xReality Group Limited (XRG) specialises in building and operating immersive XR products and experiences that enhance lives. xReality Group’s portfolio includes physical and digital simulation used across the enterprise, defence and consumer markets. Using technology we create experiences without the physical limitations found in the real world.
XR stands for eXtended Reality, and is a catch-all term for Virtual Reality (VR), Augmented Reality (AR) and Mixed Reality (MR). Extended Reality combines physical and digital simulation for both consumer and enterprise market segments. The XR category is growing rapidly with the market predicted to grow from US $26B in 2020 to US $905B in 2027. Facebook’s parent, Meta, is investing $10Bn US/year alone into accelerating development of the Metaverse.
The Company was founded by two ex-SAS soldiers to bring the joy of simulated human flight to the region through cutting-edge indoor skydiving facilities. In recent years, the Company has expanded its simulation portfolio from indoor skydiving to include out of home virtual reality entertainment, defence XR training and XR software development.
xReality Group companies include Operator XR, a Defence and Law Enforcement simulation training company, Red Cartel, an XR production company, two Australian iFLY Indoor Skydiving Facilities, and four FREAK Virtual Reality venues.
The Company listed on the ASX on 18 January 2013 as Indoor Skydive Australia Group Limited (ASX:IDZ) and was rebranded to xReality Group Limited ASX: XRG on 8th December 2021.
Construction at our iFLY Perth Facility is tracking well, with the Return Air Tower (RAT) walls being constructed and the flight chamber well into assembly. Our programme of work is on track for the end of 2016 opening with all tunnel equipment now onsite ready for assembly and installation. Follow all the latest via our Facebook page: iFLYDownunderPerth
iFLY Perth is moving in leaps and bounds as the Piling is completed and Capped. The piles were driven to a maximum depth of almost 14 meters in preparation for the excavation.
Excavation commences this week, which will see the heavy machinery move in to dig down 5 meters to form part of the Plenum (basement) of the facility. This is a major milestone in the construction of iFLY Perth.
FOLLOW US: facebook.com/iFLYDownunderPerth
iFLY Perth construction teams have been onsite preparing the groundworks. Over the next few weeks the site will be transformed, as we start the build of our 14ft diameter vertical wind tunnel, and bring the thrill of flying to Western Australia.
For more information, follow us: facebook.com/iFLYDownunderPerth
Read the Equity Research report conducted by Veritas here.
Appointment of iFLY Perth Builder and Commencement of Construction Indoor Skydive Australia Group Limited (ASX: IDZ)(ISA Group) today announced that Metrowest Construction Pty Ltd (Metrowest) has been appointed as the builder for iFLY Perth, our third indoor skydiving facility.
Metrowest has been selected following the completion of a thorough tender process, which included:
The more sophisticated tender process was led by Point Project Management (PPM) whom ISA Group appointed in early November 2015 to provide additional costs transparency and control throughout the project.
Metrowest has been engaged to perform the works in separable portions which means that each stage of the works is completed within a timeline specific to that portion of works and that the progress and quality of each stage is assessed and accepted before approval is given to proceed to the next stage.
The first stage of the works will commence immediately and include the completion of design to building license submission, installation of piles and capping beam and the related earthworks.
Under the contract all the requirements for the commencement of operations are programed to be completed to enable iFLY Perth to open in the last quarter of 2016 with an expected capex of $14 to 15 m.
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Indoor Skydive Australia Group (IDZ) – Buy
Price: $0.380; Target Price: $0.54
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Company Update
Event
IDZ recorded their maiden EBITDA positive result of $33k, as revenues from the Penrith centre increased 20% to $3.7m for the half.
The Penrith centre delivered operational EBITDA of ~$2m, representing an EBITDA margin of 55%. Average utilisation for the period was 66%, up from 64% in pcp. First timers percentage of flyers increased to 59%, from 53% in FY15.
Impact
Despite the delay in the opening of Gold Coast, IDZ’s maiden EBITDA positive result highlights the point of inflection that the business has entered on the back of its high margin centres. We estimate a cost impact from the Gold Coast of ~$0.5m before missed revenues.
The 20% revenue growth for Penrith is encouraging in our view, showing IDZ’s ability to drive interest beyond the initial opening period and providing an earnings base expectation for future centres. We believe this de-risks the long term investment thesis.
In addition, IDZ’s ability to increase the % of first timer flyers from 53% in FY15 to 59% provides some comfort around the ability to drive new business and potentially deliver a more sustainable earnings profile.
We have adjusted our earnings estimates to reflect 1H16 actuals as well as shift out the Perth opening to the end of CY16, impacting FY17 estimates.
