WEBVTT - F&P Healthcare 41 years on: Lewis Gradon 0:00:05.920 --> 0:00:08.760 Curre and welcome to this episode of Shared Lunch, which 0:00:08.760 --> 0:00:11.719 we recorded at the headquarters of Fisher and pikell Healthcare 0:00:11.800 --> 0:00:13.360 and his Tamaki Auckland. 0:00:13.920 --> 0:00:15.440 Fish and Pike is probably. 0:00:15.080 --> 0:00:18.239 Best known for its design and manufacturer of systems and 0:00:18.280 --> 0:00:22.200 products to help with respiratory issues and obstructive sleep apnea. 0:00:22.560 --> 0:00:25.759 I'm Helen Madison and to talk about this milestone and 0:00:25.800 --> 0:00:28.760 Watson Storff for the next thirty years in all its 0:00:28.800 --> 0:00:32.280 plans and went on tour at the East Tomackie campus 0:00:32.680 --> 0:00:35.280 courtesy of Managing director Lewis Graydon. 0:00:36.320 --> 0:00:40.080 Investing involves risk. You might lose the money you start with. 0:00:40.520 --> 0:00:44.320 We recommend talking to a licensed financial advisor. We also 0:00:44.360 --> 0:00:49.159 recommend reading product disclosure documents before deciding to invest. Everything 0:00:49.159 --> 0:00:51.760 you're about to see and hear is current at the 0:00:51.800 --> 0:00:52.680 time of recording. 0:00:53.200 --> 0:00:54.800 So let us tell us about the site that we're 0:00:54.840 --> 0:00:55.880 on here in East Tommocke. 0:00:56.640 --> 0:01:00.200 Sure, So this is one hundred acres. We've been here 0:01:00.240 --> 0:01:03.160 since two thousand and one. We're currently in the Daniel Building, 0:01:03.240 --> 0:01:05.880 which is the fourth of four buildings. Right now we 0:01:05.920 --> 0:01:09.160 have about four thousand people on this site, about nine 0:01:09.240 --> 0:01:11.240 hundred those involved in R and D couple of thousand 0:01:11.240 --> 0:01:15.280 involved in manufacturing. The fifth building is being planned right now. 0:01:15.319 --> 0:01:18.800 That's a hole in the ground over there that'll complete 0:01:18.800 --> 0:01:20.959 this site. We expect that to occur in the five 0:01:21.000 --> 0:01:23.319 to six year timeframe and that will be six to 0:01:23.360 --> 0:01:25.760 seven thousand people on this site at that time. 0:01:26.240 --> 0:01:28.520 Lewis R and D has always been a big priority 0:01:28.560 --> 0:01:30.960 for Fisher and Pikel and it's been pretty impressive given 0:01:30.959 --> 0:01:33.520 the short term things that companies that are listed, you know, 0:01:33.600 --> 0:01:36.720 need to focus on. Why is it such a passion 0:01:36.920 --> 0:01:37.839 for Fish and Pikel. 0:01:38.319 --> 0:01:41.120 Well, our whole business is based on having a therapy, 0:01:41.200 --> 0:01:44.600 having products, having technology that other people haven't got. We're 0:01:44.600 --> 0:01:47.640 trying to improve outcomes. That's the core of our business. 0:01:47.760 --> 0:01:50.680 And to improve outcomes, to do better than what you 0:01:50.760 --> 0:01:53.120 get today, you have to do R and D. And 0:01:53.160 --> 0:01:56.040 in a medical device business that R and D is 0:01:56.040 --> 0:01:58.120 a five to ten year timeframe until it starts to 0:01:58.160 --> 0:02:02.040 turn into regular, reliable and come people wise. R and 0:02:02.080 --> 0:02:04.920 D be about nine hundred people for us, and I think, 0:02:04.960 --> 0:02:07.920 as you said, it's roughly ten percent of revenue that 0:02:07.960 --> 0:02:11.000 we spend on R and D. But it's absolutely fundamental 0:02:11.040 --> 0:02:12.160 to our business model. 