@Vandelay your post captures exactly the same thought process I went through on reading the release this morning.

I think it is clear that hospitals stocked up on equipment and consumables, and that they may be temporarily overstocked, as hospital impacts of Omicron were less than health services in western world braced for. So we will reasonably see a few halves (?) where this works through. However, the pandemic provided a lot of evidence of the benefits of hospital hi-flow oxygen as an alternative to more invasive and risky intubation, and those learnings in clinical practice will in my (non expert) opinion gain traction as more and mre clinical studies are published showing the benefits. Plus the installed fleet of FPH equipment is now much greater, and more clinicians have learned to use them, so consumables demand will return in time.

I also attended the Investor Day in May of this year (slides available on FPH website but it was great seeing the product demos live), and was very impressed with the new innovations they have coming through for hospital applications of airflow and humidified air in surgeries. Their development teams are very closely integrated with some of the major hospitals in NZ, which foster and encourage clinical innovation.

So, my conclusion (subject to a model update) is that FPH is going to return to its historical and current target of doubling revenue every 5-6 years, maintaining a 30% EBIT margin.

What I also learned from the Investor day is that they price purely to achieve their target margin across the portfolio. CEO said they could price higher, but they don't want to make the market too attractive for competitors. They want to grow at these metrics ad infinitum!

This is great because event though healthcare is already shielded from a macro-downturn, they have pricing power at hand if needed.

I think FPH is a great company, and I now understand why it is one of Mark Moreland's favourites. I hold a 3% position IRL and am considering increasing weight on the current post-COVID SP weakness. I don't think I am going to wait for it to be cheap, because that might not happen.

When I buy next, I'll add on SM as well. But I will wait a few days and see if any more downgrades come through.

Disc. Held IRL