Ann: GENERAL: VGL: VGL - Movio deferred consideration update

• Release Date: 22/12/15 09:56
• Summary: GENERAL: VGL: VGL - Movio deferred consideration update
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					VGL
22/12/2015 09:56
GENERAL
NOT PRICE SENSITIVE
REL: 0956 HRS Vista Group International Limited

GENERAL: VGL: VGL - Movio deferred consideration update

MARKET ANNOUNCEMENT
22 December 2015, Vista Group International Ltd, Auckland, New Zealand

Vista Group and Movio (Virtual Concepts ("VCL") founders agree on revised
deferred consideration terms

As part of the Sale and Purchase Agreement ("SPA") to acquire the remaining
43% of VCL in August 2014 there was a deferred consideration calculation
which formed part of the final purchase price. This was disclosed in the
Prospectus (dated 3 July 2014) at an anticipated level of $5.9m and has been
reported in the financial accounts at December 2014 and June 2015.

Movio is the trading subsidiary of VCL. Movio has had a strong 2015 year with
respect to achieving its core strategic goals (refer Market Announcement of
25 November 2015). It has more cinema circuits contracted to use its Movio
Cinema product than forecast and has completed and released its Movio Media
products (Movio Research and Movio Engage) which have produced revenue from
contracts and marketing campaigns from 6 studios and 1 pre-show advertiser.
The conversion of signed contracts has generally taken longer than expected
as customers adapt and interface to the new technology. This has resulted in
reported revenue running behind forecast.

One of the core objectives of the deferred consideration was to provide an
incentive to the two founders of Movio on the upside potential that the
business had yet to fully realise. The Board of Vista Group feels committed
to that objective on the basis that it is in the interests of all
shareholders for the founders to be incentivised to stay with, and grow the
Movio business. This renegotiation achieves that objective with the benefit
of securing the founders for at least one extra year.

The Board of Vista Group believes that the strategic objectives of Movio have
been met and has therefore renegotiated the terms of the SPA to account for
the delays in converting signed contracts.
An agreement has now been reached with the founders to modify the terms by
which the deferred consideration can be earned. It is important to note that
the value range of the deferred consideration, $0 to $9.82m, has not been
changed and the total value of the deferred consideration will still be
calculated based on performance for the year ended 31 December 2015. As a
result of the new agreement the key changes to the agreement are:
- The operating profit measure required has been reduced to an
achievable level based on current performance
- The earn out of the deferred consideration has been increased to 3
years with it being paid 40% in March 2016, 30% in March 2017 and 30% in
March 2018. This has the benefit of securing the involvement of the founders
for at least one extra year.
- In years 2 and 3, revenue hurdles and a minimum profit return have
been established before any earn out is paid.

The accounting for the deferred consideration, as disclosed in the June 2015
interim accounts, was based on a payment of $5.9m over a 2 year period. It is
now anticipated that the deferred consideration under the new agreement will
be calculated in a range of $6.3m to $6.8m and will be accounted for over a 3
year period. The adjustment to the calculation will be disclosed in the 31
December 2015 financial statements and the notes to the accounts.

Brian Cadzow
Director - Commercial and Legal
Vista Group International Ltd
Contact: +64 9 984 4570

About Vista Group International:
Vista Group International (Vista Group) is a public company, listed on both
the New Zealand and Australian stock exchanges (NZX/ASX VGL). Vista Group
provides cinema management, film distribution and customer analytics software
to companies across the global film industry. Cinema management software is
provided by Vista Entertainment Solutions, the core business of the Group.
Movio (data analytics), Veezi (cloud-based SaaS software for the Independent
Circuit Market), MACCS (film distribution software) and Numero (box office
reporting software for film distributors and cinemas), products leverage the
success of this platform into other parts of the film industry; from
production and distribution, to cinema exhibition through to the moviegoer
experience. It is estimated that in excess of a billion cinema tickets are
processed every year through Vista products. Vista Group has over 350 staff
across six offices in New Zealand (Auckland headquarters), Australia, the
USA, the UK, the Netherlands, and China.  Website: www.vistagroup.co

About Movio
Movio is the global leader in marketing data analytics and campaign
management software for cinema exhibitors, film distributors and studios. A
company of Vista Group International Ltd (NZX/ASX: VGL), Movio's mission is
to revolutionise the way the film industry interacts with moviegoers. Movio
maintains real-time, authoritative data on the loyalty activity and
transactions for many of the world's biggest cinema chains and captures the
behaviour of over 32 million active cinema loyalty members worldwide. Movio
Cinema, our flagship product, holds comprehensive marketing data covering
24.5 percent of cinema screens of the Large Cinema Circuit globally (24,000
screens). Movio Media aggregates data across a region to provide film
distributors and studios comprehensive market data on the behaviour of
typical moviegoers, crucial audience insights and innovative campaign
solutions. Movio operates in North America, Latin America, Europe, Middle
East, Australia, New Zealand, China, and South East Asia.
End CA:00275559 For:VGL    Type:GENERAL    Time:2015-12-22 09:56:46