Vista expects big dollars from Chinese joint venture

Vista’s Chinese subsidiary, Vista Entertainment Solutions, has been granted the final regulatory approvals required to establish its joint venture with WePiao

NZX-listed Vista Group International (NZX: VGL), a developer of software for the global movie industry says it expects its foray into the Chinese market to generate cash in excess of $38m in its first year. The figure is almost 50 percent of the company’s current annual revenues.

Vista’s Chinese subsidiary, Vista Entertainment Solutions, has been granted the final regulatory approvals required to establish its joint venture with WePiao, announced in March, in which Vista Group will hold 40 percent.

Vista Group is providing the new venture with the exclusive distribution rights to all its existing software: Vista Cinema, Veezi, Movio, MACCS and Numero.

Vista said it expected the move to accelerate the growth in China of its core cinema product Vista Cinema and its cloud-based product, Veezi. It said this was “ideally suited to the large number of smaller cinemas in China,” adding: “It will also provide a launch platform for Movio, MACCS and Numero software in what is the world’s fastest growing cinema exhibition market.

It said the estimated cash receipts in year one of $38m would be made up of: the value for the sale of shares in Vista China; an initial upfront fee for the distribution rights; three years of maintenance fees; the value for the 2.0 percent of new shares issued in Vista Group. It added: “Additional upfront distribution fees will be received in year two and ongoing maintenance fees from year four.”

Vista has announced its half year results for the six months to 30 June 2016, saying overall, performance was well up on the 2015 half year. The company reported FY16 first half revenues of $40.7m up 49 percent on H1 of FY15. Profit before tax was $4.2m, up from $2.6m in H1 of FY15 and after tax profit $2.7m, up from $1.3m. EBITDA was up 47 percent to $5.3m.

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