Why Indoor Skydive Australia Shares Shot Up

Just recently, Indoor Skydive Australia Group Limited [ASX: IDZ] shares rose over 23.53%. Unlike their name, instead of diving they’re soaring through the stock market. Their market cap is now at $28.706 million, and they’re sitting on an enterprise value of $33.6 million.

Over the years, the share value of the skydiving business has significantly increased. Their market cap has remained steady over the past three or so years. A price to earnings ratio of about 0.1x shows that IDZ is still earning an adequate income rate. This has helped pay off their debts and manage further costs.

IDZ have been on the rise for quite some time, it became one of the top performing floats back in 2013, with a massive share market increase.

How did Indoor Skydive manage such an increase?

Founders Wayne Jones and Danny Hogan have had their eyes set on expansion since 2015. Their investment decision led to increased brand recognition. During this expansion IDZ also managed to maintain a steady cash flow. Their spending somehow didn’t affect the company’s overall income rate.

Although they’re based in Sydney, they have branched out all over the country. Since 2015 they have already built a new facility in the Gold Coast and Perth, as well as signing a developer-funded agreement in Adelaide.

Wayne Jones describes IDZ as ‘an expansion company; we have an aggressive board of directors and the strategy is to roll out the wind tunnels in Australia and south-east Asia.’ The founders have implemented this strategy while avoiding excessive debt.

What’s the next step?

More expansion. IDZ intend to branch out from just being an entertainment based company. They aim to do this by targeting the leisure market. They also expect Perth’s military to utilize their business.

They view IDZ as a global company, one which innovates both leisure and practical training. Both founders have a military background and as a result, they have won initial contracts with a few military branches.

 

Cheers,

Nathan Frangoulis,

Junior Analyst, Money Morning

PS: Want to find stocks with the potential to double, triple or even quadruple your money?

Check out these three small-cap stocks trading on the ASX right now. According to our small-cap guru, Sam Volkering, they could be on the verge of extraordinary growth.


Money Morning is Australia’s most outspoken financial news service. Your Money Morning editorial team are not afraid to tell it like it is. From calling out politicians to taking on the housing industry, our aim is to cut through the hype and BS to help you make sense of the stories that make a difference to your wealth. Whether you agree with us or not, you’ll find our common-sense, thought provoking arguments well worth a read.

Money Morning Australia is published by Fat Tail Investment Research, an independent financial publisher based in Melbourne, Australia. As an Australian financial services license holder we are subject to the regulations and laws of Corporations Act and Financial Services Act.


Money Morning Australia