0:02:12.800 --> 0:02:15.200 And in terms of where the company is going then, 0:02:15.280 --> 0:02:17.920 I mean to sustain that. You think of some of 0:02:17.919 --> 0:02:21.320 those UIs companies that have got very deep pockets. How 0:02:21.360 --> 0:02:24.240 does a company that's doing it's R and D from 0:02:24.280 --> 0:02:26.760 New Zealand, how do you keep going well? 0:02:26.760 --> 0:02:30.000 First of all, anything we're doing, we'll invest whatever we 0:02:30.080 --> 0:02:33.799 think we need to do so on a global basis, 0:02:34.120 --> 0:02:37.520 these are relatively small, relatively niche things, and our R 0:02:37.520 --> 0:02:41.400 and D spend will be competitive with anyone whatsoever. And 0:02:41.440 --> 0:02:43.680 it's because we've chosen. If we've chosen what we're going 0:02:43.720 --> 0:02:46.400 to spend it on. Medical devices actually kind of suit 0:02:46.440 --> 0:02:49.160 New Zealand. We do have the skill set here. We 0:02:49.760 --> 0:02:52.800 you know, we have good I think we have a 0:02:52.840 --> 0:02:58.440 good engineering and science education system. We have a good 0:02:58.440 --> 0:03:01.520 hospital system and those are the two things that you need, 0:03:01.680 --> 0:03:03.760 and we have a good environment here for doing I 0:03:03.800 --> 0:03:06.960 would say very early stage clinical research. I think New 0:03:07.080 --> 0:03:09.440 Zealand does well on all three of those elements. 0:03:09.880 --> 0:03:11.520 One thing that we have at the moment, though, is 0:03:11.560 --> 0:03:13.799 what they call a brain drain. Our best and our 0:03:13.840 --> 0:03:16.880 brightest once they've graduated from university, they tend to be 0:03:16.919 --> 0:03:21.040 going off shore. How are you guys finding the ability 0:03:21.080 --> 0:03:22.239 to get the right people. 0:03:22.360 --> 0:03:25.320 Well, I'd like to think we're a brain magnet. I'd 0:03:25.440 --> 0:03:28.760 like to think we're attracting them, and I think we do. 0:03:29.880 --> 0:03:32.560 You know, every year I forget the exact number now, 0:03:32.639 --> 0:03:39.119 but we might hire eighty to one hundred STEM subject graduates. 0:03:39.480 --> 0:03:41.800 We get over a thousand applicants in New Zealand for 0:03:41.840 --> 0:03:47.000 those jobs, and as our international profiles grow on, we 0:03:47.040 --> 0:03:49.480 are able to attract people from outside New Zealand who 0:03:49.480 --> 0:03:51.240 want to come to New Zealand because they want to 0:03:51.240 --> 0:03:53.760 work for FISHERM Pikel. So we are able these days 0:03:53.760 --> 0:03:55.080 to bring people to New Zealand. 0:03:55.640 --> 0:03:59.160 Well, R and D always be here or do you 0:03:59.200 --> 0:04:01.040 also thinking of offshore too? 0:04:01.800 --> 0:04:05.320 It's something we're always thinking about. I do think we've 0:04:05.320 --> 0:04:07.960 got two things going. New Zealand is actually quite hard 0:04:07.960 --> 0:04:12.880 to beat for R and D in medical devices, and 0:04:13.000 --> 0:04:16.839 we always want to have our R and D closely 0:04:16.920 --> 0:04:20.880 located with clinical, closely located with manufacturing. Sometimes the R 0:04:20.880 --> 0:04:23.920 and D is maybe not the product idea. Sometimes the 0:04:24.000 --> 0:04:25.479 R and D is how do I make it at all? 0:04:26.200 --> 0:04:28.000 Sometimes the R and D is how do I make 0:04:28.040 --> 0:04:30.760 it cost effectively? So we want that R and D 0:04:30.880 --> 0:04:34.360 totally linked to manufacturing, So when we're thinking about where 0:04:34.400 --> 0:04:38.239 we might locate, it's the whole package. It's not really 0:04:38.360 --> 0:04:39.599 just R and D by itself. 0:04:39.680 --> 0:04:43.520 Now, if we think back to the beginning, when you've 0:04:43.520 --> 0:04:46.599 done your Bachelor of Science, you made it in physics, 0:04:47.080 --> 0:04:49.599 and you obviously needed a job. But the company you 0:04:49.720 --> 0:04:54.400 sure did, the company that you actually started in healthcare 0:04:54.520 --> 0:04:55.320 wasn't the main. 0:04:55.160 --> 0:04:57.400 Focusing, was it. So talk me through that. 0:04:57.760 --> 0:05:00.800 We had an applied technology division, was what it was called. 0:05:00.839 --> 0:05:03.479 That's what I started in, and that had a couple 0:05:03.480 --> 0:05:06.960 of technical products, and one of them was the respiratory hemaphorer. 0:05:07.720 --> 0:05:10.840 So that's what I joined in nineteen eighty three. 