Resilient Vista Navigates Pandemic in Strong Position
20
20
2020
Interim Report
Vista Group International Limited
Contents
Table of
02 Management commentary
04 Statement of comprehensive income
05 Statement of changes in equity
06 Statement of financial position
07 Statement of cash flows
08 Notes to the financial statements
01
Interim Report 2020
Management commentary
The following consolidated interim financial statements for Vista Group International Limited (the ‘Company’ and
its subsidiaries, collectively ‘Vista Group’), are for the six months ended 30 June 2020 and represent the half year
results for Vista Group. Comparisons are to the prior comparable period (PCP) H1 2019.
Financial highlights
• Strong positive operating cashflow of $16.7m, up 123% on first half 2019, includes $3.8m of local and
international wage subsidies and $3.8m of tax deferrals
• Successful $62.4m capital raise with strong investor support
• Revenue down 34% to $44.8m
• EBITDA
1
loss of $6.5m, including non-cash expected credit loss and credit risk provisions of $7.6m
• Loss before tax of $47.9m, including non-cash impairment charges and credit provisions $36.1m.
Operating highlights
• Maintains 51% market share of the 20+ screens segment excluding China
• Innovation continues in all Group companies with new products and enhancements
• New customer sales: Vista Cinema, Movio Cinema, Maccs with Mica.
Industry overview
Box Office
The first half of 2020 has been an extremely difficult period for the global film industry with much of the world’s
cinemas shut from mid-March to late June (from mid-January for China) and significant interruption to the creation
and release of studio content. Though the process of reopening cinema is generally underway across the globe, it is
complicated by local and regional compliance to social distancing and awaiting new content to attract moviegoers
back to the theatre. There are early indications that there is reasonable demand once new content is available.
Segment overview
Cinema
Vista Cinema maintained its market share in the first half of 2020, holding steady at our estimate of 51% of the
global enterprise market (20+ screens) excluding China. Revenue was down 39% due to the impact of COVID-19,
with new license sales particularly impacted and down 61% against the first half of 2019. Recurring revenue
was down 22% for the Cinema segment due to lower billing in Veezi and discounts for maintenance customers,
including for prompt payment.
Cash costs were also down for the half, with salaries down 8% due to salary sacrifice from staff, and government
wage support schemes in NZ, Australia, UK, Netherlands and the US. Marketing and travel were also significantly
reduced in the half. The EBITDA loss of $3.5m was impacted by an increase in the expected credit loss and credit
risk provisions of $6.4m.
Vista Cinema launched the Cinema Reopening Kit in June to assist exhibitors with contactless purchasing,
contact tracing and, very importantly, social distancing options in seating. Whilst total capitalisation of internal
development increased as Vista Cinema continues to invest in its SaaS transformation, it is significantly lower than
forecast as the business moved to reduce contractor and outsourced development spend in favour of maintaining
internal staff on project work. The priorities of the SaaS transformation have also changed with the emphasis on
near term digital products that will be more immediately useful in the post-COVID cinema market.
Movio
Movio core revenue was down 29%. This was a lower reduction than expected considering the global conditions
across the exhibitor and studio markets. In general, where Movio products were based on subscriptions, revenue
has held up well. This is also the case in Movio Cinema, where discounts were only provided early in the pandemic
in return for prompt payment, and in the long term license component of Movio Research. Where Movio products
rely on current moviegoer data to provide insights and films to be released to execute campaigns against, as
expected revenue was down significantly.
Movio Cinema customer numbers were steady in the first half of the year, as were transaction volumes, as customers
continued to communicate with their loyalty members throughout lockdown. Movio Research successfully trialled
advertising effectiveness campaigns with Google and Hulu. During lockdown, much like the Vista Cinema team,
Movio assessed its technology platforms and has re-focused much of its development onto projects that deliver
near term benefits to customers as they enter the cinema re-opening phase.
Additional Group Companies
This segment comprises of Maccs, Numero (from October 2019), Powster and Flicks.
Maccs was less impacted by the pandemic than the rest of the Group, with revenues down 7%. Maccs won new
business in Europe and the USA with its Mica product in the half.
Numero had a good start to the year, with revenues in line with prior year (not consolidated) and Sony
International has engaged Numero for their international box office reporting.
Powster revenue was down 34% as billings for showtimes reduced with cinema closure and creative revenues
declined in the short term with customers deferring or cancelling work. New business in streaming and music
were won and are expected to partly fill the revenue shortfall in the second half of the year.
Flicks revenue was down 12% due to declines in advertising revenues. Flicks successfully extending its movie
content focus into streaming in the first half of 2020 and, despite COVID-19, traffic was down only 8%.
Corporate
Reported costs were down significantly as there are no material short or long-term incentive costs in the first
half 2020 as targets set for these are no longer achievable. The restructure announced in late June which covers
the Group, Cinema and Movio segments will yield annual savings in salaries of approximately $15m, the top end of
the $12m – $15m forecast range.
Financial overview
Trading performance for 2020 reflected the wider market conditions. Reported revenue was down 34% for
the Group with non-recurring revenue (primarily one-off license revenue) particularly impacted, down 54%,
as customers deferred or cancelled capital projects. Recurring revenue was down 21% as customers reduced
usage of various products across the core businesses in particular.
Despite the COVID-19 pandemic Vista Group continues to maintain a strong balance sheet. The Group drew on
its debt facilities early in the pandemic and successfully raised $62.4m (net of transaction costs) during lockdown
from a very supportive institutional and retail shareholder base. Total trade receivables were down significantly
from 31 December 2019, with lower billings and accrued revenue, increased provision for expected credit
loss ($5.8m) and strong collections in the first few months of the calendar year as well as good support from
customers during lockdown.
The Group has taken a conservative approach in reviewing the carrying value of its assets, resulting in non-cash
impairment charges to the income statement of $11.6m against goodwill (primarily in MACCS and Numero), $15.0m
against investments in associates (Vista China and Stardust) and $1.9m against internally developed software and
lease assets.
Vista Group generated a strong positive cashflow from operating activities, $16.7m, with good payables and cost
management, welcome government assistance, employee salary sacrifice and good collections given the pandemic
and customer conditions. Investing cashflow decreased compared to the first half of 2019 with previously mentioned
increases in software development offset by declines in fixed asset expenditure and other investing activities.
Early in the pandemic, and in order to preserve cash, the Group cancelled its 2019 final dividend payment
and its agreement to purchase a further 14.5% of Vista China. Vista Group Board has also suspended future
dividend payments.
The Group ended the half year with cash, net of borrowings, of $74.7m.
1. EBITDA is a non-GAAP measure and is defined as earnings before net finance costs, income tax, depreciation and amortisation,
acquisition expenses, capital gains/losses, impairment charges, restructuring costs and share of equity accounted results from
associates and joint ventures.
02
Vista Group International Limited
03
Interim Report 2020
Statement of comprehensive income
Six months ended 30 June 2020
30 JUNE 202030 JUNE 2019
NZ$mNZ$m
SECTIONUNAUDITEDUNAUDITED
Total revenue1
44.8 67.5
Sales and marketing expenses
2.3 5.5
Operating expenses
28.7 31.6
Administration expenses
29.9 22.4
Foreign currency gains
(1.4)-
Total expenses 59.5 59.5
Operating (loss)/profit(14.7)8.0
Finance costs(1.2)(0.7)
Finance income0.1 0.3
Acquisition expenses(0.1)0.1
Share of equity accounted loss from associates and joint ventures
7
(1.9)(1.0)
Impairment charges
3
(28.5)(0.6)
Restructuring costs
3
(1.6)-
Capital gains and losses3- 0.1
(Loss)/profit before tax(47.9)6.2
Taxation 4.7 (2.1)
(Loss)/profit for the period (43.2)4.1
(Loss)/profit for the period is attributable to:
Owners of the parent(42.4)4.0
Non-controlling interests (0.8)0.1
(Loss)/profit for the period (43.2)4.1
Other comprehensive income
Items that may be reclassified subsequently to profit or loss:
Exchange differences on translation of foreign operations, net of tax1.9(0.3)
Total other comprehensive income1.9 (0.3)
Total comprehensive income for the period (41.3)3.8
Total comprehensive income for the period is attributable to:
Owners of the parent(40.7)3.7
Non-controlling interests (0.6)0.1
Total comprehensive income for the period (41.3)3.8
Earnings per share of (loss)/profit attributable to the owners of the parent
Basic earnings per share (cents)
1
12($0.21)$0.02
Diluted earnings per share (cents)
1
12($0.21)$0.02
1. The comparative earnings per share has been re-presented following the rights issue detailed in section 12.
The above statement should be read in conjunction with the accompanying notes.
ATTRIBUTABLE TO THE OWNERS OF THE PARENT
CONTRIBUTED
EQUITY
RETAINED
EARNINGS
FOREIGN
CURRENCY
RESERVE
SHARE-BASED
PAYMENT
RESERVETOTAL
NON-
CONTROLLING
INTERESTS
TOTAL
EQUITY
SECTIONNZ$mNZ$mNZ$mNZ$mNZ$mNZ$mNZ$m
UNAUDITED
Balance at 1 January 2020
61.8 85.8 2.6 2.1 152.3 11.2 163.5
Loss for the period
-(42.4)--(42.4)(0.8)(43.2)
Other comprehensive income
--1.7 -1.7 0.2 1.9
Total comprehensive income-(42.4)1.7 -(40.7)(0.6)(41.3)
Transactions with owners in
their capacity as owners:
Issue of equity1262.4 ---62.4 -62.4
Share-based payments
12
0.8 --(1.1)(0.3)-(0.3)
Dividends paid -----(1.5)(1.5)
Balance at 30 June 2020125.0 43.4 4.3 1.0 173.7 9.1 182.8
UNAUDITED
Balance at 1 January 2019
59.4 80.9 3.2 2.8 146.3 13.1 159.4
Accounting policy change
-(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 period-4.0 --4.0 0.1 4.1
Other comprehensive income --(0.3)-(0.3)-(0.3)
Total comprehensive income -4.0 (0.3)-3.7 0.1 3.8
Transactions with owners in
their capacity as owners:
Non-controlling interest change-----(1.3)(1.3)
Share-based payments2.2 --(0.5)1.7 -1.7
Dividends paid -(3.5)--(3.5)(0.7)(4.2)
Balance at 30 June 2019
61.6 81.0 2.9 2.3 147.8 11.1 158.9
The above statement should be read in conjunction with the accompanying notes.
