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Vista Group International / Equity Bottom-Up

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<h3>Vista Group International Ltd</h3>
<h3>Upgrades revenue guidance; monitoring Cineworld</h3>
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<p>Vista Group International Ltd (ASX:VGL), a dual ASX/NZX-listed company, provides software to the film/cinema industry globally encompassing cinema management, film distribution and customer analytics. Its core ‘Vista Cinema’ offering optimises cinema management for multiplex exhibitors (20+ screens) and has ~51% global (ex-China) market share (with 7k sites in &gt;100 countries). VGL also provides: (1) A Software-as-a-Service (‘SaaS’) software offering for smaller exhibitors (branded ‘Vezzi’); (2) A SaaS campaign management and data analytics solution for exhibitors and distributors/studios (branded ‘Movio’); and (3) Additional film studio/industry offerings via four smaller group companies, namely Maccs (film distribution software), Numero (box office reporting service), Powster (film marketing products), and Flicks (movie review and showtime guide). VGL has recently benefited from the post-lockdowns resurgence of movie goers and solid cinema slate. It has also noted two structural trends: (1) Studios continued support of an exclusive theatrical window; and (2) Accelerating industry adoption of cloud technologies and digitisation (which could boost adoption of the new offerings of ‘Vista Cloud’ [2 live customers] and ‘Vista Digital’ [an omni-channel experience for movie goers]); as well as cinema’s traditional outperformance in weaker economic conditions.</p>
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<h3>Business model</h3>
<p>VGL’s business model spans the cinema/film industry from production and distribution to exhibition and the movie goer. It generates revenue via: (1) Recurring revenue (non-SaaS) primarily from on-premise subscription and maintenance fees for Vista Cinema; (2) Recurring SaaS revenue principally from annual subscription fees to access cloud-hosted software (Vezzi, Movio, Maccs, Numero and now Vista Cinema); (3) Variable SaaS fees (largely from ticket sales via Vista Cinema); and (4) Non-recurring revenue from perpetual licensing of Vista Cinema on-premise software (now 5% of revenue) and various one-off services across its businesses. The majority of VGL’s revenue (68%) is derived from Vista Cinema and Vezzi, with the remainder from Movio (15%) and the four smaller companies (17%). 83% of VGL’s FY21 revenue was classified as recurring (including SaaS fees [28% of total revenue]). The geographic FY21 revenue split was US (33%), UK (30%), NZ (18%) and other countries (19%).</p>
<h3>NZ$3.1m EBITDA in June half; monitoring Cineworld</h3>
<p>VGL recently disclosed the following H1 (June half) FY22 financial information: (1) NZ$62.4m revenue (up 39% on pcp) as it benefited from the post-lockdowns resurgence of movie goers and ceased recurring fee discounting; (2) NZ$3.1m EBITDA (5.0% margin); (3) NZ$18m net loss (includes $10m China impairment); (4) NZ$5.1m operating cashflows and NZ$3.2m free cash outflows (includes $7.6m capitalised development spend); and (5) NZ$33.5m net cash (includes NZ$18.4m debt). Notably, VGL upgraded its FY22 revenue guidance from NZ$118- $123m (~20% growth) to NZ$123-128m (~28% growth) attributable to the strength of the cinema industry recovery. Separately, one of its key customers, Cineworld, recently stated that it may file for bankruptcy.* VGL’s response was it “does not expect it to have a material impact on the current year guidance” but “is continuing to monitor the situation closely.” *Cineworld filed for US bankruptcy on 7 September.</p>
<h3>Trading at a premium to ASX All Tech Index EV/EBITDA</h3>
<p>VGL is trading at 3.0x FY22f EV/Revenue and 50x FY22f EV/EBITDA. For FY23f, the metrics are 2.8x and 27x respectively (Source: Refinitiv). With no listed pure-play peers, the ASX All Tech Index (XTX) provides a valuation yardstick – with VGL trading at a discount to XTX’s 12- month forward mean EV/Revenue of 3.3x but a premium to its EV/EBITDA of 17x.</p>
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Vista Group International Ltd
Upgrades revenue guidance; monitoring Cineworld




