Vista shares debut at a premium on NZX
Shares of Vista Group International [NZX: VGL] rose 2.1% on their NZX debut, after the cinema software and analytics company raised $92 million in an initial public offering to pay existing owners and fund global growth.
The shares first traded at $2.40, after an IPO at $2.35, giving the company a market capitalisation of $191.6 million. Some $51.7 million of the funds raised went to existing owners who retained a 47 percent stake, while $40 million in new capital was raised to drive its international growth plans.
The new capital will be used to repay debt and fund the acquisition of controlling stakes in two investments, Movio and MACCS, with about $15.4 million set aside for future acquisitions and developments.
"The new capital structure will support our next chapter of growth to become the leading provider of software solutions to the wider film sector, including growing our global share of the large cinema circuit market (20+ screens)," founder and chief executive Murray Holdaway said in a statement. “We have a great deal more growing to do in the exhibition space, not only in developing cinema markets such as China, Brazil, Russia and India, but in mature markets, where the total number of screens continues to grow.”
Unlike some other high-tech companies that are forecasting losses in a push for global growth, Vista expects to be profitable, though it has suspended its dividend plan for at least the next two years. Forecast revenue in the current financial year is expected to grow to $49.9 million and again to $61.5 million in the 2015 financial year, to produce forecast Ebitda of $13.2 million and net profit after tax of $8.1 million.
The freeze on dividend payments implies Vista will retain between $2.4 million and $4.05 million in 2015, which would have been set aside for investors based on a dividend policy of distributing between 30 percent and 50 percent of profit. The company's existing shareholders have been paid dividends of $10.4 million between 2009 and 2013 on profit of $18.5 million, and have taken another $3.5 million distribution for the 2014 year, which is forecast to deliver profit of $3.4 million.
Vista is the eighth company to list on the NZX this year as the local stock market enjoys a flurry of listings, particularly of tech firms. Last month, Metro Performance Glass [NZX: MPG], New Zealand's largest glass maker, ikeGPS Group [NZX: IKE], which sells a range of portable measuring devices, and Scales Corp [NZX: SCL], the fruit packager and exporter, joined the NZX. In June, Gentrack Group, [NZX: GTK] the utilities and airport software provider, and Serko, [NZX: SKO] the travel booking system company, debuted. ERoad, a logistics and fleet management company, is due to float on Friday.
What do you think? Are tech companies listing on the stock exchange too early? Click here to vote in our subscriber-only business pulse poll.