There are close to 70 New Zealand companies that have dual listings on the Australian Securities Exchange (ASX). Here are two of them that are doing great things on the global stage.

1. Vista Group International (VGL, $1.645)

Market capitalisation: $391 million

12-month total return: 35.9%

3-year total return: –9.6% a year

Forecast FY25 dividend yield: n/a

Analysts’ consensus price target: n/a

Established in New Zealand in 1996, Vista Group International has become the global leader in cinema management software, with a market share of 46% of cinema exhibition companies with more than 20 screens, excluding China and India. Vista Group has customers in more than 100 countries, and a gross transaction value (GTV) of more than $US15 billion.

Vista provides the technology solutions that power the world’s largest cinema circuits and film distributors. The company’s expertise covers cinema management software; loyalty, moviegoer engagement and marketing; film distribution software; box office reporting; creative studio solutions; and the Flicks movie, cinema and streaming website and app.

The original product was the eponymous Vista, which provides cinema management software to the world’s leading cinemas: Vista has mainly been installed enterprise software, but VGL has been progressively moving it to the cloud for several years now, through software-as-a-service (SaaS) applications.

The product range also contains:

• The Veezi cloud-based cinema management solution, which was built specifically for cinema exhibitors in the ‘small circuit’ (or independent) cinema market, categorised as those with fewer than 20 screens;

• Movio, the company’s cloud-based marketing data analytics and campaign management software for cinema exhibitors, film distributors, and studios;

• Numero, a product for film distributors and exhibitors, which tracks daily results at cinema level;

• MovieTeam, a cinema staff management and scheduling product;

• MovieXchange, its application to help exhibitors and distributors manage their digital marketing content;

• Maccs, which designs and develops film distribution software for film studios and distributors, covering theatrical distribution, movie prints and advertising as well as rights and royalties management;

• Powster, a digital creative studio that is a leader in film distribution marketing websites; and

• Oneview, a generative AI-powered mobile app and digital assistant designed to offer exhibitors real-time data, with access to insights such as box office, admissions and market share, food and beverage performance, operational key performance indicators (KPIs), member insights and release calendars.

All of these product solutions enable the company’s clients to capture value, either by reducing the cost of serving customers, or increasing revenue per customer, per admission.  In particular, Vista is at the forefront of the “premiumisation” of cinema services, enabling its cinema operator clients to lift the spend per head, by developing premium experiences.

Last year, Vista Group launched Vista Cloud, its integrated software-as-a-service (SaaS) platform that represents the evolution of its existing Vista Cinema enterprise software. Along with Oneview, Vista Cloud is now the backbone of the offering. Having launched Vista Cloud, the company says it is on track for annual recurring revenue (ARR) of more than NZ$175 million by the end of 2025. ARR is forecast to grow by more than 15% a year from 2025, toward Vista Group’s “aspiration” of NZ$300 million. The company has also guided the market to expect it to be cashflow-positive by the end of 2024, a year ahead of its previous plans.

In FY23, revenue rose by 6%, to NZ$143 million, with SaasS revenue increasing by 20%, to NZ$45.9 million, and recurring revenue rising 10%, to NZ$124 million. Earnings before interest, tax, depreciation, and amortisation (EBITDA) surged 25% to NZ$$13.3 million and rose 32% after adjusting for foreign exchange. The net loss improved by 35%, to NZ$13.6 million.

Broker coverage on Vista Group is hard to find, but after a difficult time during the COVID pandemic, during which the share price fell 80% as the pandemic shut cinemas, VGL has rebounded well off the lows of $1.04. Although it is not yet profitable – because it invests heavily in research and product development – it’s a true global leader, and it looks like it has set its business up well to grow strongly from its current level.

