Skydiving in Wollongong may have been grounded since June, but Experience Co chief executive John O'Sullivan is confident business will soon reach great heights again when a large percentage of Australians become fully vaccinated and state borders reopen.
Experience Co, the owner of Skydive Australia, made a loss in the last financial year but has continued to invest and diversify its adventure tourism business.
It has also helped the Black Dog Institute launch an annual fundraising skydive for mental health and provided skydiving experiences for people with a disability.
Mr O'Sullivan said the latest acquisitions include lifestyle experience business Wild Bush Luxury and The Maria Island Walk in Tasmania.
In early 2022 the company plans to complete construction of a new tourism and science pontoon on the Great Barrier Reef. It has also just launched a new helicopter drop zone at Surfers Paradise.
Back where the business began in Wollongong, he said there had been no jumps for two months but Skydive the Beach was preparing for a busy 2022.
Based on the return of business after the 2020 lockdown, he expects a similar response when Sydney next comes out of lockdown.
"We know we have a very resilient business and we know skydive bookings will snap back very quickly," he said.
"What we saw with the Wollongong drop zone when it was able to operate again after lockdown late last year was it did upwards of 70 to 80 per cent of what it had been doing pre-COVID.
"Wollongong is an iconic location globally to skydive over which is why it is definitely one of those sites that bounce back quickly."
Mr O'Sullivan said for the last two months casual Skydive Wollongong staff and contractors have been able to access Government assistance programs while the business has been keeping its full time staff busy making preparations for summer.
"While they are finding it difficult at the moment they also share our optimism about what is ahead of us," he said.
"I think they all know there are working for a business that has a good balance sheet, low levels of debt and a very supportive Board and management that will be able to bounce back out of this.
"We know when Australia opens our business can perform strongly. We are here for the long haul. And we would like to thank the people of Wollongong for continuing to support us."
For the last financial year Experience Co's underlying earnings before interest, taxes, depreciation and amortization was $6.8 million compared to $9.2 million in revenue the previous year.
Its statutory net loss after tax was $4.3 million compared to a $51.4 million loss the year before when bushfires really impacted the business.
Mr O'Sullivan said he was confident about the future because the balance sheet remains healthy with cash and cash equivalents of $13.3 million and net debt of $2.8 million.
"We are very happy with the results given we have had some of the most challenging and volatile trading conditions Experience Co has endured in its 21 years," he said.
"To get revenues of just over $44 million, to have an underlying EBITDA of $6.8 million and to have a vastly improve statutory loss from FY20, we were very happy with that.
"And the Board has been very supportive of managements inclination to continue to invest."
With bookings already solid for Experience Co's walking tour operations in 2022 and 2023 the company is also very interested in bushwalking opportunities with the Great Southern Walk and Grand Pacific Walk.
"Wollongong is where our company originated from and we have a great affiliation with this part of NSW," Mr O'Sullivan said.
"So we are very interested about being involved in that walk. And have had some initial discussions with the NSW Government."
Mr O'Sullivan said the vaccination rate presently being seen in Australia and New Zealand was encouraging for improved trading conditions towards Christmas.
But ongoing lockdowns are expected to continue to significantly impact trading in the first quarter of the new financial year.
Mr O'Sullivan said despite lockdowns domestic demand has exceeded expectations.
And has accelerated swiftly when markets reopen
Mr O'Sullivan said the impacts of the coronavirus pandemic will continue to create short term uncertainty in domestic tourism markets.
But the business is confident it has weathered the worst of the storm and will be around for many more years.
"Seeing out the last financial year without a need to raise capital while maintaining the earnings capacity of the business is an achievement of which we are extremely proud," he said.
Mr O'Sullivan said the pandemic and the vaccination rollout in Australia and New Zealand will be key factors in the timing of any future acquisition activity.
But the business will continue to look to expand.
Mr O'Sullivan said a key to improved trading conditions leading into the peak summer period later this year will be the timing of the easing of lockdowns and interstate travel restrictions.
But he doesn't expect to see any meaningful international travel in the next 12 months.
Mr O'Sullivan said the Black Dog Institute fundraiser in April was a highlight of the year for him and he is looking forward to the next CEO Skydive for Mental Health in 2022.
The April event involved a group of Australian business leaders taking to the sky to raise money for critical research that helps support mental health and suicide prevention.
Mr O'Sullivan said Experience Co realised the pressures of recent events such as COVID-19 and how the devastating bushfires of 2019/20 had resulted in an increase in mental health issues.
He said research from the Black Dog Institute showed 78 per cent of Australians believed their mental health had worsened as a result of COVID.
And one in five working-age people are currently experiencing mental illness, most commonly depression and anxiety,
Realising the toll the pandemic and fires have taken on so many people both physically and mentally Mr O'Sullivan wants to do even more to help in the year ahead.
He said the annual CEO Skydive for Mental Health is not just about raising money but creating awareness.
Experience Co statistics
- Workforce - 600 people
- Drop zones - 17 across Australia and New Zealand.
- Walking tour locations - Cairns, Port Douglas, Northern Territory, South Australia and Tasmania.
- From skydiving in Wollongong to the adventure tourism world
- Wollongong skydiving takes off into big blue
- Wollongong's Skydive the Beach acquires Byron Bay Ballooning
- Did you know visitors spend $710 million in the Illawarra each year?
- From North Beach to South Island. There is no upper limit for Skydive the Beach