Statement of changes in equity
Six months ended 30 June 2020
04
Vista Group International Limited
05
Interim Report 2020
30 JUNE 202031 DECEMBER 2019
NZ$mNZ$m
SECTIONUNAUDITEDAUDITED
CURRENT ASSETS
Cash
96.019.5
Trade and other receivables
637.056.2
Income tax receivable
0.82.0
Total current assets
133.87 7.7
NON-CURRENT ASSETS
Property, plant and equipment6.97. 3
Lease assets18.721.8
Investment in associates and joint ventures714.631.6
Goodwill8, 957.169.9
Other intangible assets
10
33.627. 4
Deferred tax asset11.37. 9
Total non-current assets 142.2165.9
Total assets 276.0243.6
CURRENT LIABILITIES
Borrowings – related party50.20.2
Trade and other payables18.113.2
Lease liabilities6.36.1
Deferred revenue21.422.9
Contingent consideration0.40.4
Provisions112.3-
Income tax payable 1.71.7
Total current liabilities50.444.5
NON-CURRENT LIABILITIES
Borrowings – related party
5
0.70.7
Borrowings – external520.410.9
Lease liabilities15.217.4
Deferred revenue-0.2
Provisions110.10.6
Deferred tax liability 6.45.8
Total non-current liabilities
42.835.6
Total liabilities 93.280.1
Net assets 182.8163.5
EQUITY
Contributed equity12125.061.8
Retained earnings43.485.8
Foreign currency reserve4.32.6
Share-based payment reserve 1.02.1
Total equity attributable to owners of the parent173.7152.3
Non-controlling interests 9.111.2
Total equity 182.8163.5
For and on behalf of the Board who authorised these financial statements for issue on 27 August 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 30 June 2020
30 JUNE 202030 JUNE 2019
NZ$mNZ$m
SECTIONUNAUDITEDUNAUDITED
CASHFLOWS FROM OPERATING ACTIVITIES
Receipts from customers57. 674.4
Payments to suppliers(49.3)(60.5)
COVID-19 related wage subsidies
53.8-
COVID-19 related tax deferrals53.8-
Taxes received/(paid)1.6(6.0)
Interest paid (0.8)(0.4)
Net cash inflow from operating activities516.77.5
CASHFLOWS FROM INVESTING ACTIVITIES
Purchase of property, plant and equipment(0.6)(2.5)
Purchase of internally generated software and other intangibles10(7.5)(5.8)
Interest received0.1-
Related party loan advance – Numero-(0.6)
Funding provided to associates and joint ventures-(0.6)
Derecognition of Stardust cash balances-(1.5)
Net cash applied to investing activities (8.0)(11.0)
CASHFLOWS FROM FINANCING ACTIVITIES
Issue of ordinary shares
12
62.4-
Lease payments (principal elements)(2.1)(1.9)
Loans and borrowings drawdown – ASB531.3-
Loans and borrowings drawdown – HSBC PPP Loan3, 53.1-
Loans and borrowings repayment5(24.1)-
Dividends paid to non-controlling interests(1.5)(0.7)
Dividends paid to the owners of the parent
-(3.5)
Net cash inflow/(applied) to financing activities 69.1(6.1)
Net increase/(decrease) in cash 77.8(9.6)
Cash at beginning of period19.534.4
Foreign exchange differences
(1.3)-
Cash at period end 96.024.8
The above statement should be read in conjunction with the accompanying notes.
Statement of cash flows
Six months ended 30 June 2020
06
Vista Group International Limited
07
Interim Report 2020
1. Revenue
Revenue by source
UNAUDITED
30 JUNE 202030 JUNE 2019
NZ$m%NZ$m%
Product
16.7 18.8
Maintenance
17.6 22.6
Revenue provision – credit risk(1.4) -
Recurring revenue32.9 73%41.4 61%
Product3.0 14.9
Services5.4 6.5
Development1.4 2.1
Hardware2.5 2.5
Revenue provision – credit risk(0.4) -
Other- 0.1
Non-recurring revenue11.9 27%26.1 39%
Total revenue44.8 100%67.5 100%
Significant judgement and source of estimation uncertainty – Revenue provisioning
As a result of the COVID-19 pandemic, there is a risk that Vista Group is not able to recover all amounts billed due
to the financial distress of its customers. In accordance with NZ IFRS 15 Revenue from Contracts with Customers,
revenue can only be recognised when it is probable that the entity will collect the consideration.
At 30 June 2020, Vista Group applied judgement in determining the level of revenues that will be collectable. Such
revenue provisioning is highly subjective due to it not being clear when cinemas will begin opening in a meaningful
way. Judgements made in the revenue provisioning include:
• Concession discounts: Many of Vista Group’s core customers are located in regions which have been affected by
the spread of the COVID-19 pandemic (such as North America, Europe and Asia), where the majority of cinemas
have been closed. To ensure timely payment, or to facilitate support to customers, Vista Group have granted
concessions to payment terms or discounts to recurring fees. Vista Group has worked closely with its customer
base to provide appropriate relief, whilst seeking to reserve its position in respect of amounts contractually owed.
At 30 June 2020, concession discounts are only recognised when they have been agreed, or where the
customer has a reasonable expectation of being entitled to a discount. Vista Group has applied judgement
when determining which customers were entitled to a concession discount.
• Credit risk (core businesses): Vista Group have assumed 15% of trade receivables and accrued revenue in the
Cinema and Movio segments may not be collectible due to cinemas experiencing financial distress. For revenue
recognised from 1 March 2020 (the month when the COVID-19 pandemic forced worldwide cinema closures)
to 30 June 2020, this provision reduces the level of revenues recognised. Provisioning for revenues recognised
prior to 1 March 2020 is included separately as an expected credit loss (ECL).
• Credit risk (Additional Group Companies segment): Customers in this segment are predominantly studios,
each of whom have more diversified revenues (i.e. video on demand, television etc.). These customers have
predominantly continued settling their invoices during the pandemic and are not anticipated to have the same
level of credit issues. Accordingly, only minimal provisioning has been required on a customer-by-customer basis.
• Maintenance revenues (Cinema segment): To ensure the revenues recognised in the period represent those
where collection is probable, Vista Group have overlaid a provision for maintenance revenues which are likely
to require a further discount to be applied.
See section 6 for details of the revenue provisions held at 30 June 2020.
Recurring and non-recurring revenues
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.
Timing of revenue recognition by segment
UNAUDITED
CINEMAMOVIOAGCCORPORATETOTAL
NZ$mNZ$mNZ$mNZ$mNZ$m
Six months ended 30 June 2020
At a point in time8.9 2.5 1.6 -13.0
Over time19.7 5.5 5.5 1.1 31.8
Total revenue28.6 8.0 7.1 1.1 44.8
Six months ended 30 June 2019
At a point in time20.34.21.4-25.9
Over time26.87. 46.41.041.6
Total revenue47.1 11.6 7.8 1.0 67. 5
2. Operating segments
Vista Group operates in the vertical cinema/film market via three reportable segments and a corporate segment.
Due to a significant overlap in current and expected customer base of the Early Stage Investments and Cinema
segments, Vista Group changed its operating segments during the period for management reporting purposes.
The previously reported Early Stage Investments segment is now included within the Cinema segment and the
comparative segmental disclosures below have been restated for the change in operating segments.
The Chief Executive and 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. This segment now also includes movieXchange and Share Dimension (Cinema
Intelligence), which were previously reported under the prior year Early Stage Investments segment.
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. None of these
businesses 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 Vista China, an associate company, is recognised within this segment.
Notes to the financial statements
08
Vista Group International Limited
09
Interim Report 2020
Operating segment performance
Vista Group has adjusted its definition of EBITDA to also exclude restructuring costs due to it being a one-off,
non-trading related cost. The CODM also excludes these costs when measuring the performance of Vista Group.
More information on restructuring costs is available in section 3.
UNAUDITED
CINEMA
2
MOVIOAGC
1
CORPORATETOTAL
NZ$mNZ$mNZ$mNZ$mNZ$m
Six months ended 30 June 2020
Recurring revenue
18.9 7.1 5.8 1.1 32.9
Non-recurring revenue9.7 0.9 1.3 -11.9
Total revenue28.6 8.0 7.1 1.1 44.8
Operating expenses(19.8)(4.7)(4.3)0.1 (28.7)
Sales, marketing and admin expenses(13.4)(3.8)(3.2)(3.6)(24.0)
Foreign currency gains/(losses)1.1 0.3 0.3 (0.3)1.4
EBITDA
3
(3.5)(0.2)(0.1)(2.7)(6.5)
EBITDA margin
5
-12%-3%-1% -15%
Six months ended 30 June 2019 (restated)
Recurring revenue24.39.17.01.041.4
Non-recurring revenue22.82.50.8-26.1
Total revenue47.1 11.6 7.8 1.0 67.5
Operating expenses(22.7)(5.0)(3.8)(0.1)(31.6)
Sales, marketing and admin expenses(9.7)(4.3)(3.4)(6.7)(24.1)
Foreign currency gains/(losses)-----
EBITDA
3
14.7 2.3 0.6 (5.8)11.8
EBITDA margin
5
31%20%8% 17%
Reconciliation of EBITDA to (loss)/profit before tax
30 JUNE 202030 JUNE 2019
NZ$mNZ$m
UNAUDITEDUNAUDITED
EBITDA
3
(6.5)11.8
Depreciation and amortisation(8.2)(3.8)
EBIT
4
(14.7)8.0
Finance costs(1.2)(0.7)
Finance income0.1 0.3
Acquisition expenses(0.1)0.1
Share of equity accounted loss from associates and joint ventures(1.9)(1.0)
Impairment charges(28.5)(0.6)
Restructuring costs(1.6)-
Capital gains and losses-0.1
(Loss)/profit before tax(47.9)6.2
1. Includes results of Numero from 14 October 2019, when control was obtained through the step acquisition (see section 4).
2. Includes results of Stardust until 25 February 2019, when it ceased to be a controlled entity.
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 charges, restructuring costs and share of equity accounted results from
associates and joint ventures.
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, restructuring costs and share of equity accounted results from associate and joint ventures.
5. EBITDA margin is a non-GAAP measures which the CODM regularly reviews and is calculated as EBITDA over total revenue.
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.
30 JUNE 202030 JUNE 2019
NZ$mNZ$m
UNAUDITEDUNAUDITED
New Zealand8.7 13.4
United States17.6 28.0
United Kingdom10.2 15.7
Mexico3.4 6.4
Other4.9 4.0
Total revenue44.8 67.5
Non-current assets by domicile of entity
Non-current operating assets by location of the reporting entity are presented in the following table.
30 JUNE 202031 DECEMBER 2019
NZ$mNZ$m
UNAUDITEDAUDITED
New Zealand54.1 55.7
United States25.5 25.7
United Kingdom10.6 12.5
Mexico12.2 11.7
Other13.9 20.8
As required by NZ IFRS 8, the table above excludes deferred tax assets. Investment in associates are excluded from
the non-current assets balance presented.