Vista Group International Ltd (ASX:VGL), a dual ASX/NZX-listed company, provides software to the film/cinema industry globally encompassing cinema management, film distribution and customer analytics. Its core ‘Vista Cinema’ offering optimises cinema management for multiplex exhibitors (20+ screens) and has ~51% global (ex-China) market share (with 7k sites in &gt;100 countries). VGL also provides: (1) A Software-as-a-Service (‘SaaS’) software offering for smaller exhibitors (branded ‘Vezzi’); (2) A SaaS campaign management and data analytics solution for exhibitors and distributors/studios (branded ‘Movio’); and (3) Additional film studio/industry offerings via four smaller group companies, namely Maccs (film distribution software), Numero (box office reporting service), Powster (film marketing products), and Flicks (movie review and showtime guide). VGL has recently benefited from the post-lockdowns resurgence of movie goers and solid cinema slate. It has also noted two structural trends: (1) Studios continued support of an exclusive theatrical window; and (2) Accelerating industry adoption of cloud technologies and digitisation (which could boost adoption of the new offerings of ‘Vista Cloud’ [2 live customers] and ‘Vista Digital’ [an omni-channel experience for movie goers]); as well as cinema’s traditional outperformance in weaker economic conditions.




Business model
VGL’s business model spans the cinema/film industry from production and distribution to exhibition and the movie goer. It generates revenue via: (1) Recurring revenue (non-SaaS) primarily from on-premise subscription and maintenance fees for Vista Cinema; (2) Recurring SaaS revenue principally from annual subscription fees to access cloud-hosted software (Vezzi, Movio, Maccs, Numero and now Vista Cinema); (3) Variable SaaS fees (largely from ticket sales via Vista Cinema); and (4) Non-recurring revenue from perpetual licensing of Vista Cinema on-premise software (now 5% of revenue) and various one-off services across its businesses. The majority of VGL’s revenue (68%) is derived from Vista Cinema and Vezzi, with the remainder from Movio (15%) and the four smaller companies (17%). 83% of VGL’s FY21 revenue was classified as recurring (including SaaS fees [28% of total revenue]). The geographic FY21 revenue split was US (33%), UK (30%), NZ (18%) and other countries (19%).
NZ$3.1m EBITDA in June half; monitoring Cineworld
VGL recently disclosed the following H1 (June half) FY22 financial information: (1) NZ$62.4m revenue (up 39% on pcp) as it benefited from the post-lockdowns resurgence of movie goers and ceased recurring fee discounting; (2) NZ$3.1m EBITDA (5.0% margin); (3) NZ$18m net loss (includes $10m China impairment); (4) NZ$5.1m operating cashflows and NZ$3.2m free cash outflows (includes $7.6m capitalised development spend); and (5) NZ$33.5m net cash (includes NZ$18.4m debt). Notably, VGL upgraded its FY22 revenue guidance from NZ$118- $123m (~20% growth) to NZ$123-128m (~28% growth) attributable to the strength of the cinema industry recovery. Separately, one of its key customers, Cineworld, recently stated that it may file for bankruptcy.* VGL’s response was it “does not expect it to have a material impact on the current year guidance” but “is continuing to monitor the situation closely.” *Cineworld filed for US bankruptcy on 7 September.
Trading at a premium to ASX All Tech Index EV/EBITDA
VGL is trading at 3.0x FY22f EV/Revenue and 50x FY22f EV/EBITDA. For FY23f, the metrics are 2.8x and 27x respectively (Source: Refinitiv). With no listed pure-play peers, the ASX All Tech Index (XTX) provides a valuation yardstick – with VGL trading at a discount to XTX’s 12- month forward mean EV/Revenue of 3.3x but a premium to its EV/EBITDA of 17x.













Vista Group International Ltd - Upgrades Revenue Guidance; Monitoring Cineworld

New Zealand

Vista Group International Limited provides film industry software. The Company offers cinema, distribution and data analytical software to the global film industry.

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Vista Group International (VGL NZ)

Vista Group International Ltd - Upgrades Revenue Guidance; Monitoring Cineworld

Vista Group International Ltd Upgrades revenue guidance; monitoring Cineworld Vista Group International Ltd (ASX:VGL), a dual...

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