0:05:11.120 --> 0:05:12.680 There will be a huge amount of things that have 0:05:12.880 --> 0:05:14.240 changed in that time. 0:05:14.440 --> 0:05:16.240 Given we're now twenty twenty four. 0:05:16.960 --> 0:05:20.680 Is there one thing that has remained constant in those 0:05:20.720 --> 0:05:24.680 forty one years, Oh my goodness. 0:05:24.800 --> 0:05:30.800 I think the desire to improve things has stayed the same. 0:05:31.279 --> 0:05:35.479 The desire to innovate and be different that was existing 0:05:35.520 --> 0:05:38.360 in nineteen eighty three. I think that goes way back 0:05:38.400 --> 0:05:42.520 to the company's foundation that if you're going to compete 0:05:42.560 --> 0:05:45.080 globally from New Zealand, you're going to have to do 0:05:45.120 --> 0:05:47.480 something different and it's going to have to be better. 0:05:47.680 --> 0:05:51.200 What was it like when Fisher and pie Call separated 0:05:51.240 --> 0:05:52.760 from Fisher and Pikeel Healthcare. 0:05:53.160 --> 0:05:54.200 Is that two thousand and one? 0:05:54.320 --> 0:05:56.599 Yeah, that was two thousand and one. The company split 0:05:56.680 --> 0:06:00.240 into two. Technically, Fisher and Pikele Healthcare was the we're 0:06:00.240 --> 0:06:03.600 the continuing company technically, So the way we think of 0:06:03.640 --> 0:06:06.720 it is we spun off appliances. It's not the common view, 0:06:07.120 --> 0:06:09.360 but that's how we think of it. 0:06:09.640 --> 0:06:11.599 What would you say if we think now to twenty 0:06:11.640 --> 0:06:15.960 twenty four, what would you say is the problem that 0:06:16.040 --> 0:06:19.440 you're trying to solve and what is the potential for 0:06:19.560 --> 0:06:20.440 patients you can reach? 0:06:20.480 --> 0:06:21.080 Worldwide? 0:06:21.480 --> 0:06:24.320 We have a number of, let's say, therapies that the 0:06:24.360 --> 0:06:27.719 business has involved in, and they're all a little bit different, 0:06:28.200 --> 0:06:31.600 but what they all have in common is the idea 0:06:31.960 --> 0:06:35.640 that you want to improve outcomes. And for our business 0:06:37.400 --> 0:06:40.719 that can be a little more complex because for medical products, 0:06:41.720 --> 0:06:46.160 there can be someone paying for it, someone prescribing it, 0:06:46.800 --> 0:06:50.000 someone using it, and then of course the patient. So 0:06:50.040 --> 0:06:53.880 there's four different groups that we're trying to improve outcomes for. 0:06:54.760 --> 0:06:57.640 So that's the consistent thing across all of the therapies. 0:06:58.160 --> 0:07:02.240 Lewis let's break down what business does. I think hospital 0:07:02.320 --> 0:07:05.080 and home care are the two sort of structures if 0:07:05.080 --> 0:07:08.240 you like that you have and in terms of revenue, 0:07:08.279 --> 0:07:11.840 I think it's around sixty two percent for hospital and 0:07:11.840 --> 0:07:14.000 then home would be what about thirty seven percent. 0:07:16.000 --> 0:07:19.360 I see that home care if that's the right word, or. 0:07:19.440 --> 0:07:23.080 Just the home market if you like, is actually growing hugely. 0:07:23.760 --> 0:07:27.240 Is that because we're changing in what we need in 0:07:27.280 --> 0:07:29.240 our lives and what we can do at home, and 0:07:29.560 --> 0:07:31.400 it's taught me through the difference there. 0:07:31.640 --> 0:07:34.040 That's probably a trend and for us, it's probably in 0:07:34.040 --> 0:07:36.200 our future. But when we think of the business and 0:07:36.240 --> 0:07:37.920 we think of hospital and home care, they're kind of 0:07:37.960 --> 0:07:42.880 selling channels and global selling channels, and then within them 0:07:42.920 --> 0:07:46.360 we have different therapies. And within the home care channel, 0:07:46.600 --> 0:07:50.960 we've got obstructive sleep app near where we sell there 0:07:51.000 --> 0:07:55.080 we say masks. And then we've got a developing area 0:07:55.120 --> 0:07:58.160 which is in the early days, which is respiratory care 0:07:58.160 --> 0:08:03.720 in the home target at COPD chronic obstructive palm roy disease. 