3. Expenses and other income
Impairment charges
30 JUNE 202030 JUNE 2019
NZ$mNZ$m
SECTIONUNAUDITEDUNAUDITED
Goodwill8, 911.6 -
Intangible assets101.7 -
Lease assets0.2 -
Investment in joint venture – Stardust71.3 -
Investment in associate – Vista China713.7 -
Investment in associate – Numero -0.6
Total impairment charges 28.5 0.6
All impairment charges relating to goodwill and investments in associates are attributable to the corporate
operating segment. The investment in Vista China is attributable to the Cinema operating segment. Of the
impairment charges relating to intangible and leased assets, $1.3m relates to Cinema, $0.4m relates to Movio
and $0.2m relates to the AGC operating segments.
10
Vista Group International Limited
11
Interim Report 2020
Notes to the financial statements
Continued
Capital gains and losses
In the prior period, a capital gain of $0.1m was recognised when Stardust was reclassified from a subsidiary
to a joint venture.
Restructuring costs
On 4 June 2020, Vista Group announced it had begun consultation with its New Zealand and United Kingdom
based staff around a proposed new structure for its core businesses (Vista Group, Vista Cinema and Movio).
This consultation period concluded in July 2020 with a total cost of $1.6m being provided at 30 June 2020
(see section 11).
Government grants
Government grants are recognised when 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.
Total government grants recognised in the income statement during the period was $7.6m (30 June 2019: $2.0m).
Wage subsidies:
During the period, Vista Group received $3.8m of wage subsidies from various governments including New
Zealand, Australia, Netherlands and United Kingdom. The purpose of these subsidies was to help incentivise
businesses to retain as many employees as possible. At 30 June 2020, all of these grants were released to the
income statement.
HSBC PPP loan:
On 15 May 2020, Vista Group entered into a $3.1m loan arrangement with HSBC as part of US government
paycheck protection program (‘PPP’). This loan is a US government designed incentive for businesses impacted
by COVID-19 to keep staff on their payroll. Vista Group can apply to HSBC Bank for this loan to be forgiven if
all employees are kept on the payroll for at least eight weeks and the money is used for payroll, rent, mortgage
interest, or utilities.
Vista Group will apply for forgiveness of this loan in the second half of 2020, when all the required expenditure
has been incurred.
At 30 June 2020, Vista Group is required to recognise a sundry receivable for the amount currently eligible to be
forgiven. The amount recognised as a government grant on the income statement was $2.3m. See section 5 for
more details of the HSBC PPP loan.
Growth grants:
During the period, Vista Group recognised a total of $1.5m (30 June 2019: $2.0m) of grants from Callaghan
Innovation in New Zealand (‘Callaghan’) and Ministry of Economic Affairs (WBSO) in Netherlands to assist with
research and development.
At balance date, the Callaghan scheme includes a 10% retention amount of $0.2m (30 June 2019: $0.1m) yet
to be paid and subject to independent auditor review.
4. Numero step acquisition
Significant accounting judgement – Fair value of intangible assets acquired in a business combination
On 14 October 2019, Vista Group announced it had acquired the remaining 50% stake in Numero. This transaction
resulted in Vista Group obtaining control of Numero and it was therefore 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 Numero transaction completing close to 31 December 2019, the fair value of net assets was provisional.
Due to their significance, the fair value of the acquired intangible assets of Numero were performed by external
valuation experts.
Judgement was required to determine how an external market participant would determine the fair value of the
Numero borrowings from Vista Group. While the total borrowings 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 borrowings 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 this step acquisition resulted in a change in control, a non-taxable capital gain of $0.3m was recognised.
Goodwill is attributable to future growth in Numero obtained from future operating synergies and the ability to
leverage Vista Group’s existing infrastructure and customer network. Lastly, the goodwill will include a portion
relating to the assembled workforce, which do not meet the NZ IAS 38 Intangible Assets recognition criteria.
The net assets acquired are below:
NUMERO
NZ$m
SECTIONUNAUDITED
Fair value of net assets acquired
Cash 0.3
Intangible assets – customer relationships 10 1.3
Intangible assets – software
10
2.4
Intangible assets – brands 10 0.3
Deferred tax liability in respect of intangible assets (1.2)
Trade and other receivables 0.4
Trade and other payables
(0.8)
Deferred revenue
(0.1)
Lease assets 0.1
Lease liabilities – current (0.1)
Net assets acquired 2.6
Goodwill
8
3.4
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
12
Vista Group International Limited
13
Interim Report 2020
Notes to the financial statements
Continued
5. Cash flows and borrowings
Reconciliation of net profit to operating cash flows
30 JUNE 202030 JUNE 2019
NZ$mNZ$m
SECTIONUNAUDITEDUNAUDITED
(Loss)/profit for the period
(43.2)4.1
Non-cash items:
Amortisation 10
3.7 1.4
Depreciation4.5 2.4
Impairment charges328.5 0.6
Share-based payment expense12(0.3)1.7
Non-cash finance charges0.4 0.3
Acquisition expenses0.1 (0.1)
Capital gains and losses3-(0.1)
Share of equity accounted loss from associates and joint ventures71.9 1.0
Foreign exchange movements(1.4)0.4
Movement in revenue provision – concession discounts
6
2.4 -
Movement in revenue provision – credit risk61.8 -
Movement in revenue provision – maintenance61.8 -
Movement in ECL provision65.8 (0.7)
Movement in restructuring provision
11
1.6 -
Movement in other provisions110.2 -
Net non-cash items 51.0 6.9
Movements in working capital:
Increase in related party trade and other payables0.2 -
(Increase)/decrease in related party trade and other receivables,
net of deferred revenue
(2.1)0.9
Increase/(decrease) in trade and other payables5.5 (0.9)
Decrease in trade and other receivables, net of deferred revenue6.8 0.5
Increase in net taxation receivable(1.5)(4.0)
Net change in working capital 8.9 (3.5)
Net cash inflow from operating activities 16.7 7. 5
COVID-19 related cash inflows and tax deferrals
To enable the reader to better understand the composition of the net cash inflow from operating activities on the
statement of cash flows, the following items have been disaggregated from cash receipts from customers, cash
payments to suppliers and cash taxes paid.
30 JUNE 202030 JUNE 2019
NZ$mNZ$m
SECTIONUNAUDITEDUNAUDITED
Government wage subsidies – NZ, AU, UK, NL33.8 -
Government assistance – NZ PAYE deferral2.0 -
Government assistance – NZ loss carry back scheme1.8 -
COVID-19 related cash inflows and tax deferrals 7.6 -
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.
30 JUNE 202031 DECEMBER 2019
NZ$mNZ$m
UNAUDITEDAUDITED
Borrowings – related party0.9 0.9
Borrowings – external20.4 10.9
Total borrowings21.3 11.8
Current0.2 0.2
Non-current21.1 11.6
Total borrowings21.3 11.8
The table below details the movement in borrowings during the period:
30 JUNE 202031 DECEMBER 2019
NZ$mNZ$m
UNAUDITEDAUDITED
Borrowings – related party:
Balance at 1 January0.9 0.9
Balance at period end0.9 0.9
Borrowings – external:
Balance at 1 January10.9 11.1
Repayments during the period(24.1)-
Drawdowns during the period34.4 -
Movement in foreign exchange(0.8)(0.2)
Balance at period end20.4 10.9
A schedule of all debt facilities is shown below:
EXPIRY DATE
CURRENT
LIMIT (m)
INTEREST RATEDEBT DRAWN (NZ$m)
FACILITY PROVIDERREASON FOR LOAN2020201920202019
ASB – revolving creditGeneral commercial/Future
acquisitions/SaaS project
Jan 2023NZ$52.01.44%3.81%17.310.9
ASB – overdraft Working capitalJan 2023NZ$2.04.83%6.08%--
HSBC – PPP loanWorking capitalMay 2025US$2.01.00%-3.1-
Total borrowings – externalNZ$57.120.410.9
Maccs Working capitalApr 2020€0.15.00%5.00%0.20.2
Share Dimension Working capitalJul 2022€0.45.00%5.00%0.70.7
Total borrowings – related party€0.5 0.90.9
A line fee of 1.0% is also paid on the credit limit of the ASB revolving credit facility.
14
Vista Group International Limited
15
Interim Report 2020
Notes to the financial statements
Continued
ASB loans:
On 31 January 2020, Vista Group entered into a refinancing arrangement with ASB. This facility was drawn upon in
2020 to provide additional cash certainty throughout the COVID-19 lockdown. It was partially repaid with the funds
raised from the April 2020 placement and rights issue.
All ASB facilities are secured by a general security agreement under which the bank has a security interest in Vista
Group’s tangible assets. Agreed covenants include:
• Gearing ratio of not greater than 2.5 times
• Interest cover of equal or greater than 3.0 times
• EBITDA of the charging group not being less than 80% of Vista Group.
In April 2020, ASB provided relief to the EBITDA of the charging group covenant with the new requirement being:
• 50% for the rolling 12 months to 31 December 2020
• 60% for the rolling 12 months between 1 January 2021 to 30 June 2021
• 70% for the rolling 12 months between 1 July 2021 to 31 December 2021
• 80% for the rolling 12 months from 1 January 2022.
Vista Group has been compliant with all covenants for both the current and prior reporting periods.
HSBC PPP loan:
The loan presented in the table above represents the full amount drawn down from HSBC Bank and will only
reduce when forgiveness under the PPP scheme has been granted. See section 3 for further details.
6. Trade and other receivables
30 JUNE 202031 DECEMBER 2019
NZ$mNZ$m
SECTIONUNAUDITEDAUDITED
Trade receivables 33.0 36.6
Accrued revenue 8.4 13.2
ECL provision (7.0)(1.2)
Revenue provision – concession discount
1
(2.4)-
Revenue provision – credit risk1(1.8)-
Revenue provision – maintenance1(1.8)-
Sundry receivables 5.5 3.8
Prepayments
2.7 3.4
Vista China acquisition deposit
0.4 0.4
Total trade and other receivables 37.0 56.2
Trade receivables
Included within trade receivables is a receivable from Vista China of $3.4m (31 December 2019: $0.9m).
Significant accounting judgement – ECL provision
As a result of the COVID-19 pandemic, there is a risk that Vista Group is not able to recover all trade receivables
and accrued revenues due to its customers’ financial distress, including where those customers suffer insolvency.
Accordingly, Vista Group applied the following judgement in determining the ECL provision at 30 June 2020.
Specific provision:
All customer invoices and accrued revenues have been reviewed with a specific provision made for customers that
are known to have liquidity/solvency issues, or where the debt is older than 180 days.
General provision:
Vista Group applies an ECL matrix to its trade receivables and accrued revenue to determine its general ECL
provision. This matrix was prepared using historical loss rates, updated to also include both the current and future
economic environment (both of which are largely unknown). Accordingly, at 30 June 2020 Vista Group applied
judgement by including a 15% insolvency risk for all Cinema or Movio segment customers.
