase in revenue per site.
Movio, the VGL business that delivers data driven marketing solutions for the film industry, saw Movio
Cinema and Movio Research (now split out from Movio Media) reporting solid growth, 19% and 15%
respectively, in their customer base and revenues. Pleasingly, Movio Cinema is now in 57 countries,
with strong growth particularly in EMEA in the last 12 months and 100% of Movio Research’s revenue is
now recurring in nature. Movio Media was flat on 2018, however it made strong progress in the key
area of digital campaigns (68%). This offset a reduction in direct campaigns (16%). The Moviegoer Data
Platform announced in 2019 has progressed well and will have its first pilot customer in test from March
2020.
____________________________________________________________________________________________
Vista Group International Ltd, L3, 60 Khyber Pass Road, Newton, PO Box 8279, Symonds St, Auckland 1150, NZ
The Additional Group Companies segment produced an improved result with Maccs being the standout
performer, recording strong revenue growth of 21% and positive EBITDA, while launching its new Mica
offering, aimed at serving the independent distributor market segment. Numero had a good year, with
revenue up due to wider customer uptake and was breakeven for Q4 2019. Powster grew steadily in the
year whilst building its internal capabilities in the US to complement its UK offering. The volume of
contracts and project opportunities increased in Q4 2019 and Powster enters 2020 with a strong
pipeline. Traffic across the Powster platforms increased 23% over the prior year. Flicks continues to
extend its lead as the largest independent movie site in Australasia. Sales and marketing investment in
Australia resulted in good growth in the second half of the year. Users were up 13% over 2018.
The Early Stage Investments segment generated revenue of $2.9m and an EBITDA loss of $1.3m in
2019. Both Cinema Intelligence and movieXchange are tracking to breakeven and will be folded into the
Cinema segment from 2020, as there is a significant overlap in current and expected customer base.
This will materially reduce both businesses’ sales and marketing costs.
For VGL’s Associates and Joint Ventures segment, Vista China’s revenue was slightly down on 2018
and its net loss reduced significantly. Vista China’s percentage of revenue based on share of online
ticket sales reached 80% by year end and the team have fine-tuned their strategy to focus on luxury top
end cinemas with partner relationships for independent market. In December 2019, Vista Group
announced that it has agreed to purchase a further 14.5% of Vista China capital from its partner
WePiao. Due to the uncertainty around the impact of the coronavirus (COVID-19), Vista Group initiated
discussions with its partner in February 2020 that it intends to pause the transaction until the impact can
be better assessed. Stardust was deconsolidated in February 2019 and continues to be run
independently of the Vista Group.
Key Financial Metrics
• Revenue up 11% to $144.5m
• EBITDA down 5% to $31.1m on a like for like basis
• Operating cashflow of $15.5m
• Final dividend of 2.1 cents per share
Key Operational Metrics
• Vista Group global leadership position in the cinema industry grew to 51% market share of the
20+ screens segment excluding China, up from 48% in 2018
• 857 new Vista Cinema sites (including 143 sites in China) – another very strong year of site
growth to a cumulative 8,059 sites
• Core revenue growth (Cinema and Movio) 16% for the year
• 11% growth in recurring revenue to $88.2m – representing 61% of total revenue.
For further information please contact:
Matt Cawte
Chief Financial Officer
Vista Group International Limited
Contact: +64 9 984 4570
---
Vista Group International Limited
Results Announcement
Results for Announcement to the Market
Name of issuer Vista Group International Limited (NZX & ASX: VGL)
Reporting Period 12 months to 31 December 2019
Previous Reporting Period 12 months to 31 December 2018
Currency NZD
Amount (000s) Percentage change
Revenue from continuing
operations
$144,500 10.56%
Total Revenue $144,500 10.56%
Net profit/(loss) from continuing
operations
$12,800 -1.54%
Total net profit/(loss) $12,800 -1.54%
Final Dividend
Amount per Quoted Equity
Security
$0.02100000
Imputed amount per Quoted
Equity Security
$0.00816667
Record Date 13 March 2020
Dividend Payment Date 27 March 2020
Current period Prior comparable
period
Net tangible assets per Quoted
Equity Security
$0.38522193 $0.44220019
A brief explanation of any of the
figures above necessary to
enable the figures to be
understood
This announcement should be read in conjunction with
the financial statements for the year ended 31 December
2019 that accompany this announcement.
Authority for this Announcement
Name of person authorised to
make this announcement
Matt Cawte – Chief Financial Officer
Contact person for this
announcement
Matt Cawte – Chief Financial Officer
Contact phone number
09 967 4177
Contact email address
matt.cawte@vista.co
Date of release through MAP
27 February 2020
Audited annual financial statements accompany this announcement.
---
Vista Group International Limited
Distribution Notice
Section 1: Issuer Information
Name of issuer Vista Group International Limited (NZX & ASX: VGL)
Financial product name/
description
Ordinary Shares
NZX ticker code VGL
ISIN NZVGLE0003S1
Type of distribution
Full Year X Quarterly
Half Year Special
DRP
applies
Record date 13 March 2020
Ex-Date 12 March 2020
Payment date 27 March 2020
Total monies associated with the
distribution
$3,494,349
Source of distribution Retained earnings
Currency NZD
Section 2: Distribution Amounts per Financial Product
Gross distribution $0.02916667
Total cash distribution $0.02100000
Excluded amount $nil
Supplementary distribution
amount
$nil
Section 3: Imputation Credits and Resident Withholding Tax
Is the distribution imputed Fully imputed X
Partial imputation
No imputation
If fully or partially imputed, please
state imputation rate as % applied
100%
Imputation tax credits per financial
product
$0.00816667
Resident Withholding Tax per
financial product
$0.00145833
Section 4: Distribution Re-investment Plan (if applicable)
DRP % discount (if any)
Not applicable
Start date and end date for
determining market price for DRP
Date strike price to be announced
Specify source of financial
products to be issued under DRP
programme
DRP strike price per financial
product
Last date to submit a participation
notice for this distribution in
accordance with DRP participation
terms
Section 5: Authority for this Announcement
Name of person authorised to
make this announcement
Matt Cawte – Chief Financial Officer
Contact person for this
announcement
Matt Cawte – Chief Financial Officer
Contact phone number
09 967 4177
Contact email address
matt.cawte@vista.co
Date of release through MAP
27 February 2020
---
____________________________________________________________________________________________
Vista Group International Ltd, L3, 60 Khyber Pass Road, Newton, PO Box 8279, Symonds St, Auckland 1150, NZ
27 February 2020
Company Announcement Office
Exchange Centre
Level 6, 20 Bridge Street
Sydney, NSW 2000
Australia
To whom it may concern,
Vista Group International Limited (ASX & NZX:VGL) – ASX Listing Rule 1.15.3
This letter is to confirm that for the purposes of ASX Listing Rule 1.15.3, Vista Group International
Limited (ASX & NZX:VGL) has complied with, and continues to comply with, the NZX Listing Rules.
Yours faithfully,
Kelvin Preston
General Counsel & Company Secretary
Vista Group International Limited
Data sourced from publicly available filings. Our datasets may not be complete. Automated analysis can produce errors. If you believe any data on this page is incorrect, please contact us at hello@nzxplorer.co.nz. For informational purposes only. Not investment advice.