VGL Agreement With Odeon Could Not Impress Investors – Share Price Tumbled By 5.292%

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On 21 December 2018, Vista Group International Limited (ASX: VGL), a provider of software solutions across the global film industry announced its enterprise agreement with Odeon Cinemas Group. The deal covers Odeon’s UK and Ireland cinemas which forms a part of Odean Cinemas group.  Under the agreement, Vista Cinema with its digital solution will assist in cinema intelligence for forecasting. Further, through MovieX Cinema, the company needs to provide customer analytics, campaign management, and movieXchange Film. 

Also, the agreement allows Odeon to utilize elements of Vista’s managed service and cloud-ready products which will enable Odeon to deliver fully integrated guest experience.

The entire process is expected to complete in 2020.

The official listing date of Vista Group on ASX is 11 August 2014. Since then, the performance of the company remains positive. The performance of the company is 212.17%. The last one-year performance of the company is 43.60%. The YTD performance of the company is 49.58%.

For the half year ending on 30 June 2018, the company’s revenue was up by 20% from the previous corresponding period. The total revenue generated in this period was $60.1 million. The recurring revenue was up by 28%. The EBITDA was up by 27% which is $13.1 million in the current period. The company made an operating profit of $11.1 million which is also up by 37%. The company declared a dividend of 1.6 cents per share. A total dividend paid during the period was $2.6 million. The dividend declared was 33% ahead of the previous corresponding year.

The company’s balance sheet is strong as there is an increase in the net asset base within six months of duration. The cash level remains strong as a result of improved operating cash flows. There was also an increase in investment in the capitalization process of software development. Further, the company has received cash from Vista China.

Through the trading, the company has generated cash which was the driving factor of an increase in the operating cash flow. It represents an overall strong cash outlook. The company has shown a red signal to French business partner agreement CCG which was another source of cash inflow.

The net cash and cash equivalent by the end of the period were $26.3 million. The company also generated an amount worth $6.2 million by the sale Vista China.

Even though the company has entered an enterprise agreement with Odeon Cinemas Group, there is a fall in the share price of the company. The possible reason could be the industry effect as S&P/ASX 200 Information Technology (Sector) reports a fall of 1.38% by the close of trading on 21 December 2018.

With the market open on 21 December 2018, the opening price of the share was $3.310. It went as high as $3.4. The lowest price of share recorded for the day was $3.310. By the end of the trading on 21 December 2018, the closing price of the share was $3.400 which is 0.190 points below the previous day’s closing price with the stock holding a market capitalization of $594.27 million and PE ratio 61.58x.


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