Vista has already instituted several cost-cutting measures, including suspending its dividend, salary cuts, and scrapping its plan to buy more shares in its China partner.
Vista has already instituted several cost-cutting measures, including suspending its dividend, salary cuts, and scrapping its plan to buy more shares in its China partner.
A Vista Group restructure will lead to job cuts, the maker of cinema management and movie marketing software told the NZX today.
It did not put a number on the cuts, which will come as it streamlines its organisation that currently consists of multiple business units.
As of July lastyear, the company had around 840 staff, most at its Auckland headquarters.
CEO Kimbal Riley did not want to comment on employee numbers when contacted by the Herald this morning. "I'm personally - as I know the team is - really disappointed that we've had to put this proposal to our people, but we are in unprecedented times," he said.
The NZX filing indicates the cull could be substantial. It says Vista is aiming to save $12 million to $15m in annual costs from the reorganisation. The company had total expenses of $59.5m last year.
Vista noted in this morning's filing that most cinemas worldwide remain closed.
A handful are reopening, including the Reading chain which has resumed screenings at its Lynnmall theatre in Auckland today.
But most that have reopened are faced with social distancing restrictions that limit their box office.
Then there is the broader problem that Hollywood has stopped releasing movies, meaning multiplexes that do open are playing a mix of low-budget fare and classics.
And on top of that, the unknowable of how willing people will be to return to cinemas, even once there is an all-clear.
The reorganisation announced today come on top of a series of cost-cutting moves in response to the outbreak, including the cancellation of the dividend, around 80 per cent of staff agreeing to work four days a week for reduced salary, executive compensation being cut from 25 to 30 per cent, and scrapped its plan to buy more equity in its China joint venture.
The company also raised $65m and drew down $20m from a credit facility with ASB to shore-up its balance sheet.
The two moves gave Vista enough headroom for its worst-case scenario, chairman Kirk Senior said at the company's virtual AGM last week - that is, most cinemas remaining closed until the end of 2020 and only gradual reopenings during 2021.
Riley said there were already some takers for new, Covid-specific products for cinemas, including a reopening kit, already being used by a chain in Texas, that helped a multiplex manage bookings for social distancing. The company's software is also allowing the likes of kerbside popcorn pickup.
And Vista has also partnered with another New Zealand company, Shift72, on a streaming platform that is likely to be used for viewing titles from cancelled film festivals in NZ and the US at home.
But despite noting a number of such "green-shoots", both chairman and CEO were cautious in their outlook at the AGM. No revised forecasts were issued to replace the guidance that was scrapped early in the outbreak.
Its shares enjoyed a big run-up over 2019 as investors appreciated it had seen-off the Netflix threat - and Vista shares touched $6.10, giving it a market cap of $1.01 billion.
The stock had crashed as low as 91c and was at $1.14 by the time of the annual meeting on May 29 but has since recovered some ground.
In late morning trading today, Vista as up 16.1 per cent to $2.31.
On May 29, CraigsIP analyst Stephen Ridgewell told the Herald that the stock had been over-sold. He noted two new Hollywood releases were coming as soon as July, and that the new environment meant theatre owners would need more software to help them manage their operations more intensively.
Ridgewell set a 12-month target price of $2.45.
Read more on Ridgewell's analysis, and Vista's financials, in the Herald's report on the AGM here.