To avoid double counting, both the specific and general ECL provisions are calculated after deducting the
associated amount recognised as a revenue provision (see section 1 for more details).
The ECL provision at 30 June 2020 was determined as follows:
30 June 2020
UNAUDITED
0-90 DAYS91-180 DAYS181-270 DAYS271-360 DAYS361+ DAYSTOTAL
NZ$mNZ$mNZ$mNZ$mNZ$mNZ$m
Trade receivables and accrued revenue22.0 12.4 4.2 1.5 1.3 41.4
Baseline0.1 0.2 0.1 0.1 0.1 0.6
Aging and write offs0.2 1.8 1.0 0.1 -3.1
Country, customer and market 0.1 0.1 ---0.2
ECL – general provision0.4 2.1 1.1 0.2 0.1 3.9
ECL – specific provision-0.2 1.4 0.3 1.2 3.1
Total ECL provision0.4 2.3 2.5 0.5 1.3 7.0
General provision effective rate1.8%16.9%26.2%13.3%7.7 %9.4%
31 December 2019
AUDITED
0-90 DAYS91-180 DAYS181-270 DAYS271-360 DAYS361+ DAYSTOTAL
NZ$mNZ$mNZ$mNZ$mNZ$mNZ$m
Trade receivables and accrued revenue41.93.82.60.80.749.8
Baseline0.1-0.1--0.2
Aging and write offs----0.10.1
Country, customer and market 0.1----0.1
ECL – general provision0.2-0.1-0.10.4
ECL – specific provision--0.10.30.40.8
Total ECL provision0.2-0.20.30.51.2
General provision effective rate0.5%-3.8%-14.3%0.8%
16
Vista Group International Limited
17
Interim Report 2020
Notes to the financial statements
Continued
Significant estimation uncertainty – Impairment of carrying value of investment in Vista China
Vista Group has reviewed its net investment in Vista China for objective evidence of impairment at 30 June 2020
and concluded this definition was met due to significant adverse effects in the Chinese cinema industry. For example,
all cinemas either have been, or continue to be, closed for an undetermined period of time during the COVID-19
pandemic. This has resulted in a decline of Vista China’s current cash inflows and Vista Group expect Vista China
to have sustained effects in their medium-term cash inflows as the business recovers from the pandemic.
Accordingly, an independent valuation of Vista China has been prepared by an external valuation expert using a
combined DCF and capitalisation of revenue method. This combined approach represents a fair value less costs to
dispose (FVLCD) methodology which uses level 3 fair value measurements. The key inputs applied by the external
valuation expert into the valuation models were:
• Revenue multiple: a range of 2.0x to 2.5x (31 December 2019: 4.0x to 5.0x), based on a comparison to Vista
Group’s historical trading multiples.
• Discount rate applied in DCF: a range of 13.0-16.0% (31 December 2019: 20.0-25.0%), based on authoritative
studies into the rates of return required by venture capital firms of China-based companies. The range has
declined as a higher exit multiple had been applied in previous years, whereas in the current period they have
been revised to a more conservative value given the current economic environment.
• Exit multiple applied in DCF terminal growth: 2.5x (31 December 2019: 4.8x), based on the upper end of the
revenue multiple range, as by 2030 Vista China is assumed to be well established in the Chinese market.
• Revenue CAGR applied in DCF: Between 2019 and 2030, the effective revenue CAGR is 3.5%.
A control discount of 10.0% and selling costs of 2.0% of Vista Group’s 47.5% stake were applied to the valuation
(31 December 2019: 10.0% and 2.0% respectively).
To be cautious in a time of such uncertainty, we applied judgement by applying the lower end of the valuation range.
The result of this external valuation was Vista Group’s equity accounted carrying value of Vista China ($28.3m)
exceeded its recoverable amount ($14.6m) by $13.7m and therefore a corresponding impairment charge has been
recognised in the income statement.
The external valuation and the impairment charge recognised are sensitive to a change in the above key inputs.
The following summarises the effect of a change in these key inputs, with all other assumptions remaining constant:
DOWNSIDE SCENARIOSUPSIDE SCENARIOS
BASE CASE
INPUT
APPLIED
SENSITISED
INPUT
APPLIED
IMPAIRMENT
CHARGE
INCREASED
IMPAIRMENT
CHARGE
SENSITISED
INPUT
APPLIED
IMPAIRMENT
CHARGE
INCREASED
IMPAIRMENT
CHARGE
NZ$mNZ$mNZ$mNZ$m
Revenue multiple2.25x1.75x14.71.02.75x12.6(1.1)
Discount rate14.5%16.0%14.10.413.0%13.1(0.6)
Exit multiple2.00x1.50x14.40.72.50x12.8(0.9)
Revenue CAGR3.5%2.5%13.90.24.5%13.3(0.4)
Proposed Vista China step acquisition
On 20 March 2020, Vista Group announced that it had cancelled the agreement to acquire a further 14.5% of Vista
China, which had previously been announced to the market on 20 December 2019.
Significant estimation uncertainty – impairment of carrying value of investment in Stardust
Vista Group has reviewed its net investment in Stardust for objective evidence of impairment at 30 June 2020
and concluded this definition was met due to significant financial difficulty in the joint venture. This is due to a
combination of the revenue streams yet to be commercialised; an unsuccessful search for external investors; the
current COVID-19 pandemic environment; and the reliance on existing shareholders to continue cash funding of
the business operations.
Due to the above objective evidence of impairment, Vista Group determined there were no reasonable valuation
techniques that would indicate this entity to have any value. Accordingly, Vista Group Board have taken a prudent
approach of determining the recoverable amount as $nil with an impairment charge of $1.3m being recognised on
the income statement at 30 June 2020.
Going forward, as this investment has no carrying value, Vista Group will discontinue recognising its share of future
Stardust losses.
Total provisioning
The below table highlights the proportion of total provisioning made against trade receivables and accrued revenue.
Vista Group believe that cumulative ECL and revenue provisions of 31.4% was a reasonable level to provide against
trade receivables and accrued revenue in such an uncertain time.
30 JUNE 202031 DECEMBER 2019
NZ$mNZ$m
UNAUDITEDUNAUDITED
Trade receivables and accrued revenue41.4 49.8
ECL provision7.0 1.2
Revenue provisioning:
Concession discount2.4 -
Maintenance1.8 -
Credit risk1.8 -
Total provisioning13.0 1.2
Total provisioning effective rate31.4%2.4%
Accrued revenue
The movement in accrued revenues during the period was as follows:
30 JUNE 202031 DECEMBER 2019
NZ$mNZ$m
UNAUDITEDAUDITED
Accrued revenue at 1 January13.2 4.9
Amounts included in opening balance released in the current period(8.9)(4.9)
Additional accrued revenue recognised at period end3.6 13.1
Exchange movements0.5 0.1
Accrued revenue at period end8.4 13.2
7. Investment in associates and joint ventures
Carrying value of associates and joint ventures
STARDUSTVISTA CHINA
30 JUNE 202031 DECEMBER 201930 JUNE 202031 DECEMBER 2019
NZ$mNZ$mNZ$mNZ$m
UNAUDITEDAUDITEDUNAUDITEDAUDITED
Opening net assets2.3 -20.8 24.6
Initial recognition of Stardust at 25 Feb 2019-3.2 --
Loss for the period(0.3)(0.9)(3.7)(2.3)
Dividends declared---(1.5)
Closing net assets2.0 2.3 17.1 20.8
Vista Group weighted average interest
for the period
51.0%55.9%47.5%47.5%
Vista Group’s share of closing net assets1.0 1.3 8.1 9.9
Goodwill0.3 0.2 20.2 20.2
Impairment charges(1.3)-(13.7)-
Carrying values-1.5 14.6 30.1
At 30 June 2020, the above carrying value of Stardust and Vista China equates to their recoverable amount.
18
Vista Group International Limited
19
Interim Report 2020
Notes to the financial statements
Continued
8. Goodwill
The amount of goodwill initially recognised is a function of the allocated purchase price to the fair value of the
identifiable net assets acquired. The determination of the net assets fair value, particularly intangible assets,
is to a considerable extent based on judgement.
A summary of movements in goodwill is detailed below:
30 JUNE 202031 DECEMBER 2019
NZ$mNZ$m
SECTIONUNAUDITEDAUDITED
Gross carrying amount
Balance at 1 January 73.5 67.5
Numero acquisition4(2.7)6.1
Exchange differences 1.5 (0.1)
Gross carrying amount at period end 72.3 73.5
Accumulated impairment
Balance at 1 January
(3.6)(3.6)
Impairment charges recognised during the period3, 9(11.6)-
Accumulated impairment at period end (15.2)(3.6)
Goodwill at period end 57.1 69.9
Goodwill has been allocated to the following cash generating units (CGUs):
30 JUNE 202031 DECEMBER 2019
NZ$mNZ$m
UNAUDITEDAUDITED
Vista Entertainment Solutions Limited (VESL)25.3 24.4
Virtual Concepts Limited (Movio)17.0 17.0
MACCS International BV (Maccs)5.8 12.3
Share Dimension BV (Cinema Intelligence)2.0 1.9
Powster Limited (Powster)6.2 7.6
Flicks.co.nz Limited (Flicks)0.2 0.6
Numero Limited (Numero)0.6 6.1
Goodwill at period end57.1 69.9
The above CGUs are business operations at their lowest level where goodwill is monitored for internal management
reporting purposes. Value in use (VIU) calculations are used in determining the recoverable amount of each CGU.
Cash flows were projected based on a 5-year business model for each CGU, including Board approved 2020 budgets.
Determination of appropriate post-tax cash flows, terminal growth rates and discount rates for the calculation of
VIU is subjective and requires significant judgement to determine the growth in revenue and EBITDA, timing and
quantum of future capital expenditure, working capital, long-term growth rates and the selection of discount
rates to reflect the risks involved.
Summarised financial position
A summarised statement of financial position of Vista Group’s material associates and joint ventures at 30 June 2020
is presented below:
VISTA CHINA
30 JUNE 202031 DECEMBER 2019
NZ$mNZ$m
UNAUDITEDAUDITED
Cash10.0 12.6
Trade and other receivables14.8 14.4
Total current assets24.8 27.0
Total non-current assets2.6 3.0
Total assets27.4 30.0
Total current liabilities(8.2)(7.9)
Total non-current liabilities--
Total liabilities(8.2)(7.9)
Effect of translation(2.1)(1.3)
Net assets17.1 20.8
Summarised trading results
A summarised statement of comprehensive income of Vista Group’s material associates and joint ventures,
and a reconciliation to the equity accounted losses recognised in Vista Group is detailed below. Unless stated
otherwise, all profits/losses are derived from continuing operations and there was no movement in other
comprehensive income. Adjustments have been applied to align the associate and joint venture company
accounting policies to those of Vista Group.
