Vista Group falls deeply into red as Covid-19 impact bites

Vista Group has plunged deeply into the red in the first half. Photo / Getty Images

Shares in cinema software company Vista Group rallied sharply despite the company going deeply into the red over the first half.

Non-cash credit charges and credit provisions of $36.1m and the impact of Covid-19 drove Vista to a loss for the six months to June of $43.2 million - a 1154 per cent deterioration from the previous corresponding period last year.

Before 11am, Vista shares were up 23.7 per cent or 32c at $1.67 - having lost about three quarters of their value over the last 12 months.

Revenue for Vista, which was one of the first NZX-listed companies to raise capital once the impact of Covid-19 became known, slumped by 33.6 per cent to $44.8m.

Vista chief executive Kimbal Riley said the company had successfully navigated a very challenging first half of 2020.

Riley said the company had been "planning, and re-planning, every step of the way" through the Covid pandemic.

Vista had been focused on ensuring our customers are prepared for the re-opening of the cinemas.

"The industry is re-opening and Vista has enhanced its relationships with its customers and its competitive position globally," he said.

"We have delivered a solid operating cash flow over the half and this has enabled Vista to sustain its investment in innovation."

Vista chief executive Kimbal Riley. Photo / Supplied

Vista successfully raised $62.4m from the market in June.

"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," Riley said.

Vista was now in a stronger and more competitive position, with a healthy balance sheet with good levels of cash.

Operating cashflow of $16.7m, up 123 per cent on first half 2019, included $3.8m of local and international wage subsidies and $3.8m of tax deferrals.

Riley said the trading performance for 2020 reflected the wider market conditions as customers deferred on cancelled capital projects.

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 per cent of the global enterprise market (cinemas with 20 plus screens) excluding China.

Revenue fell 39 per cent due to the impact of Covid-19, with new license sales particularly impacted and down 61 per cent against the first half of 2019.

A restructure announced in late June which covers the Group, Cinema and Movio segments would yield annual savings in salaries of approximately $15m, the top end of the $12m - $15m forecast range.

The company said the outlook was more positive earlier estimates given at the time of the capital raise, but that it was too early for specific guidance.