Investment View
We retain our BUY rating and target price of $0.54. In our view the current valuation appears to not reflect the upside potential related to the operating leverage from the high margin centre rollout.
With the launch of Gold Coast now complete, we anticipate some earnings uplift in 2H16, with FY17 benefiting from a third centre and a full year contribution from the Gold Coast.
Kyle Twomey
moelis.com
Gold Coast, QLD: iFLY Indoor Skydiving, the Gold Coast’s latest and much anticipated tourist attraction, has announced flights have officially taken off!
The ISA Group is proud to announce that their second iFLY facility is now well and truly open to the public ready to bring the thrill of skydiving indoors for anyone aged 3 to 103.
Indoor Skydive Australia Group CEO Wayne Jones is thrilled with how well the new facility is going even before its official opening date stating that “we have had great local support for the facility and feedback that has instilled confidence that our Gold Coast facility will be just as popular as our location in Sydney”. “Now that it’s open, we anticipate that everyone on the Gold Coast is going to love this brand new attraction to their area” continues Jones.
Gold Coast Mayor Tom Tate first visited the facility in November and comments the new attraction will be an innovative and creative asset to the city. “The Gold Coast’s success as Australia’s No 1 tourism city is built on the fact we continually renew our attractions and services for both residents and tourists,’’ quotes Mayor Tom Tate, “This is another example of how confidence in our city is increasing, meaning more investment, more jobs and more exciting attractions for locals and tourists alike”.
CEO Wayne Jones concurs stating “It’s incredible to know that we are not only bringing the joy of flight to people on the Gold Coast, but we are also investing in the city and committing to the community through the provision of jobs and an amazing sporting activity for Gold Coast locals and tourists alike.”
Indoor Skydive Australia Group currently employs over 50 staff members with 25 local jobs created in the Gold Coast. This is expected to increase over the coming years with expansion plans already in the works.
“Aussies absolutely love Indoor Skydiving and the amount of flying time we have sold since we birthed the idea back in early 2014 is phenomenal”, comments Brett Sheridan, ISA Group CMO.
“We have watched it develop into a national sport and we have also seen more people than ever give it a go”, continues Sheridan, “it really is a unique experience that is proving to be the go-to activity for everyone from families to adrenaline seekers!”
iFLY Gold Coast is taking bookings now with two flights starting from only $99.00.
iFLY Gold Coast is now open and flying!
More information on our iFLY Gold Coast Facebook page and to BOOK: ifly.com.au OR CALL 1300 366 364
Indoor Skydive Australia Group Limited (ASX: IDZ)(ISA Group) today announced that commissioning of the 12 foot indoor skydiving vertical wind tunnel at iFLY Gold Coast has been successfully completed.
iFLY Gold Coast is the world’s first 12 foot diameter single return facility designed by our technology supplier – SkyVenture. The more compact design allows ISA Group to commercially exploit more challenging locations such as Surfers Paradise where size and footprint is limited by the environment.
The commissioning process involved control engineers, variable frequency drive technicians and chiller technicians working together over four different phases to examine, test and balance the sophisticated vertical wind tunnel componentry. The commissioning was completed in conjunction with the specialist SkyVenture commissioning team in just over 4 weeks.
Post commissioning the next stage of construction focuses on completion of the regulatory requirements for certification of the building’s classification prior to the issue of a final certificate for occupation and use.
iFLY Gold Coast is expected to open commercially in late January/early February.
Indoor Skydive Australia Group Limited (ASX: IDZ) announced that it has appointed Point Project Management (PPM) to provide project management services for our Perth Project.
Prior to engaging PPM, ISA Group conducted an intensive tender process to identify a provider with a local Perth presence as well as a national footprint, experience in complex commercial builds and the ability to deliver the project.
An initial detailed program has been developed for the construction of the project with PPM which includes the appointment of the head builder later in January, with construction to commence shortly thereafter. This will enable the project to be completed mid 2016 in accordance with our timetable.
PPM will undertake the project management of the Perth Project under the direction of ISA Group. By appointing PPM, ISA Group has been able to leverage off their local Perth expertise avoiding the additional costs associated with project management based in the Eastern States.
The appointment also includes independent quantity surveying services to provide additional cost controls. The appointment of PPM has been included in the total estimated capex for the project and does not represent an additional cost.
ISA Group’s Perth Project is our third indoor skydiving facility comprising a 14ft vertical wind tunnel. The facility will be located at 143 Great Eastern Highway Rivervale within 5km of the Perth CBD and on the popular commuting route to the international and domestic airports.
Read the Moelis & Company Research Report on ISA Group here