VISTA CHINA
30 JUNE 202030 JUNE 2019
NZ$mNZ$m
UNAUDITEDUNAUDITED
Revenue3.3 9.1
Total expenses(7.0)(10.4)
Loss for the period(3.7)(1.3)
Vista Group equity accounted interest47.5%47.5%
Vista Group share of equity accounted losses for the period(1.8)(0.6)
For the period ended 30 June 2020, the total equity accounted losses from associates were $1.9m and includes
$0.1m from Stardust (30 June 2019: $1.0m includes $0.3m from Stardust and $0.1m from Numero).
20
Vista Group International Limited
21
Interim Report 2020
Notes to the financial statements
Continued
9. Impairment testing of goodwill
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 (i.e. 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 reviewed each of its CGUs for indicators of impairment at 30 June 2020. Due to all cinemas
worldwide being closed during the COVID-19 pandemic for an undetermined period of time and the reduction in
Vista Group’s market capitalisation, Vista Group were required to complete an impairment review at 30 June 2020.
Vista Group applied judgement in determining that a VIU method for each CGU would result in a higher
recoverable amount than a FVLCD as:
• Willing buyers appear to demand a discount in the current pandemic economic environment.
• A discounted cashflow basis was used to determine the FVLCD, whereby inputs into the VIU models are adjusted
for how an external market participant may restructure and scale the CGU. However, in all cases it was determined
the recoverable amount from the VIU was higher than the FVLCD.
Accordingly, Vista Group have determined the recoverable amount of all CGUs would equate to their VIU with:
• Cash flows projected based on management approved 5-year business models for each CGU, including Board
approved 2020 forecasts.
• Discount rate determined by an independent adviser using the Capital Asset Pricing Model (CAPM)
methodology of determining the weighted average cost of capital (WACC), using market specific inputs.
• Long-term growth rate determined by an independent adviser as the 2024 consumer price inflation (CPI)
of the country each CGU is headquartered (source: The Economist Intelligence Unit).
• Terminal growth being calculated at 30 June 2025 applying the long-term growth rate.
The key assumptions applied to each CGU are as follows:
CGU
5-YEAR REVENUE CAGRPRE-TAX WACCLONG-TERM GROWTH RATE
JUN-2020 VIUDEC-2019 VIUJUN-2020 VIUDEC-2019 VIUJUN-2020 VIUDEC-2019 VIU
UNAUDITEDAUDITEDUNAUDITEDAUDITEDUNAUDITEDAUDITED
VESL5.9%10.7%14.8%12.8%2.0%2.5%
Movio6.3%17.0%15.5%13.3%2.0%2.5%
Flicks9.0%14.3%17.4%16.1%2.0%2.5%
Maccs6.9%10.9%15.2%14.1%2.0%2.5%
Powster6.2%12.6%15.2%16.4%1.5%2.5%
Cinema Intelligence13.2%26.3%15.8%14.6%2.0%2.5%
Numero15.5%20.7%17.2%17.5%2.0%2.5%
CGUs resulting in an impairment charge
Each of the above CGUs have been impacted by the COVID-19 pandemic, as all cinemas either have been, or continue
to be, closed for an undetermined period. On top of this, for cinemas reopening, they are facing the added challenge
of new blockbuster movie titles being delayed.
CGU
CARRYING
VALUE
RECOVERABLE
AMOUNT (VIU)
IMPAIRMENT
CHARGE
Flicks0.7 0.3 0.4
Maccs
16.3 9.2 7.1
Powster12.3 11.0 1.3
Numero6.5 3.7 2.8
Total35.8 24.2 11.6
With cinemas not able to function to capacity, the pandemic has directly impacted all parts of the cinema industry.
For each of the above CGUs, their short-term revenue streams have been directly impacted through lower demand
from cinemas, studios and distributors.
For the medium-term, Vista Group have taken a cautious approach in forecasting the recovery of the cinema
industry, with the continued risk of future cinema closures through additional waves of the coronavirus. Vista
Group will continue to observe the cinema industry throughout this time period and adapt where ever possible
to ensure the continued effects of the pandemic are mitigated, similar to the actions we have already taken to
date (see section 15).
Sensitivity testing
Based on previous experience, Vista Group applied judgement in determining a reasonably possible change in
the key assumptions in the VIU models. The additional CGUs that would result in a potential impairment scenario
are as follows:
CGU
AMOUNT THE
VIU EXCEEDS
CARRYING
VALUE ($m)
INPUT REQUIRED FOR THE VIU TO EQUATE
TO THE RECOVERABLE AMOUNT
5-YEAR
REVENUE CAGR
PRE-TAX
WACC
LONG-TERM
GROWTH RATE
VESL70.1 4.5%Not sensitiveNot sensitive
Movio24.2 4.0%Not sensitiveNot sensitive
Cinema Intelligence0.7 12.7%18.7%Not sensitive
For the CGUs that recognised an impairment charge in the current period, their respective carrying values
now equate to their VIU. This means they are all sensitive to any adverse change in the key assumptions. As an
illustrative example, the below table shows the impact of a 1.0% reduction in the revenue CAGR and long-term
growth rates, and a 1.0% increase in the pre-tax WACC.
CGU
5-YEAR REVENUE CAGRPRE-TAX WACCLONG-TERM GROWTH RATE
DECREASED RATE
REVISED
IMPAIRMENT
CHARGE ($m)INCREASED RATE
REVISED
IMPAIRMENT
CHARGE ($m)DECREASED RATE
REVISED
IMPAIRMENT
CHARGE ($m)
Flicks8.0%0.8 18.4%0.4 1.0%0.4
Maccs5.9%10.7 16.2%8.0 1.0%7.8
Powster5.2%7.6 16.2%2.2 0.5%2.0
Numero14.5%3.7 18.2%3.1 1.0%3.0
22
Vista Group International Limited
23
Interim Report 2020
Notes to the financial statements
Continued
10. Other intangible assets
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
• the expenditure attributable to the software product during its development can be reliably measured.
Significant accounting judgement – Impairment of internally generated software
Vista Group reviewed all internally generated software assets for impairment at 30 June 2020. When doing so,
the recoverable amount of each asset is estimated as the future economic benefits they are expected to derive,
which requires significant judgement. The delta between the recoverable amount and the carrying value of each
asset has been recognised as an impairment charge at 30 June 2020.
The recoverable amount for the portion of internally generated software which an impairment charge has been
recognised is $1.9m. The discount rate applied in present valuing was 2.4%, which equated to Vista Group’s cost
of ASB debt (inclusive of the line fee).
30 June 2020
UNAUDITED
INTERNALLY
GENERATED
SOFTWARE
SOFTWARE
LICENSES
INTELLECTUAL
PROPERTY
CUSTOMER
RELATIONSHIPSTOTAL
SECTIONNZ$mNZ$mNZ$mNZ$mNZ$m
Gross carrying amount
Balance at 1 January
27.5 2.5 2.4 5.5 37.9
Additions 7.5 ---7.5
Numero acquisition4-2.4 0.3 1.3 4.0
Impairment charges (2.2)---(2.2)
Exchange differences
-(0.1)-0.3 0.2
Balance at period end32.8 4.8 2.7 7.1 47.4
Accumulated amortisation
Balance at 1 January (4.6)(1.3)(1.4)(3.2)(10.5)
Amortisation (2.9)(0.1)(0.2)(0.5)(3.7)
Impairment charges 0.5 ---0.5
Exchange differences 0.1 --(0.2)(0.1)
Balance at period end(6.9)(1.4)(1.6)(3.9)(13.8)
Carrying amount at 30 June 202025.9 3.4 1.1 3.2 33.6
31 December 2019
AUDITED
INTERNALLY
GENERATED
SOFTWARE
SOFTWARE
LICENSES
INTELLECTUAL
PROPERTY
CUSTOMER
RELATIONSHIPSTOTAL
NZ$mNZ$mNZ$mNZ$mNZ$m
Gross carrying amount
Balance at 1 January17.7 2.6 2.2 4.9 27.4
Additions
11.7 -0.2 0.7 12.6
Disposals – deconsolidation of Stardust
(1.9)---(1.9)
Exchange differences
-(0.1)-(0.1)(0.2)
Balance at year end27.5 2.5 2.4 5.5 37.9
Accumulated amortisation
Balance at 1 January(1.9)(1.3)(1.0)(2.7)(6.9)
Amortisation(2.7)(0.2)(0.4)(0.4)(3.7)
Exchange differences-0.2 -(0.1)0.1
Balance at year end(4.6)(1.3)(1.4)(3.2)(10.5)
Carrying amount at 31 December 201922.9 1.2 1.0 2.3 27.4
At 31 December 2019, the fair value of the acquired net assets of Numero was provisional. In the current period,
the intangible assets of Numero have been reclassified from goodwill (see section 4 for further details).
11. Provisions
A summary of movements in provisions is detailed below:
30 JUNE 202031 DECEMBER 2019
NZ$mNZ$m
SECTIONUNAUDITEDAUDITED
Balance at 1 January0.6 0.5
Organisation restructuring provision
3
1.6 -
Movement in lease dilapidation provision0.1 0.1
Other movements0.1 -
Total provisions at period end
2.4 0.6
Total provisions are represented by:
30 JUNE 202031 DECEMBER 2019
NZ$mNZ$m
UNAUDITEDAUDITED
Current2.3 -
Non-current0.1 0.6
Total provisions 2.4 0.6
On 4 June 2020, Vista Group announced it commenced consulting with staff around a proposed organisation
restructure. The consultation phase concluded after balance date, at which point the associated redundancy costs
were settled.
24
Vista Group International Limited
25
Interim Report 2020
Notes to the financial statements
Continued
12. Capital structure
Contributed equity
During 2020, 62,217,222 shares were issued (31 December 2019: 861,704). The following reflects the allocation
of these shares:
MILLIONS OF SHARESNZ$m
30 JUNE 202031 DECEMBER 201930 JUNE 202031 DECEMBER 2019
UNAUDITEDAUDITEDUNAUDITEDAUDITED
Shares issued and fully paid:
Beginning of the period166.4 165.5 61.8 59.4
Ordinary shares issued during the period:
2020 placement and rights issue (net of costs)61.9 -62.4 -
Employee incentives0.3 0.9 0.8 2.4
Total contributed equity at period end228.6 166.4 125.0 61.8
On 16 April 2020, Vista Group announced a $25.0m placement and a 1 for 4.37 rights issue, which cumulatively
resulted in 61,946,951 additional ordinary shares being issued at $1.05 per share. The combined impact was that
Vista Group raised a total of $65.1m, before $2.7m expenses, and as a result Vista Group’s share capital increased
by $62.4 million.