0:08:04.080 --> 0:08:06.119 And that's in the early days where we have a product, 0:08:06.160 --> 0:08:08.240 we have a therapy, we need to generate more and 0:08:08.280 --> 0:08:11.480 better clinical evidence. Well, you would expect more and more 0:08:11.680 --> 0:08:14.920 of healthcare wherever possible to be delivered in the home 0:08:14.960 --> 0:08:18.320 because it's more cost effective. So we think we're really 0:08:18.360 --> 0:08:21.640 well placed to take advantage of that in that we 0:08:21.680 --> 0:08:25.560 have the hospital business. Patients generally will move from a 0:08:25.600 --> 0:08:27.640 hospital to home or they're going to go hospital and 0:08:27.680 --> 0:08:30.640 back sooner or later. And then you know, combined with 0:08:30.680 --> 0:08:32.880 the home care global distribution, we think we're in a 0:08:32.880 --> 0:08:35.040 real good place and we think, you know, there's good 0:08:35.280 --> 0:08:38.120 promising signs for some of our therapies in the home 0:08:38.200 --> 0:08:39.200 for chronic disease. 0:08:40.440 --> 0:08:43.599 So you'd see the two still being parallel and you 0:08:43.600 --> 0:08:46.480 wouldn't see one overtaken the other like hospital obviously sort 0:08:46.480 --> 0:08:47.040 of dominates. 0:08:47.080 --> 0:08:49.160 Now, yeah, there's ebbs and flows. I mean there was 0:08:49.200 --> 0:08:51.440 a time when we say home care dominated, then there 0:08:51.480 --> 0:08:53.720 was a time when hospital dominated and so on. So 0:08:53.760 --> 0:08:55.280 I mean, I think that's one of the strengths of 0:08:55.320 --> 0:08:57.760 the business is you do have some ebbs and flows 0:08:57.800 --> 0:09:00.400 and some natural sets. 0:09:01.480 --> 0:09:03.800 Let's look at the home market too, because masks is 0:09:03.880 --> 0:09:05.520 one thing that you're quite well known for. 0:09:05.559 --> 0:09:08.120 But I understand this. You've launched a few new ones lately. 0:09:08.120 --> 0:09:11.120 I think this is solo and this is the micro 0:09:11.200 --> 0:09:13.679 nova I think number and is it even fuller one? 0:09:13.720 --> 0:09:17.000 I mean taught me through specialty there, because there's a 0:09:17.040 --> 0:09:18.360 real array now that you have. 0:09:18.640 --> 0:09:21.880 So the whole point of our Osay mask business is 0:09:21.920 --> 0:09:24.400 that we'd like to have a product where the customer 0:09:24.440 --> 0:09:26.720 could be the prescriber could be, the patient could be, 0:09:26.800 --> 0:09:30.360 the payer can see a difference between what our masks 0:09:30.400 --> 0:09:35.440 do and what the competitors' masks do. And Solo does 0:09:35.480 --> 0:09:40.440 that for us by being the first mask globally that 0:09:40.600 --> 0:09:42.720 just automatically adjusts. You can put it on and it 0:09:42.760 --> 0:09:46.440 automatically adjusts. And that's important because patients are using these 0:09:46.480 --> 0:09:49.400 masks all night, every night, or they should anyway. And 0:09:49.679 --> 0:09:52.640 that's all about, first of all, ease of use. You've 0:09:52.679 --> 0:09:54.360 got to be able to put it on properly, so 0:09:54.440 --> 0:09:57.480 it works properly and so it's comfortable. Solo does that 0:09:58.040 --> 0:10:02.319 and by adjusting automatically and then comfort and Solo does 0:10:02.320 --> 0:10:07.200 that again by adjusting automatically, and then the other masks 0:10:07.200 --> 0:10:11.439 you mentioned the Nova range, that's about some we're also 0:10:11.600 --> 0:10:13.959 kind of in a sort of a consumer market here 0:10:13.960 --> 0:10:17.559 now where people have preferences. Some people don't want something 0:10:17.720 --> 0:10:20.960 adjusting automatically. They want to do it themselves, and so 0:10:21.080 --> 0:10:24.040 that's what the Nova range are doing for us. 