2. AROA Biosurgery (ARX, 51.5 cents)

Market capitalisation: $177 million

12-month total return: –49.8%

3-year total return: –23.5% a year

Forecast FY24 dividend yield: no dividend expected

Analysts’ consensus price target: $1.00 cents (Stock Doctor/Reuters, five analysts)

New Zealand company AROA Biosurgery works in regenerative medicine, where it is developing a range of medical and surgical products based on its AROA extracellular matrix (ECM) technology, which aims to improve the rate and quality of soft-tissue repair. The ECM products are based on the regenerative properties of the forestomach of sheep, a highly vascular organ; the products are manufactured in New Zealand from this material. Higher vascularity allows tissue to resist or fight infection by delivering essential cells, nutrients, and oxygen locally, to give the structure and biology required for regenerative healing. The ECM gives both support to weak or absent tissue and a template for natural wound repair; in such a way as to avoid triggering any additional inflammatory/immune response from the body.

The company’s first commercial surgical product, a reinforced “bio-scaffold” developed in collaboration with US company TELABio, was cleared by the US Food & Drug Administration (FDA) FDA in December 2014, and clinical studies were started in the US in May 2015 for use in ventral hernia repair and abdominal wall reconstruction. In addition to the TELABio product (AROA receives about 27% of TELABio’s net sales of Ovitex products), AROA now has in the market:

• The Symphony and Endoform products, suitable for treating diabetic foot ulcers, venous ulcers, pressure ulcers, and chronic wounds;

• The Myriad Matrix, which works for soft tissue repair, reinforcement, or complex wounds, and the Myriad Morcells product, which is aimed at the management of acute and chronic wounds. The target markets for these are trauma, tumour removal, general surgery, and inflammatory skin disease. The Myriad products have been shown to resist bacterial contamination and can be used in contaminated soft tissue defects without having to wait until a pristine wound environment can be achieved.

• The OviTex reinforced tissue matrix, used in hernia repair, wound dehiscence (a surgical complication in which a wound ruptures along a surgical incision) and breast surgery.

The products have regulatory approval in 50 countries. So far, more than six million AROA products have been used to treat patients. AROA estimates its total addressable market (TAM) at US$3.1 billion.

The latest product to come out of the platform is the Enivo tissue apposition platform, which has been developed to help address seroma, which is the abnormal build-up of clear fluid inside the body, in a “dead space” after surgery, particularly in breast cancer and plastic surgery. Surgeons currently use surgical drains, adhesives, and quilting sutures to manage dead-space and prevent fluid accumulation, but these techniques are unreliable.

The Enivo platform has three components, a pump and catheter, and an ECM “sleeve,” a specially designed AECM implant. When the product is deployed, the tissue surfaces are drawn together, held in place and tissue fluids are drained by the vacuum to an external fluid collection bag. It potentially offers a more effective method than what surgeons currently use. In April, the FDA cleared the Enivo pump and catheter for use in the removal of surgical and bodily fluids from a closed wound for hematoma and seroma prophylaxis following plastic surgery or other general surgeries where large flaps are formed; AROA plans to seek approval for the ECM sleeve. AROA estimates the TAM for Enivo in the US at about US$1 billion.

In the fourth quarter (March 2024), AROA generated NZ$18 million in cash receipts from customers and had net cash inflows from operations of NZ$300,000, exceeding its guidance expectations for break-even. The company brought its quarterly “cash burn” down 71%, to about NZ$1 million, and ended the year with a strong closing cash balance of NZ$29.5 million.

The first half (to end of September 2023) was a struggle, with what it calls “normalised” EBITDA (earnings before interest, tax, depreciation, and amortisation) coming in at a loss of NZ$3 million, but AROA has told investors to expect a “step change” in financial performance in the second half.

The company’s guidance for full-year results is for product revenue of NZ$72 million–$75 million, which would represent growth of 19%–24%, driven mainly by the Myriad product suite; a product gross margin of 85%; and second-half normalised EBITDA of NZ$4 million–$5 million delivering full-year normalised EBITDA of NZ$1million–$2 million. That is subject to TELABio delivering on its calendar-year 23 revenue guidance of US$57 million–60 million (representing 38–45% growth over CY22).

Analysts see the all-important breakthrough to net profit coming in FY25, with earnings per share of 0.64 NZ cents. That should see AROA re-rated significantly. The company has had its share price struggles over recent years, but it looks to have turned the corner meaningfully.

Important: This content has been prepared without taking account of the objectives, financial situation or needs of any particular individual. It does not constitute formal advice. Consider the appropriateness of the information in regard to your circumstances.