Share-based payments
The total share-based payment expense recorded during the period was a credit balance of $0.3m (30 June 2019:
debit balance of $1.7m). The amount recognised in 2020 has reduced to a credit balance due to the performance
targets of most schemes no longer being considered as likely to be achieved.
Earnings per share
UNAUDITED
NUMBER OF SHARES (MILLIONS)
30 JUNE 2020
30 JUNE 2019
RESTATED
Weighted average ordinary shares for basic earnings per share198.7 180.3
Effect of dilution:
Share options and awards1.1 1.8
Weighted average ordinary shares adjusted for the effect of dilution199.8 182.1
(Loss)/profit attributable to owners of the parent (NZ$m)(42.4)4.0
Basic earnings per share (cents)($0.21)$0.02
Diluted earnings per share (cents)
1
($0.21)$0.02
1. Shares are only treated as dilutive when their conversion would decrease basic earnings per share.
On 16 April 2020, Vista Group issued 61,946,951 new ordinary shares of $1.05 each through a placement and rights
issue. Accordingly, the number of shares previously used to calculate basic and diluted earnings per share have
been amended in the table above. A bonus factor of 1.0870 has been applied, based on the ratio of:
• an adjusted closing share price of $1.4900 per share on 20 April 2020, the business day before the shares
started trading ex-rights; and
• the theoretical ex-rights price at that date of $1.3708 per share.
Prior to this restatement, the basic and diluted earnings per share for the period ended 30 June 2019 were also
$0.02 per share.
Financial instruments by category
FINANCIAL
ASSETS AT
AMORTISED COST
FINANCIAL
INSTRUMENTS
AT FAIR VALUE
THROUGH PROFIT
OR LOSS
FINANCIAL
LIABILITIES AT
AMORTISED COST
TOTAL CARRYING
VALUE
NZ$mNZ$mNZ$mNZ$m
At 30 June 2020
UNAUDITED
Cash96.0 - -96.0
Trade receivables20.0 - -20.0
Sundry receivables4.5 - -4.5
Total financial assets120.5 - -120.5
Borrowings – related party - -0.9 0.9
Borrowings – external - -20.4 20.4
Trade payables - -2.5 2.5
Sundry payables - -6.1 6.1
Lease liabilities - -21.5 21.5
Contingent consideration -0.4 -0.4
Provisions -1.7 -1.7
Total financial liabilities -2.1 51.4 53.5
At 31 December 2019
AUDITED
Cash19.5 - -19.5
Trade receivables35.4 - -35.4
Sundry receivables2.9 - -2.9
Total financial assets57.8 - -57.8
Borrowings – related party - -0.9 0.9
Borrowings – external - -10.9 10.9
Trade payables - -0.3 0.3
Sundry payables - -5.6 5.6
Lease liabilities - -23.5 23.5
Contingent consideration -0.4 -0.4
Total financial liabilities -0.4 41.2 41.6
Vista Group’s financial instruments that are measured subsequent to initial recognition at fair values are grouped
into levels based on the degree to which the fair value is observable:
Level 1 Fair value measurements derived from quoted prices in active markets for identical assets.
Level 2 Fair 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 3 Fair value measurements derived from valuation techniques that include inputs for the asset or liability
which are not based on observable market data.
During the current period, there have been no transfers between fair value measurement levels or changes in the
valuation methods used to determine the fair value of Vista Group’s financial instruments.
26
Vista Group International Limited
27
Interim Report 2020
Notes to the financial statements
Continued
13. General information
Vista Group International Limited (the ‘Company’ and its subsidiaries, collectively ‘Vista Group’) 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 principal activity of Vista Group is the sale, support and associated development of software for the film industry.
These consolidated interim financial statements are not audited and were approved for issue on 27 August 2020.
14. Basis of preparation of half year interim report
The consolidated interim 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. They comply with NZ IAS 34 Interim Financial Reporting. The interim financial
statements do not include all the notes of the type normally included in the Annual Report. Accordingly, this report
is to be read in conjunction with the Annual Report for the financial year ended 31 December 2019.
The accounting policies and methods of computation and presentation adopted in the consolidated interim
financial statements are consistent with those described and applied in the Annual Report for the year ended
31 December 2019.
Taxes on income in the interim periods are accrued using the tax rate that would have been applicable to expected
total annual profit or loss.
15. Other disclosures
COVID-19 pandemic
On 11 March 2020, the World Health Organization declared a global pandemic as a result of the outbreak and
spread of COVID-19. Following this, governments worldwide were forced to order all non-essential businesses,
such as cinemas, to be closed. The shutdown has severely impacted Vista Group’s trading and will continue to
have an impact until cinemas are able to open in a meaningful way. Vista Group continues to assess the likely
impact on the business from the rapidly evolving pandemic situation.
An assessment of the impact of the pandemic on Vista Group’s balance sheet is set out below, based on information
available at the time of preparing the financial statements:
BALANCE SHEET ITEMCOVID-19 ASSESSMENTSECTION
Cash/borrowingsCash balances have increased due to the rights issue completed in April
2020, along with the drawing down of banking facilities.
5, 12
Trade and other receivablesVista Group has increased the provision for ECL and revenue provisions
to reflect expected financial difficulties of customers.
6
Investments in associates
and joint ventures/goodwill
Vista Group has considered the impacts of COVID-19 in the assumptions
used in the carrying value assessment of Vista China, Stardust and all
goodwill CGUs. As a result, impairment charges have been recognised.
7-9
Other intangible assetsVista Group performed a review of the carrying value of internally
generated software, which is held at cost. As a result, impairment
charges have been recognised.
10
ProvisionsOn 4 June 2020, Vista Group announced it commenced consulting with
staff around a proposed organisation restructure. The consultation phase
concluded after balance date, at which point the associated redundancy
costs were settled. As a result, provisions were recognised at 30 June
2020 for the staff affected by the proposed organisation restructuring.
11
Going concern
There are inherent uncertainties in all markets relating to the impact of continued cinema closures, delayed film
content and the deterioration in general economic conditions. Accordingly, the Board consider it appropriate to
take a cautious outlook on the cinema industry.
At the date of signing these financial statements, Vista Group had put in place significant initiatives to protect
the health and safety of the employees and the financial strength of the Group, including:
• Vista Cinema has released the Cinema Re-opening Kit to strong demand – with the Dynamic Social Distance
seating capability very popular.
• Movio launched Movio Research 2.0 in the United States, United Kingdom and Australia, focused on increased
self-service and capability for studios.
• Vista Cinema has worked with cinemas in the United States to re-configure mobile apps to enable their customers
to purchase popcorn and other items through kerb-side pickup.
• Vista Cinema has partnered with a local New Zealand company (Shift72) to enable cinemas to implement their
own branded TVOD (Transactional Video on Demand) platforms, with customers already live in the United
States and New Zealand.
• Movio has launched ‘tea with Movio’ – a weekly webinar series around best practice in movie marketing.
• Successfully completing a $65 million capital raise, with excellent support from its existing institutional and
retail shareholders.
• The Board and Chief Executive Officer voluntarily reducing their remuneration by 30% along with the senior
leadership team voluntarily reducing their salaries by 25%.
• Over 80% of Vista Group’s employees volunteering to work reduced hours for reduced pay.
• Applying for and receiving government relief for its businesses in New Zealand, Australia, United States,
United Kingdom and the Netherlands.
• Cancelling the 2019 final dividend and terminating the agreement to acquire a further 14.5% stake in Vista China.
• Implementing hiring and salary freezes and terminating engagement with all non-essential contracting resources.
• Undertaking consultation with staff around a proposed new structure for Vista Group’s core businesses.
At 30 June 2020, Vista Group had cash balances totaling $96.0m, along with $36.7m undrawn on its ASB revolving
credit facility. Forecasts show that this level of cash and undrawn loans will be sufficient for Vista Group to
comfortably remain within its agreed banking covenants for the next twelve months.
The Board believe that the actions taken, current cash levels and the continued support of ASB Bank ensures that
Vista Group can continue to adopt a going concern basis of accounting for a period of at least twelve months from
the date of these financial statements being issued.
2019 final dividend
On 27 February 2020, the Board approved a fully imputed dividend of 2.10 cents per share. Subsequent to the issue of
the financial statements, on 17 March 2020 Vista Group announced it had cancelled payment of the 2019 final dividend.
Events after balance date
Restructuring:
Consultation for the core business organisation restructuring in New Zealand and United Kingdom concluded on
31 July 2020, which resulted in a restructuring cost of $1.6m (fully provided at 30 June 2020). Further core business
organisation restructuring both commenced and concluded after balance date in the United States, resulting in
approximately $0.4m additional restructuring cost that will be recognised in the second half of 2020. Vista Group
anticipate annual savings in salaries of approximately $15.0m, the top end of the $12.0m – $15.0m forecast range.
NZ wage subsidy:
In July 2020, Vista Group received $1.4m from the New Zealand COVID-19 Wage Subsidy Extension.
Auckland lease:
Vista Group have agreed a 5-year property lease through to July 2025 in Auckland, with these premises estimated to
be available for use in October 2020. Should these premises have been available on 30 June 2020, Vista Group would
have recognised a lease asset of $6.7m, a current lease liability of $nil and a non-current lease liability of $6.6m.
Interim dividend:
The Board has resolved that an interim dividend will not be paid in 2020.
28
Vista Group International Limited
29
Interim Report 2020
Notes to the financial statements
Continued
Vista Group International Limited
Level 3, 60 Khyber Pass Road
Newton, Auckland 1023
Phone: +64 9 984 4570
Email: info@vistagroup.co.nz
Website: www.vistagroup.co
Related parties
Related parties are materially consistent with those disclosed in the 2019 Annual Report. The following table
represents transactions with related parties excluding key management personnel.
AMOUNTS OWED BY RELATED PARTIESAMOUNTS OWED TO RELATED PARTIES
30 JUNE 202031 DECEMBER 201930 JUNE 202031 DECEMBER 2019
NZ$mNZ$mNZ$mNZ$m
UNAUDITEDAUDITEDUNAUDITEDAUDITED
Associates and joint ventures
1
3.4 1.0 (0.6)(0.5)
Vista Group’s associate and joint venture related party transactions were as follows:
ASSOCIATES AND JOINT VENTURES
1
30 JUNE 202031 DECEMBER 2019
NZ$mNZ$m
UNAUDITEDUNAUDITED
Receiving of services(0.5)(0.8)
Rendering of services3.0 0.9
Dividends received
2
-0.7
Interest on loan balances-(0.2)
Vista China acquisition deposit-(0.4)
Total related party transactions2.5 0.2
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 in 2019, $0.4m had been received in cash by 31 December 2019 and 30 June 2020.
The remaining balance was held as a related party receivable.
