Ann: 2022 Investor Day Presentation, page-3

Vista has great tech and a near insurmountable dominance of its market but the board and management need a massive kick up the backside. It seems like nobody has told them the everything bubble is over and there is no such thing as free capital anymore.

Pre COVID they were not always disciplined about investing in adjacencies (e.g. Stardust which is now dust...). I still for instance don't quite see any synergy between Flicks (a movie review site) and Vista (ERP cinema software). Even Powster (film website design) and Numero (box office reporting) are questionable to be in the stable of a software company.

It would be fine if they made good money and helped fund the development of the core software businesses. But Numero, MACCS (theatrical distribution software), Flicks and Powster together earned a grand total of $0.3m of EBITDA off close to $10m in revenue in 1H22 EBITDA. Shareholders really need to question the value being delivered here as a multi-segment company necessitates a large overhead. All of $7m worth in the first half up $1.7m yoy!

With the software businesses of Vista (and Veezi), Movio, Maccs all moving to the cloud Vista mgmt and the board should seriously be thinking about whether these should all be collapsed into one segment (under one mgmt and development team) and the (in my view) non-core Flicks, Powster and Numero businesses sold to management/PE in an LBO. Then cut the ludicrous corporate overhead which is now > 10% of revenue on an annualised basis (i.e. 2x the size of group EBITDA).

Re the cloud transition the capex spend on this is frankly hard to fathom. Capitalised spend is already pretty crazy at $7.6m in 1H22 when the business made $3m at EBITDA (post AASB 16 at that). To lift this to an annualised $25-30m run rate for three years (23,24,25) from $15m when the world is careering towards a recession seems pretty foolhardy. Is there really a competitor breathing down their neck about to try to break into the cinema software space that necessitates such a pace? Do the clients have a multitude of well capitalised companies offerng a modern cloud alternative to use?

How about they 1) cut the deadwood in the development teams NOW; 2) take advantage of the mass layoffs happening globally all over tech to find new hungry employees at lower cost; 3) only move forward at a pace that doesn't burn into their cash balance.

Frankly at this rate I see them being highly vulnerable to a PE fund / strategic run by people that want to make money for their investors rather than hang around cinephiles.

And I can't say I wouldn't sell my holding here at the first offer if it was at your standard 30% premium.