0:10:24.280 --> 0:10:26.800 In terms of hospital though, one of the areas I 0:10:26.800 --> 0:10:29.760 wanted to talk about was anesthesia. That seems to be 0:10:30.240 --> 0:10:33.880 a growing area. Can you talk me through where that's at. 0:10:34.280 --> 0:10:37.559 So one of our therapies nasal high flowers of respiratory therapy, 0:10:37.800 --> 0:10:40.360 and that's been around for a good do you forget 0:10:40.360 --> 0:10:43.600 exactly now fifteen years or so, and it's always been 0:10:43.640 --> 0:10:48.360 available in anesthesia, and we didn't get as much uptake 0:10:48.360 --> 0:10:51.600 in a anesthesia as we might have liked. So we've 0:10:51.640 --> 0:10:54.760 done two things over the last three or four year 0:10:54.840 --> 0:10:58.200 time frame. And the first one is we've iterated the 0:10:58.200 --> 0:11:03.920 product offering with some consumbles that are specifically for anesthesia 0:11:03.920 --> 0:11:09.240 and targeted at the anesthesia opportunity. And the second thing 0:11:09.240 --> 0:11:12.160 we've done is in our global salesforce, rather than having 0:11:12.559 --> 0:11:18.119 one hospital salesforce, we've split it into a specialist anesthesia 0:11:18.240 --> 0:11:20.960 salesforce in a respiratory salesforce, and that's getting us a 0:11:20.960 --> 0:11:23.960 better result, better growth than the anesthesia component. 0:11:24.360 --> 0:11:26.439 You still see potential in that market. 0:11:26.120 --> 0:11:28.880 Though massive, and across everything we do, we still see 0:11:28.920 --> 0:11:34.199 massive potential. We tend to think about number of patients 0:11:34.200 --> 0:11:37.400 globally that would benefit from our therapy and how and 0:11:37.440 --> 0:11:42.200 how many patients were addressing. So in that anesthesia opportunity, 0:11:42.960 --> 0:11:46.599 we conservatively, conservatively say at least fifty million patients a 0:11:46.679 --> 0:11:50.720 year would benefit globally, and we don't get anywhere near that. 0:11:51.280 --> 0:11:54.880 In respiratory opti flow nasal high flow, we'd say that's 0:11:54.880 --> 0:11:57.960 at least fifty million. So combine that's one hundred million patients. 0:11:58.280 --> 0:12:01.360 Last year we treated about six million. So you know, 0:12:01.360 --> 0:12:02.480 we've got a long way to go. 0:12:03.240 --> 0:12:04.960 And what is it you have to do? Is it 0:12:05.280 --> 0:12:08.640 talking to clinicians? How do you know? 0:12:08.840 --> 0:12:09.120 Grow? 0:12:09.480 --> 0:12:11.679 Yeah, this is the core of our business and I 0:12:11.679 --> 0:12:14.560 think it's one of the strengths. It's about changing clinical practice. 0:12:14.920 --> 0:12:18.480 You used to treat patients like this. Now if you 0:12:18.520 --> 0:12:22.240 treat them like that, you can get better outcomes. And 0:12:23.160 --> 0:12:26.480 that no matter what you do is really it does 0:12:26.559 --> 0:12:31.160 boil down to prescriber by prescriber, hospital by hospital, physician 0:12:31.240 --> 0:12:37.480 by physician. It's helped with clinical evidence. Stronger clinical evidence 0:12:37.640 --> 0:12:40.600 makes it a more efficient process to change clinical help 0:12:40.720 --> 0:12:46.360 change clinical practice, clinical practice guidelines or another step. You know, 0:12:46.440 --> 0:12:49.920 when you have enough clinical evidence professional bodies or generate 0:12:49.960 --> 0:12:53.160 clinical practice guidelines. That helps, But it's just if you 0:12:53.200 --> 0:12:56.520 look at our penetration for nasal high flow, you know 0:12:56.880 --> 0:13:00.160 we're not even ten percent penetrated. It's fifteen years and 0:13:00.480 --> 0:13:04.240 clinical practice guidelines for respiratory applications first started coming out 0:13:04.480 --> 0:13:08.160 maybe three or four years ago. So it is a 0:13:08.160 --> 0:13:10.959 long process. But you know, the upside of that is 0:13:11.320 --> 0:13:14.800 you've got a long runway and you know it's sticky 0:13:14.920 --> 0:13:16.080 once you've changed it. 0:13:16.160 --> 0:13:18.240 Once you've done that. The other thing too, though, the 0:13:18.280 --> 0:13:20.839 people that are selling in your salesforce, that are selling 0:13:20.880 --> 0:13:24.440 in these therapies and products and systems and the like, 0:13:25.080 --> 0:13:28.480 they have to be pretty amazing if you like, I 0:13:28.480 --> 0:13:31.240 mean not just your average salesperson. If I can say 0:13:31.280 --> 0:13:32.400 to those tombs. 