Details of significant related party transactions of Vista Group:
• During the period, Vista Group recognised $1.1m of maintenance revenue from Vista China (30 June 2019: $1.0m)
which is recognised in the corporate segment. At the end of the period, $1.1m remains as deferred revenue
(31 December 2019: $nil).
Details of significant related party transactions of Vista China:
• On 30 January 2019, Vista China provided a retention accommodation loan of $4.4m (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.
• On 23 December 2019, Vista China provided a shareholder loan of $3.0m (RMB14.3m) to WePiao. This loan is
repayable on 23 December 2020.
Contingent liabilities
There were no contingent liabilities for Vista Group at 30 June 2020 (31 December 2019: $nil).
Capital commitments
There were no capital commitments for Vista Group at 30 June 2020 (31 December 2019: $nil).
30
Vista Group International Limited
Notes to the financial statements
Continued
---
2020 HALF YEAR RESULTS
27 August 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
3
VISTA GROUP SUMMARY
KIMBAL RILEY
GROUP CHIEF EXECUTIVE
FINANCIAL RESULTS
MATT CAWTE
CHIEF FINANCIAL OFFICER
OPERATIONAL HIGHLIGHTS
KIMBAL RILEY
GROUP CHIEF EXECUTIVE
WILL PALMER
CHIEF EXECUTIVE, MOVIO
OUTLOOK
Q+A
4
VISTA GROUP 1ST HALF SUMMARY
Resilient Vista Navigates Pandemic in Strong Position
•Group balance sheet in good shape, with $96m of cash at June 30
•Q1 in-line with our guidance on growth (13-18%)
•Q2 cash collections exceeded expectations despite almost all cinemas being closed
•Operating cash flow in H1 up 123% over PCP
•Acted early, acted decisively (details on next slide)
•Focused on supporting our people
•Focused on supporting our customers -relationships strengthened –underscores relevance to our customers
•Innovation delivered solutions to customers for post-COVID world
•Cinema re-opening now widespread on all continents – with operating restrictions
•While COVID-19 had considerable impact on customers we have seen limited ‘permanent’ customer consequences to date.
5
PANDEMIC - ACTED EARLY, ACTED DECISIVELY
•Successfully completed aNZD$62.4 million capital raise, with excellent support from existing institutional and retail
shareholders
•Directors, CEO and Senior Leadership team voluntarily reduced their remuneration, plus over 80% of Vista Group’s
employees volunteered to work reduced hours for reduced pay
•Secured government relief in New Zealand, Australia, the USA, the UK and the Netherlands
•Cancelled the 2019 final dividend
•Terminated the agreement to acquire a further 14.5% stake in Vista China
•Reviewed the carrying values of all Group companies resulting in non-cash impairment charges
•Strong cost reduction achieved
•Implemented hiring and salary freezes and terminated engagement with all non-essential contracting resources
•Restructured core businesses leading to annualisedcost savings of $15m (top end of target $12-15mrange).
6
FINANCIAL RESULTS
7
FINANCIAL HIGHLIGHTS
TOTAL REVENUE
$45m
-34%
OPERATING PROFIT
-$15m
OPERATING CASHFLOW
$17m
+123%
RECURRING REVENUE
$33m
-21%
EBITDA
1
-$7m
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 charges, restructuring costs and
share of equity accounted results from associate and joint ventures.
8
n/a
n/a
TRADING PERFORMANCE
•EBITDA
1
includes $7.6m non-
cashprovision for revenue credit risk
andexpected credit loss
•Recurring revenue down 21%
•Non-recurring revenue down 54%
•$28.5m non-cash impairment charges
on investments, associates,
intangibles and leased assets
•No short or long-term incentive costs
in first half.
1
EBITDA is a non-GAAP measure and is defined as
earnings before net finance costs, income tax, depreciation
and amortisation, acquisition expenses, capital
gains/losses, impairment charges, restructuring costs and
share of equity accounted results from associate and joint
ventures.
9
NZ$M (Six Months Ended – Unaudited)30 Jun202030 Jun2019% Change
Revenue44.867.5-34%
Expenses(52.7)(55.7)-5%
Foreign exchange gains1.4-
EBITDA
1
(6.5)11.8-155%
Depreciation and amortisation(8.2)(3.8)116%
OPERATING (LOSS) / PROFIT(14.7)8.0-284%
Net finance costs(1.1)(0.4)
Other (incl. impairment, restructure and share of
associates)
(32.1)(1.4)
(LOSS) / PROFIT BEFORE TAX(47.9)6.2
Net (loss) / profit attributable to Vista Group
Shareholders
(42.4)4.0
COVID-19 AND REVENUE
Revenue
•Recurring revenue down 21%
•Product revenue down $2.1m
•Maintenance revenue down $5.0m
•Non-recurring revenue down 54%
•Product revenue down $11.9m (Cinema $10.4m)
•Services and Development revenue down $1.8m
•Revenue provision for credit risk of $1.8m (in addition to expected credit loss of $5.8m in expenses).
10
COVID-19 AND COSTS
Costs
•Salary sacrifice by Board, executives, and staff 20-30% through Q2
•Wage subsidies in H1 $6m within costs (NZ, Australia, USA, UK and Netherlands)
•Non-salary costs down $3m (primarily marketing and travel)
•Re-organisationsavings in salaries annualised$15m (top end of $12-15m range).
Non-cash items in EBITDA
•$5.8m expected credit loss (ECL) increase.
Non-cash impairment charges outside EBITDA – total $28.5m
•$11.6m subsidiaries (Maccs $7.1m, Numero$2.8m, Powster$1.3m, Flicks $0.4m)
•$13.7m Vista China
•$1.3m Stardust
•$1.9m internal development and lease assets.
11
OPERATING SEGMENTS
•Core revenue (Cinema and Movio)
significantly impacted by COVID-19
•Cinema non-recurring revenue
(primarily license sales) down 57%
•Moviorecurring revenue holds up well
•Maccs resilient – down only 7%.
30 June 2020
NZ$MCinemaMovio
Additional
Group
Companies
CorporateTotal
Revenue28.68.07.11.144.8
EBITDA
1
(3.5)(0.2)(0.1)(2.7)(6.5)
EBITDA % of revenue-12%-3%-1%-15%
30 June 2019
NZ$MCinemaMovio
Additional
Group
Companies
CorporateTotal
Revenue47.111.67.81.067.5
EBITDA
1
14.72.30.6(5.8)11.8
EBITDA % of revenue31%20%8%17%
Revenue growth-39%-29%
2
-9%-34%
12
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 charges, restructuring costs and
share ofequity accounted results from associate and joint
ventures.
2
Excludes intercompany eliminations in prior period.
FINANCIAL POSITION
•Strong balance sheet maintained
•Good cash position $96m
•Raised $62.4m in placement and
rights issue
•Reduced receivables due to lower
billing in Q2 better than expected
collections and increased credit risk
and expected credit loss provisions
•Non-current assets down due to non-
cash impairment charges
•Liabilities up in payables and Group
borrowings.
13
NZ$M (For the Period Ended - Unaudited)30 Jun202031 Dec2019% Change
Cash96.019.5392%
Other Current Assets37.858.2-35%
Non-Current Assets142.2165.9-14%
Current liabilities50.444.513%
Non-Current liabilities42.835.620%
NET ASSETS / TOTAL EQUITY182.8163.512%
COVID-19 AND BALANCE SHEET
Equity Raise
•Raised $62.4m in placement and rights issue
•Well supported by existing retail and institutional holders.
Debt
•Secured increased bank facility support
•Drew down funds, held over at 30 June to increase cash and provide flexibility.
Cash and Debtors
•Cash of $96m
•Debtors lower due to reduced invoicing and better than anticipated collections
•>40% of debtors outstanding is > 90 days and expect some further aging until full re-opening
•Provisions for collectability made.
14
COVID-19 AND CUSTOMERS
Customers
•Proving resilient with no material customer in liquidation or insolvency
•Circa 75 marginal cinema sites closed by customers
•Supported Vista with better than expected payment of invoices
•Strong uptake of new COVID related innovation – social distance seating etc.
15
CASH FLOW
•Strong Q1 and better than forecast Q2
collections
•Working capital down versus prior
year
•COVID related cash support from
local and international governments –
including timing differences
•Investment in internally generated
software lower than forecast with
reduced activity, focus on SaaS and
reduction in contractors and
outsourced partners
•Raised $62.4m in placement and
rights issue
•Dividend payments have been
suspended
•Reduced cash draw.
16
NZ$M(Six Months Ended – Unaudited)30 Jun 202030 Jun 2019% Change
Receipts from customers57.674.4-23%
Payments to suppliers & staff(49.3)(60.5)19%
Tax & interest0.8(6.4)
Operating COVID related wage subsidies (NZ,
Australia, UK, the Netherlands)
3.8-
Operating COVID related tax deferrals3.8-
Cash flow from operating activities16.77.5123%
Investments in internally generated software and
other intangibles
(7.5)(5.8)-29%
Other investing activities(0.5)(5.2)
Cash flow from financing activities66.0(6.1)
Financing COVID related support (US)3.1-
NET MOVEMENT IN CASH HELD77.8(9.6)
Foreign exchange differences(1.3)-
CASH BALANCE96.024.8287%
OPERATIONAL HIGHLIGHTS
17
CINEMA SEGMENT
Vista Cinema provides cinema management software to the world’s largest cinema exhibitors
•Cinema reopening kit produced – innovation continues.
•Odeon UK (120 sites of a total of 350 sites in Europe) rollout proceeding
•Most customers not open March-July due to COVID-19
•Protected recurring revenue streams (primarily Maintenance)
•New customers in EMEA – approx. 50 sites being implemented
•Enterprise market share (excluding China) estimated to remain at 51% – net of additions and closures
(see table)
•Veezismall net gain in sites (after suspensions and closures)
•Limited new license and project sales.
-$3.5mEBITDA
18
$28.6M
REVENUE
GROWTH -39%
EBITDA
Site Count
Veezi(non-China)
31 Dec
2019
New Sites
Closures /
Losses
30 Jun
2020
VeeziSites97495(64)1,005
Site Count
Enterprise (non-China)
31 Dec
2019
New Sites
Closures /
Losses
30 Jun
2020
Rest of the World5,46242(79)5,425
India1,49672-1,568
TOTAL (non-China)6,958114(79)6,993
UPDATE ON VISTA CINEMA SAAS TRANSFORMATION
19
How does the
future look? Has
it changed?
