An update from Craig Poxon

Dear Member

I hope that you and your family and friends are keeping safe and well during these extraordinary times and I thank you for the messages of overwhelming support which I received in response to my last message. I tried to personally respond to each and every one of you, please continue to let me know your thoughts as they are very encouraging for all the hard-working staff and volunteers.

Supporting our Affiliated PTOs in most need

Since 21 March, your Council has been convening weekly each Saturday afternoon for a special virtual meeting. One of the most urgent items on our agenda over the last few weeks has been to consider requests from those of our Affiliated Parachute Training Organisations who are facing an existential crisis, for immediate and longer-term financial support for them to survive so that you, our members, can keep jumping when our sport resumes. We are all skydivers and just like you, we would not wish to see any drop zones close.

Council has, as you may know from my previous email to members, offered a two-part package of financial aid to our Affiliated PTOs in most urgent and genuine need.

We have announced more details about our financial aid package for PTOs, which comprises:

  • Matching pound-for-pound the Drop Zone Defence Fund (DZDF) to create a pot of £70,000 to disburse non-repayable grants, to a maximum of £5,000 per PTO, on application from those in most urgent and immediate need of a cash injection. Applications are being scrutinised by an ad hoc Finance Group of Council led by Tash Higman, our Treasurer, with staff support from Lise Moore, our Finance Manager.

The first DZDF emergency grant of £5,000 was approved by Council last Saturday, 11 April, and we intend to make the payment to the PTO this week, to help it to forestall an immediate cash-flow crisis.

  • Allocating an amount of up to £300,000 to provide longer-term interest-free loans on application from Affiliated PTOs who have a genuine need that cannot be met from any other source such as a government grant or loan, a bank loan, or support from any other official agency or financial institution.

Council’s Finance group is now meeting up to daily, Monday to Friday as required, to consider loan applications from PTOs, of which one has been received at the time of writing and we expect to receive more over the next days and weeks. All applications will be considered on a case-by-case basis and be subject to due diligence.

For the benefit of all our members, repayment of loans approved by Council will be secured. Security is likely to be by what is known as a chattel mortgage, and will benefit from sympathetic repayment terms including provisions in tune with the seasonal pattern of business at many PTOs as well as the slow return to normal operations, with higher monthly repayments during the peak summer season and lower ones during the winter months. The Treasurer has received a draft loan agreement template from our legal advisers, which should enable Council to agree the terms of its first loans at its next special virtual meeting this Saturday, 18 April.

I should explain the difficult balancing act that Council has had to perform in allocating the sum of £300,000 to the loan fund. Members of your elected Council are the Board of Directors of British Skydiving and as such we have legal duties and responsibilities to do all in our power to assure that British Skydiving can continue as a going concern.

British Skydiving has many obligations as the National Governing Body of our sport. These obligations include commitments to maintain a secure financial base. The British Skydiving Strategic Plan includes retaining adequate financial reserves to assure that the organisation will continue and survive for three years, both operationally and should the need arise to self-insure the sport, although with our indemnity limit now at £10M, this could only now reasonably be achieved through part or captive insurance. Over many years the Association, through forward planning and good housing keeping has built up strong reserves, which have been invested wisely.

Council’s fiduciary duties mean that, in its genuine desire to help Affiliated PTOs in real financial need that they cannot meet from any other source, it should not, however unintentionally, set British Skydiving itself on a path to bankruptcy. The COVID19 pandemic comes for us, as it does for the PTOs at the end of a long winter period when there has been very little jumping resulting in fewer Student Provisional memberships than we would normally expect. The lockdown also came at the end of our membership year where traditionally our immediate cash reserves are low (unlike at the end of our financial year in June which is often referred to incorrectly on social media) and we have seen only a ¼ of the normal annual membership renewals. So we, like everyone else, have cashflow issues. Did you know those staff who haven’t been furloughed have agreed to defer the payment of their salary to assist? It is also worth noting that we have trade debtors amounting to over £81,000. This is owed by PTOs who have not yet paid for Student Provisional memberships they have requested. We have already paid the insurance premium to the insurer for these memberships, whether the PTO has sold them on to a student or not. The value of our investments has also reduced since our annual accounts were published and we have been informed by one of our investment managers that a property fund we have invested in (c. £500,000) has suspended all dealings, therefore we cannot convert these investments to cash for the time being.

We know that this year and next we will operate with a large deficit. Our average non-discretionary costs over the past 3 years are £565,000. You will see at this rate our reserves won’t last very long. Please take a look at the Operating and Staff costs (notes 7 and 8) in our most recent Accounts and decide what you would cut to make it last longer? We are continually revising projections based on estimated potential return of revenue. The worst-case scenario of no income over the next three years results in the money available to loan being in the region of £300,000. This may appear to be cautious, and of course we will look to make savings wherever we can, but we don’t know how long this situation will continue and we will re-assess at a later date.