0:13:32.080 --> 0:13:33.760 I mean, it sounds like they've got. 0:13:33.679 --> 0:13:40.120 To you to you know, a clinician who may have restraints, 0:13:40.559 --> 0:13:43.840 absolutely right, actually politics, you name it. 0:13:44.440 --> 0:13:49.320 Yeah, our salespeople are engaging with physicians and at different levels, 0:13:49.360 --> 0:13:52.400 they're engaging with clinical data and they're having debates with physicians. 0:13:52.440 --> 0:13:54.600 And we think one of the key strengths of our 0:13:54.600 --> 0:13:58.600 business is that that's really hard to do. It's quite 0:13:58.640 --> 0:14:02.079 complex and one of the hard and complex parts is 0:14:02.440 --> 0:14:04.880 upskilling and training your salesforce, and we think that's a 0:14:04.920 --> 0:14:08.200 core strength so that they're able and capable of doing that. 0:14:09.040 --> 0:14:11.600 If we look at the worldwide markets that you're in, 0:14:11.760 --> 0:14:16.320 I think there's Asia Pacific, does Europe, There's North America. 0:14:16.360 --> 0:14:17.800 It probably would be the big ones. 0:14:18.679 --> 0:14:21.840 I mean, they're developing and developed country, so you've got 0:14:21.960 --> 0:14:24.560 quite a mix there. So how do you balance what 0:14:24.760 --> 0:14:28.680 is perhaps a quite solid cash cow with another market 0:14:28.680 --> 0:14:32.280 that's got potential and you're thinking about innovating products for it. 0:14:32.680 --> 0:14:33.840 How do you strike that? 0:14:34.400 --> 0:14:38.240 Really good question, and that's an ongoing topic for us. 0:14:38.840 --> 0:14:42.120 We've got a couple of underlying rules. One is sustainable 0:14:42.160 --> 0:14:47.240 profitable growth, and the whole business is built on that concept. 0:14:47.480 --> 0:14:49.560 Everything we do we want it to be sustainable, we 0:14:49.600 --> 0:14:50.680 want to be able to do it for a very 0:14:50.680 --> 0:14:53.440 long time, and we want it to be profitable and 0:14:53.480 --> 0:14:55.840 we want it to go. So one of the ways 0:14:55.840 --> 0:15:00.360 we balance that is by adding people, adding salespeople, R 0:15:00.400 --> 0:15:03.760 and D to match our revenue growth. Because you can 0:15:03.800 --> 0:15:06.360 do that forever. It's when one gets ahead of the 0:15:06.400 --> 0:15:10.800 other you start to run into questions of sustainability. So 0:15:11.360 --> 0:15:14.360 we start off by matching our expense over the long term. 0:15:14.400 --> 0:15:17.000 We can't do it on every twelve months, but over 0:15:17.520 --> 0:15:20.360 several years we'll be trying to match our expense growth 0:15:20.360 --> 0:15:22.960 to our revenue growth. And then the debate is about 0:15:23.000 --> 0:15:26.680 where where to put it? Where to put it? Typically 0:15:27.640 --> 0:15:33.080 for the new businesses we will we will be adding 0:15:33.160 --> 0:15:36.520 expenses to match the revenue growth. 0:15:36.720 --> 0:15:41.200 Still, are there particular markets is more potential or that 0:15:41.240 --> 0:15:41.920 you're more. 0:15:41.720 --> 0:15:43.880 Interested in thom No, not really. 0:15:44.560 --> 0:15:47.000 It's kind of interesting if you take the world's if 0:15:47.000 --> 0:15:50.240 you rank the world's countries by GDP and you look 0:15:50.240 --> 0:15:53.720 at the top fifty, that pretty much reflects our business 0:15:53.760 --> 0:15:56.080 in those countries. Yeah, pretty much the same order. 