Digital
+
Operational
Digital
H1 2021
Operational
2022
On Budget
Digital = moviegoer experience (web, mobile, kiosk)
Operational = infrastructure and exhibitor management suite
Reviewed PrioritiesModified TimelinesConsulted our
customer base
UPDATE ON VISTA CINEMA SAAS TRANSFORMATION
•Project is on track and progressing well
•Based on the impact of COVID-19 and research on customers priorities (spending priorities) we have brought forward some
elements of the project to align to these priorities
•This will provide some increased opportunity of revenue and bring many clients into the SaaS environment in a staged
approach
•Focus on helping customer with business opportunities (Digital) such as kiosk, mobile, ticketing, staffing efficiencies
•Maintaining overall plan for back office (Operational) support
•Timeline extended by 6-9 months - but overall cost estimates remain on original spend estimates.
Movio Cinema
•Global footprint now 87
exhibitors across 58 countries
•Commenced build of Cinema
Essentials, a light touch/lower
support offering for small to
medium customers.
Global leader in data-driven marketing, providing products and
services to exhibitors, studios and film advertising specialists.
-14%
Research revenue
2020H1 vs 2019H1
41%
Growthin Connected
Moviegoers since 2019H1,
to 12.7M globally
1.3b
Connections sent
(emails, SMS, push),
down 2% on 2019H1
2018H12019H12020H1
Cinema6.17.05.5
Research0.92.11.8
Media1.52.10.7
Core Revenue8.511.28.0
Eliminations0.40.4—
Reported8.911.68.0
1
Connected Moviegoers are a subset of Active Moviegoers available for digital campaigns. Active Moviegoers have purchased at least one ticket to a movie
from a participating exhibitor during the recent 12 month rolling period.
2
MADEX is the market brand for the Moviegoer Data Platform.
Movio Research
•Rapid migration of all existing
US customers to new Research
2.0 platform and completed
build for UK and Australia
launch post lockdown
•Successful completion of trial
measurement campaigns with
Google and Hulu to determine
effectiveness of film advertising.
MovioMedia
•Direct and digital campaigns
have been deferred since
March, awaiting films to be
released by Studios
•MADEX
2
has launched in
Australia with the support of
multiple exhibitors and film
distributors. Initial campaigns
to be deployed post lockdown.
$8.0M
Core Revenue
-29% vs 2019H1
-$0.2M
EBITDA
Revenue Breakdown ($M NZD)
21
ADDITIONAL GROUP COMPANIES
MACCS
Provides world leading theatrical distribution
software
•Cushioned impact from COVID-19
•Revenue down 7%
•Cost management in place
•New customers signed up to MICA
POWSTER
World leading film marketing products
•Revenue down 34%, primarily due to lower
showtimes revenue
•Cost management in place
•Extending non-film industry engagements
(music, streaming)
FLICKS
Movie and cinema review and showtime guide
•Revenue down 12%
•Reduced advertising spend
•Expansion into coverage of streaming
completed
NUMERO
Box Office Reporting
•Good H1 revenue
•Sony International engagement drives further
geographic expansion
22
-$0.1m
$7.1M
REVENUE GROWTH -9%
EBITDA
ASSOCIATE COMPANIES
China film industry update
•Cinemas closed on January 26
•2020 box office in China significantly
impacted by COVID-19 pandemic
•Cinema re-opening approved from July 20 –
roughly 2/3 currently open
•Operating restrictions continue, but box
office showing signs of recovery.
23
Site Count
China
31 Dec2019New SitesClosures/Losses30 Jun 2020
Enterprise1,10139(547)593
Veezi88-(8)80
TOTAL – China1,18939(555)673
Vista China Operating Performance
•2020 first half revenue down $5.8m (64%) on 2019
•Strong cost cutting, loss $3.7m (Vista share $1.8m)
•Expectation is for 2
nd
half cash neutral as cinema reopening continues
•Dadi has switched to in house owned solution, reducing Enterprise market share to 8% – however
revenue impact less than 10% of overall revenue
•Partnership with Maoyanyielding positive early signs with 105 Veezi sites signed up
•Proposal to acquire additional equity in Vista China terminated.
INDUSTRYOUTLOOK
•Cinemas are re-opening around the world – estimated 70%-80% open
•Research shows Moviegoersare keen toreturn to the theatrical experience with demand strong
•Cinema continues to provide a unique experience
•New content is key to bring many more people to the cinema – positive to see recent “blockbusters” scheduled for opening
•Studio experimentation with alternate content release strategies driven by pandemic related financial stress – not a sea
change
•We expect to see our cinema customers continue to enhance the theatrical experience, supported by Vista innovation.
24
OUTLOOK – POSITIVE
•Outlook is more positive than our estimates at the time of the capital raise but still too early for specific guidance for 2020
•Content for cinema is starting to be released providing much-needed impetus to the cinema industry
•Cinema is still an economic entertainment destination of choice
•Vista stronger and more competitive in post-COVID world given lower cost base and stronger customer engagement
•Positioned to drive strong EBITDA growth over 2021 and 2022
•Improved cash draw against Capital Raise scenario, projected to be now $3-4m per month
•Pandemic experience has underlined that Vista is critical to customer success
•Retained experienced and committed executive and management team to grow into the future
•We have a strong balance sheet, strong customer relationships, and an exciting pipeline of innovation.
25
QUESTIONS
26
THANK YOU
27
---
____________________________________________________________________________________________
Vista Group International Ltd, L3, 60 Khyber Pass Road, Newton, PO Box 8279, Symonds St, Auckland 1150, NZ
Media Release
27 August 2020, Vista Group International Ltd, Auckland, New Zealand
Resilient Vista Navigates Pandemic in Strong Position
Vista Group (VGL) reported its 2020 half year results showing continuing strong customer support and
a resilient market position as cinemas begin to re-open globally.
Kimbal Riley, Vista’s Group Chief Executive, commented “Vista has successfully navigated a very
challenging first half of 2020. We have been planning, and re-planning, every step of the way through
the COVID-19 pandemic and I am delighted to present a result for the half year which shows how
resilient our business is given the global market conditions. This is a testament to the determination of
our people and to the support from our customers across the world.”
“The whole Vista team has been focused on ensuring our customers are prepared for the re-opening of
the cinema and it is exciting to see that happening. The industry is re-opening and Vista has enhanced
its relationships with its customers and its competitive position globally.”
“We have delivered a solid operating cash flow over the half and this has enabled Vista to sustain its
investment in innovation. These enhancements and features, such as the Vista Cinema Re-opening Kit
and Movio’s Research 2.0, support our customers globally with the capabilities to operate lean in a
post-COVID world with operating protocols such as social distance seating, contact tracing, and
contactless payment options. Importantly, raising capital early has enabled us to understand and
anticipate the likely operating environment of our customers post the pandemic and deliver their needs
before they open.”
“We believe Vista is in a stronger and more competitive position, with very strong customer
relationships, a healthy balance sheet with good levels of cash, and a clear focus from the team on
delivering innovation to our customers globally.”
Key Financial Metrics
• Positive operating cashflow of $16.7m, up 123% on first half 2019, includes $3.8m of local and
international wage subsidies and $3.8m of tax deferrals
• Successful $62.4m capital raise with strong investor support
• Revenue down 34% to $44.8m
• EBITDA loss of $6.5m, including non-cash expected credit loss and credit risk provisions of
$7.6m
• Loss before tax of $47.9m, including non-cash impairment charges and credit provisions of
$36.1m
____________________________________________________________________________________________
Vista Group International Ltd, L3, 60 Khyber Pass Road, Newton, PO Box 8279, Symonds St, Auckland 1150, NZ
Key Operational Metrics
• Vista Cinema maintains estimated 51% market share of the 20+ screens segment excluding
China
• Innovation continues in all Group companies with new products and enhancements
• New customer sales: Vista Cinema, Movio Cinema, Maccs with Mica
The trading performance for 2020 reflected the wider market conditions. Reported revenue was down
34% for the Group with non-recurring revenue, primarily one-off license revenue, particularly impacted,
down 54%, as customers deferred or cancelled capital projects. Recurring revenue was down 21%.
Within Vista Group, Vista Cinema, the founding and largest business, maintained its market share in the
first half of 2020, holding steady at an estimated 51% of the global enterprise market (20+ screens)
excluding China. Revenue was down 39% due to the impact of COVID-19, with new license sales
particularly impacted and down 61% against the first half of 2019. Recurring revenue was down 22% for
the Cinema segment due to lower billing in Veezi and discounts for maintenance customers, including
for prompt payment.
Movio, the Vista Group business that delivers data driven marketing solutions for the film industry,
reported revenue down 29%. This was an improvement over earlier expectations considering the global
conditions across the exhibitor and studio markets.
The Additional Group Companies segment was generally less impacted by the pandemic, with Maccs
revenues down only 7%. Maccs won new business in Europe and the USA with its Mica product in the
half. Numero had a good start to the year, with revenues in line with prior year (not consolidated) and
Powster revenue was down 34% as billings for showtimes reduced with cinema closure.
Vista China, which is an associate and is not consolidated into the Group results, restructured its cost
base early in the pandemic to minimise cash outflows and retains a healthy cash balance at the half
year.
Despite the COVID-19 pandemic Vista Group continues to maintain a strong balance sheet. The Group
drew on its debt facilities early in the pandemic and successfully raised $62.4m in new capital during
lockdown from a very supportive institutional and retail shareholder base. Total trade receivables were
down, with lower billings and accrued revenue and increased provision for expected credit loss of
$5.8m. Strong collections over the first half exceeded expectations, demonstrating solid support from
customers.
The Group has taken a conservative approach in reviewing the carrying value of its assets, resulting in
non-cash impairment charges to the income statement of $11.6m against goodwill (primarily in MACCS
and Numero), $15.0m against investments in associates (Vista China and Stardust) and $1.9m against
internally developed software and lease assets.
Vista Group generated a strong positive cashflow from operating activities, $16.7m, with good payables
and cost management, excellent government assistance, employee salary sacrifice and good
collections given the pandemic and customer conditions.
The restructure announced in late June which covers the Group, Cinema and Movio segments will yield
annual savings in salaries of approximately $15m, the top end of the $12m - $15m forecast range.
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 6 months to 30 June 2020
Previous Reporting Period 6 months to 30 June 2019
Currency New Zealand Dollars
Amount (000s) Percentage change
Revenue from continuing
operations
$44,800 -33.6%
Total Revenue $44,800 -33.6%
Net profit/(loss) from
continuing operations
($43,200) -1153.7%
Total net profit/(loss) ($43,200) -1153.7%
Interim Dividend
Amount per Quoted Equity
Security
No interim dividend will be paid in 2020
Imputed amount per Quoted
Equity Security
Not applicable
Record Date Not applicable
Dividend Payment Date Not applicable
Current period Prior comparable period
Net tangible assets per
Quoted Equity Security
$0.38142760 $0.41752401
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
interim financial statements for the six months ended 30 June
2020 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
09 984 4570
Contact email address
matt.cawte@vista.co
Date of release through MAP
27 August 2020
Unaudited financial statements accompany this announcement.
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.
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