Vista Group International said the fragile position of cinema chain Cineworld doesn’t reflect the status of the wider cinema industry, but the software firm will continue to monitor the situation.
On Friday, The Wall Street Journal reported that Cineworld was planning to file for bankruptcy in the upcoming weeks due to theatre admissions plunging and the cinema chain struggling with its debt.
UK-based Cineworld is the world's second-largest cinema chain, with the company also owning the Regal Cinemas brand among others, which operates in a number of countries including New Zealand.
Vista said it was “public information that Cineworld has a significant debt burden” but the NZ firm understood that the current situation was “specific to Cineworld” and didn’t reflect the wider industry.
Chief executive Kimbal Riley said Cineworld remained a “valued Vista Group customer” and Vista’s technology continued to play a role in Cineworld's operations.
“We will continue to provide the Cineworld team with the best possible support over this challenging time,” he said.
Vista supplies cinemas with software, claiming about 50% of the global multiplex cinema market excluding China, and has software offerings for the rest of the movie business from studios and distributors through to cinema customers.
The cinema software provider said the company planned to continue monitoring the situation closely but didn’t expect it to have a “material impact” on earnings guidance for the current year.
“Some form of receivables provisioning may be required depending on future circumstances,” the company said in its statement.
Vista Group releases its results for the six months ended June 30 on Aug 29.
The company’s shares were down 4.6% at $1.85 in late-morning trading today.
