Vista Group, the Auckland-based company that dominates the global market for movie theatre management software, reported big full-year revenue and profit hits today, as expected.
But it also highlighted its strong balance sheet and cost-cutting, and said in an NZX filing that while the impact on the pandemic had been challenging, it saw limited permanent consequences.
For its full-year to December 30, 2020, Vista's revenue fell 39 per cent to $87.5m as it sunk to a $56.7m net loss (including $70m in non-cash items) from its year-ago profit of 21.3m.
Operating cashflow fell 81 per cent but was still $3m in the black as cash burn in the second half fell to $3.7m, within the forecast $3m to $4m range.
Vista reported an operating loss of $29.1m versus its prior-year operating profit of $21.4m.
Buoyed by a $62m equity issue early in the pandemic, plus staff cuts, the company ended the year with a cash balance of $67m and $39m in undrawn debt facilities.
The "permanent consequences" question is key. Studios like Disney, Warner and Paramount have ramped up streaming efforts during the outbreak - in Disney's case, with results that blew away analyst expectations.
Some pundits see a long-term shift in the power balance toward streaming.
But earlier, Vista chairman Kirk Senior said while his company was taking a conservative approach on how long the pandemic could last, once it did finally clear, multiplexes would fill - for people were, ultimately, social animals.
Regardless, Vista has created its own streaming service - a white-label effort for theatres - in partnership with another Kiwi company, Hamilton's Shift72. However, it has yet to break out beyond a modest number of pilot customers.
The company has not been offering guidance since March 2020, citing Covid uncertainty.
Today it offered the broad comment that it was "confident in the resurgence of the theatrical experience."
And speaking to the Herald shortly after the result, Vista chief executive Kimbal Riley said it was not longer just a matter of feel-good sentiment. China had just enjoyed record New Year box office receipts, while Japan and Russia were now back to close to 2019 levels. Cinemas in Mexico were reopening today, with New York next week and the UK mid-May. Hollywood studios were ramping up their production schedules again (read more of Riley's comments here).
A major project for 2021 will be a pilot of its new Vista Cloud, which it seems simplifying life for theatre chains that use Vista's various products for managing their cinemas and marketing their content. As things stand, however, recurring revenue was down 26 per cent for 2020.
Shares were down 2.3 per cent to $1.66 in early trading for a market cap of $380m. The stock, which traded above $5 during its 2019 peak, is down 45 per cent over the past 12 months.