0:15:56.720 --> 0:15:58.680 So it was with sleep at yea. Then what is 0:15:58.720 --> 0:16:01.120 the potential them? And how many people in the world 0:16:01.280 --> 0:16:04.400 suffer from that? I mean it's obviously something you've seen 0:16:04.440 --> 0:16:06.960 as a need, but what is the potential? 0:16:07.000 --> 0:16:10.080 I mean very hard one to say. You see numbers 0:16:10.160 --> 0:16:13.920 are banded around around the hundreds of millions, nine hundred 0:16:13.960 --> 0:16:17.320 million people a year. We're a little bit more conservative 0:16:17.320 --> 0:16:20.040 and we say potentially one hundred million a year maybe. 0:16:20.040 --> 0:16:22.520 And what about the respiratory aspects of the business. I mean, 0:16:22.560 --> 0:16:24.680 that's sort of a lot more broad well, it's. 0:16:24.560 --> 0:16:26.880 A bit of a moving target. At the moment, we'd 0:16:26.880 --> 0:16:30.200 say over one hundred million, but it's a little bit 0:16:30.200 --> 0:16:33.560 of a moving target in that as you get more 0:16:33.600 --> 0:16:38.840 clinical evidence, you can expand that possible market, as you 0:16:39.200 --> 0:16:42.040 iterate the therapies and the products and the technology, so 0:16:42.080 --> 0:16:44.800 again you can expand the reach of that product. So 0:16:46.440 --> 0:16:48.920 you know, our main job is to make sure we're 0:16:48.960 --> 0:16:53.480 nowhere near penetrated and that's about clinical research and product development. 0:16:54.400 --> 0:16:58.240 So we're looking at the manufacturing part of the site 0:16:58.280 --> 0:17:00.840 here it is Tamaki. Obviously this is the only place 0:17:00.880 --> 0:17:03.600 in the world you also manufacture in Mexico and China. 0:17:03.960 --> 0:17:06.720 What do we have here though, So what we're. 0:17:06.600 --> 0:17:14.320 Looking at right here is adult intensive consumables being assembled 0:17:14.520 --> 0:17:15.199 into kits. 0:17:15.840 --> 0:17:17.040 And here we are in New Zealand. 0:17:17.040 --> 0:17:19.560 But is this still somewhere which it's a real hub 0:17:19.560 --> 0:17:20.600 for manufacturer. 0:17:20.720 --> 0:17:24.080 So the plan is that we'll continue to grow manufacturing 0:17:24.080 --> 0:17:28.040 in New Zealand, but for geographical risk mitigation, we'll grow 0:17:28.080 --> 0:17:31.439 our manufacturing outside New Zealand at a higher rate. So 0:17:31.480 --> 0:17:33.879 we'll keep growing here, but we'll be growing Mexico, China 0:17:34.080 --> 0:17:36.520 probably other places over time. 0:17:36.840 --> 0:17:39.800 And how important is the aspect of the business of manufacturing. 0:17:40.560 --> 0:17:42.679 Well, we sell things, so we make the things to sell, 0:17:43.920 --> 0:17:47.200 So it's an absolutely fundamental part of it. And then 0:17:47.240 --> 0:17:50.439 for a lot of what we do, it's how you 0:17:50.480 --> 0:17:52.480 make it and how you make it cost effectively. That 0:17:52.720 --> 0:17:53.960 is the challenging. 0:17:53.520 --> 0:17:56.760 Part, especially from here in New Zealand. 0:17:58.920 --> 0:18:01.159 Well, we do have the tyranny of distance in New Zealand, 0:18:01.200 --> 0:18:05.280 and that's raw materials and product out. Yeah, it's not 0:18:05.320 --> 0:18:06.040 super helpful. 0:18:06.440 --> 0:18:09.560 Just lois thinking about the full year results, which the 0:18:09.600 --> 0:18:11.639 company released I think was the end of May, so 0:18:11.680 --> 0:18:14.639 only a couple of months ago. At the time, I 0:18:14.680 --> 0:18:18.480 think operating revenue was up ten percent, and then I 0:18:18.520 --> 0:18:21.600 think net profit after texts probably suffered a little bit. 0:18:21.640 --> 0:18:23.760 I think it was down forty seven percent. But there 0:18:23.840 --> 0:18:26.800 was some abnormals there. There was the Korreka site being revalued, 0:18:26.840 --> 0:18:29.520 There was some accounting I think which was about nineteen 0:18:29.520 --> 0:18:31.879 point three million, and then of course you had a 0:18:31.960 --> 0:18:34.199 recall which I think was going to be twelve million 0:18:34.359 --> 0:18:36.400 and that became about twenty million. 