Vista International Group shareholders have been told to expect 20 per cent to 30 per cent revenue growth again this financial year and the start of dividend payments after the movie industry software company spent north of $10 million on new acquisitions this year.

At the annual general meeting in Auckland today, group chief executive Murray Holdaway said the acquisitions will provide a revenue lift for the 2016 financial year in line with the 39 percent achieved in 2015, but is also likely to mean earnings before interest, tax, depreciation and amortisation doesn't grow at the same rate as revenue.

He said the board had three options for the expected excess cash the company will have at the end of this financial year - starting to pay dividends as indicated earlier, more acquisitions, and investing in creating more technology that would keep the company ahead of its competitors.

The board has a policy of paying out between 30 percent and 50 percent of net profit subject to immediate and future growth opportunities.


Holdaway said no new acquisitions were on the horizon as he wanted to bed down the number it had made this year and he expected the spare cash would go to a mix of research and development and dividend payments.

Acquisitions included completion of the deal for Ticketsoft, the next largest competitor to its core cinema software product, a 50 percent share of Dutch-based cinema analytics company Share Dimension, a 50 percent investment in Powster, a UK-based movie website and marketing platform provider, and 100 per cent of New Zealand and Australia movie guide Flicks.

Holdaway said one of the key metrics from the 2015 financial performance was the rise in annual recurring revenue, which was now around 60 percent of overall revenue.

"Software companies are often like rockets that are good at going up but when they run out of fuel crash quickly. Annual recurring revenue builds resilience and let's us glide instead of going up and down," he said.

Vista Entertainment Solutions, which sells software to larger cinemas and has a 38 per
cent global market share, remains the biggest earner for the business, accounting for 60 to 70 per cent of revenue.

"When we went to market a lot of people thought we couldn't grow that business but in fact growth has been significant at more than 20 per cent," Holdaway said.

Regulatory approval is still being sought for its China partnership with WePaio (owned by We Chat/Ten Cent Group) announced in March. Director Brian Cadzow said it was a "tortuous process" but one its partner was working hard to progress.

China is the fastest-growing cinema market in the world and its box office revenue is forecast to overtake the US by 2017. Vista will receive around $38 million in cash in the next two years from the WePaio deal, which will see it invest in Vista China and take a 2 percent stake in the overall group.


"The rationale for this deal is that there are 2,000 cinemas in China and we have one sales rep. It's hard to scale by ourselves," Holdaway said. "The strategy we hope is to have a small part of a much bigger pie."

A risk of going it alone was the need for the Chinese government to make regulatory changes to software licencing before Vista can sell in that market, he said.

Earlier, Vista said it and Movio had signed a deal to provide their cinema industry software to Ster-Kinekor, the largest cinema exhibition group in Africa. Ster-Kinekor is already a customer of VGL's MACCS International for its film distribution business and is now the second customer to be licensed to three VGL products.

Holdway said in the next five to 10 years Africa is likely to a big emerging market for the company, with interest already being shown from Nigeria and Tanzania.

Since listing on the NZX and ASX in 2014, Vista has doubled staff numbers to 450, doubled its offices to eight worldwide, and increased its market capitalisation to $470 million from $187 million. It won the PwC Hi-Tech Company of the Year award last week while subsidiary Movio won the Innovative Software Product award.

Holdaway said the company had renegotiated the earn-out deal with Movio's founders, extending it for a year to the next three years. So far $2.9 million of the $6.8 million earn-out has been expensed.

Vista shares gained 1 per cent to $5.91 and are up 19 per cent over the past 12 months.