We constantly work behind the scenes with regulatory agencies and insurers just to assure that skydiving can keep going. If British Skydiving were to fold, it is very unlikely that you as a member would be able to get insurance coverage to the same standard we have now, which we believe to be unique anywhere in the world – this is just one of the things that, through the benefit of our all coming together as an association, British Skydiving does for us all.

Council is acutely aware of its legal obligations, and whilst the purpose of our reserves is clear from our Articles (item 4.1) and our Accounts (note 16), we are conscious of the symbiotic relationship with our Affiliated PTOs and our moral obligations to support those faced with an existential crisis in these unprecedented times as we are of our responsibility to our members to safeguard the sport as a whole. Council is determined to continue to do the right thing, both now and in what are likely to be continuing difficult times to come and we believe that by working together in the interests of everyone Council has met the challenge of this incredibly difficult balancing act.

Keeping our sport strong

If you have already renewed your British Skydiving membership for the new membership year that began on 1 April, thank you; From 1 April 2021, your subscription will be discounted for the period of downtime during which our sport is unable to operate because of government restrictions to contain the spread of coronavirus.

If you have decided to postpone renewal of your membership until later in the year, by which time the timetable for resumption of our sport should have become clearer, Council has already agreed to pro-rata the British Skydiving element of the membership subscription, so members pay only for the months remaining. We are liaising with our brokers, Romero Sport & Leisure, to seek agreement to the same or a similar arrangement from the underwriters of our insurance policy, to also cover that element of the membership subscription. I will let you know the outcome once we have it.

Your Council continues to work hard to seek to assure that members are not disadvantaged in the long run by the unexpected and difficult times we are all going through in the coronavirus national emergency.

By renewing your membership, if can do so at such a challenging time – and I fully recognise that this may not be possible just now even for some of our most passionate skydivers – you will be helping to keep our sport strong and helping British Skydiving to provide a vital lifeline of financial aid to those of our Affiliated PTOs facing an existential crisis, so they can still be there for us when better times come round again.

Keeping you informed

I am grateful to Liz Ashley, Editor of Skydive the Mag, and the team at Warners, our Magazine production and print partners, for their outstanding work in publishing the April edition, including a substantial stop-press re-write as the enormity of the effect of the national lockdown became clearer. Council is discussing with the Editor arrangements for the next two issues of the Mag, scheduled for June and August.

The British Skydiving website and social media are the places to visit for news updates. Last week, my colleague Council member Sam Lee, Chair of the Elite Performance Committee (EPC), posted an update about a special virtual meeting EPC had convened to consider arrangements pending the decision by FAI and its International Skydiving Commission, due by the end of May, on whether or not the Mondial 2020, due to take place this August, will be postponed or cancelled.

We’ll also be looking back on our social media on what was happening in our sport last year and over the last few years, to whet our appetite for when it’s wheels-off again. And don’t forget about honing your skills, especially their underpinning knowledge and understanding, on our social distance learning page, to which additional contributions will be gratefully received.

Half of our small staff team at British Skydiving are on furlough so we can benefit from the government’s coronavirus job retention scheme. Several of our staff still at work, all working from home and meeting at least daily on Microsoft Teams, have been working up to seven-day weeks to service special virtual meetings of Council, its ad hoc Finance Group (more about that below), its committees and some of their working groups, many of whom have had much additional business generated by the coronavirus situation.

The work of our staff team includes a sterling personal leadership contribution by Tony Butler, our Chief Operating Officer. Tony has drafted a raft of proposals for one-off exemptions and permissions from the Operations Manual so that members with ratings are not, as far as we can reasonably do so without compromising safety, disadvantaged by the current downtime in our sport when skydiving resumes, whenever that light at the end of the tunnel may be.

We have circulated the consultation document about one-off permissions and exemptions for feedback from Drop Zone Operators, Chief Instructors and others, with a call-back date for feedback of Friday 24 April. After that, we intend to put proposals to STC and Council. The aim is to have well-considered contingency arrangements in place that we can trigger once we are all clearer on the likely timetable for the resumption of our sport, as and when the government begins to set out its exit strategy to start to ease the current coronavirus restrictions.

Our heroes

I know many of us have relatives and colleagues who have contracted coronavirus and I know too of the heroes within our own membership who are contributing to the national effort in support of our NHS to save lives.

We are celebrating our very own heroes with our hero of the day on the British Skydiving website and social media. Please give them your support to show how much we appreciate them and others like them from within and beyond our own skydiving family. And if you know of a skydiver who should be recognised as our Key Worker Hero of the day, please let us know.

Council trusts that we shall continue to enjoy the support of you, our members, as we go on with our work, supported by our loyal staff, to do our best to enable our wonderful skydiving community to come out of the other end of all this in one piece.

Do please keep in touch. If you have any questions or suggestions, please email us and we’ll pass on your messages the relevant members of our team.

Stay safe and take care as we all look forward to being together again to enjoy those blue skies.

Craig

 

Craig Poxon

Chair of Council