0:18:37.160 --> 0:18:38.240 So that we had a recall. 0:18:38.320 --> 0:18:41.679 Yeah, yeah, so that was probably you were trying to 0:18:41.680 --> 0:18:43.960 get back to having that lovely gross margin that you 0:18:44.040 --> 0:18:47.000 talked about before as sixty five percent, And just for listeners, 0:18:47.000 --> 0:18:49.720 the gross margin is when it's a proportion of revenue 0:18:49.760 --> 0:18:51.960 after you've stripped out all the costs and the like. 0:18:52.480 --> 0:18:54.600 You were hoping to get back to that, but was 0:18:54.640 --> 0:18:55.880 it because of the abnormals. 0:18:55.920 --> 0:18:56.520 Didn't quite. 0:18:56.920 --> 0:18:58.760 So the first thing for us is when we look 0:18:58.800 --> 0:19:01.480 at revenue, you still got co effects going on. So 0:19:01.680 --> 0:19:04.160 for FY twenty three, the year we just finished, we're 0:19:04.200 --> 0:19:07.359 lapping FY twenty four and you've got some COVID coming 0:19:07.359 --> 0:19:10.159 in and going andy twenty three, so it's hard to 0:19:10.200 --> 0:19:13.600 read much into FY twenty four's revenue growth. And then 0:19:13.720 --> 0:19:15.800 the next thing, when we get to gross margin, that's 0:19:15.800 --> 0:19:17.800 the difference between what it costs us to make something 0:19:18.000 --> 0:19:21.840 and what we sell it and a game, we've still 0:19:21.880 --> 0:19:24.320 got this long tail from COVID. Get sick of talking 0:19:24.320 --> 0:19:26.960 about it sometimes. Anyway, we've still got a long tail. 0:19:26.960 --> 0:19:30.560 We're during COVID. Our only priorities make as much as possible, 0:19:30.960 --> 0:19:38.439 as quickly as possible, and that's still hurting gross margin. 0:19:38.760 --> 0:19:40.320 But we think we just need to get back to 0:19:40.359 --> 0:19:42.560 our normal behavior and gross margin will get back to 0:19:43.040 --> 0:19:46.199 where it needs to be. So that's the lingering effect 0:19:46.240 --> 0:19:50.240 on gross margin. And then the next one down is 0:19:50.240 --> 0:19:52.920 when we take all of our operating expenses, that's the 0:19:52.960 --> 0:19:56.840 one that turns into the operating margin. And then the 0:19:56.880 --> 0:20:00.480 next step down is your net profit after tax. The 0:20:00.520 --> 0:20:02.720 net profit after tax is the one that was affected 0:20:02.760 --> 0:20:09.480 by land revaluation and recall and building depreciation, kind of 0:20:09.520 --> 0:20:12.400 all financial things and a little bit unusual for us, 0:20:14.040 --> 0:20:15.479 you know, to have all these one offs. 0:20:15.840 --> 0:20:16.680 Yeah, that's what I mean. 0:20:16.720 --> 0:20:19.640 So we're kind of fundamentally for the business looking through 0:20:19.760 --> 0:20:22.800 all all of those. Actually, on a twelve month basis, 0:20:22.800 --> 0:20:26.879 we're looking through those counting one offs, and then on 0:20:26.920 --> 0:20:29.080 a three to four year timeframe we're kind of looking 0:20:29.119 --> 0:20:32.600 through the gross margin impact as well. We just expect 0:20:32.600 --> 0:20:34.880 it to naturally improve over the next few years. 0:20:35.400 --> 0:20:38.240 And when you made the new announce the result you 0:20:38.320 --> 0:20:40.640 talked about, you did give a forecast at the time. 0:20:40.680 --> 0:20:43.040 I think it was between one point nine and two 0:20:43.119 --> 0:20:48.800 billion as an operating revenue, and that was quite impressive 0:20:48.880 --> 0:20:51.879 and also analysts seem to like that. One thing I 0:20:51.920 --> 0:20:54.400 did note though, that it doesn't take into account if 0:20:54.440 --> 0:20:56.800 we have another respiratory event. 0:20:56.960 --> 0:20:58.720 If you and I would have thought. 0:21:00.000 --> 0:21:02.520 Perhaps you're not going to say it publicly, but you'd 0:21:02.520 --> 0:21:06.280