Written by Max Mason
Skydivers can tackle an indoor challenge in Sydney’s west – 400 flight hours were sold in four hours in an early bird sale.
David Murray may be excited about joining the board of little-known Indoor Skydive Australia but there is one challenge already waiting for the former chief executive of the Commonwealth Bank to tackle head on.
Mr Murray, who was inaugural head of the federal government’s Future Fund, has never taken the plunge and gone skydiving.
“I don’t think I’m going to duck it with these blokes, am I?” he joked.
Due for completion in the first quarter of this year, the indoor facility being built in Sydney’s west is attracting huge interest; 400 flight hours were sold in four hours in an early bird sale, and Mr Murray, who joined the board of ISA as a non-executive director last Monday, will be joining the line of people looking to fly.
“We’ll certainly get David up in the indoor skydiving centre; I don’t know whether or not we’ll get him out of an aeroplane,” ISA chairman Ken Gillespie said. Indoor skydiving works through a wind tunnel, created by electric turbines with airflow sucked out of a central chamber, which houses the skydiver.
It seems an odd marriage between one of Australia’s best-known businessmen and ISA, which has a market capitalisation of just $53.2 million, but the connection is much closer to home than most board member additions.
Mr Murray and Mr Gillespie, who formerly served as Vice Chief of the Defence Force and Chief of Army, have shared a friendship for several years.
“I know the Murray family particularly well, having served in the military with two of David’s brothers over time,” Mr Gillespie said.
Prior to the company’s listing, ISA had trouble drawing interest from banks to help with the initial public offering.
“We basically did the IPO ourselves; we had difficulty attracting people to come on,” Mr Gillespie said.
“I knew David and his background, I went to him and in the first place to say ‘we wouldn’t mind some advice on how we would shore up some investors and make sure the organisation could get through the IPO and go ahead’.”
Initially going along to help ISA, Mr Murray listened to the company’s presentations which piqued his interest.
“I thought what they were doing was unique and they’re a can-do style of operators, which I like. Supporting a start-up is something I like doing, it’s got all the commercial challenges that I like,” Mr Murray said.
The company listed in January 2013, raising $12 million with its IPO at 20¢ a share.
The stock peaked at more than 75¢ in September, and was up 200 per cent in 2013. Shares are trading at 60¢. In December, Mr Murray made a personal investment in the company, purchasing 2.2 million shares at 45¢ each.
“Around that time as well, we were obviously very keen to try and get David on the board,” ISA chief executive Wayne Jones said. “He was very busy late last year with a whole bunch of other things going on.”
It wasn’t long before Mr Murray, who was appointed to head the federal government inquiry into Australia’s financial system, joined the ISA board.
“We’ve got a growth strategy where we will be building another four facilities, around Australia,” Mr Jones said. “We have just signed a joint-territory development agreement [with] SkyVenture, our supplier, and that guarantees us supply and gives us exclusivity of Australia and New Zealand.”
ISA is yet to generate any trading revenue because it is still in the construction phase of development, but if its global take-up of indoor skydiving is any indication, its growth outlook looks strong, Veritas Securities analyst Brent Mitchell said.
“History has shown that these have been very successful. Two recent installations in Texas, Dallas, and Austin, have had a very high utilisation rate and have demonstrated very high margins in the initial years.”
The company’s strong connection to the armed forces should also give it the opportunity to sign training contracts.
Mr Jones, who spent 21 years in the military and 15 years in the Special Air Services Regiment, training free-fall within the unit, said ISA has been in discussions with the Australian Defence Force to use the company’s facility once completed.