Ann: Half Yearly Report and Accounts, page-15

This is NZ's biggest (by capitalisation) and probably one of two of three world class companies) possibly xero and mft being the others). No question their masks are held in high regard and there's a trend toward nasal high flow therapy. FPH have always had good products, but the share price only really took off in 2014 due to a concerted shift in standards to using this type of therapy. They have consistently churned out new and improved products through their R&D division as well, which is really important to keep their market position. Their hedging is always done extremely well helping them to foreign revenue (99% of it) cash flow.

They're committed to achieving revenue at a CAGR of 12% p.a, with roughly a 30% operating margin (conservative). They were also surprised that people might've construed their capex forecast a a 'jump'. To achieve their revenue growth targets they'll need capacity. This all tells me that the impact of covid isn't as short-term as some might expect. It's been a pull-forward in hardware sales, but given roughly 75% (historically around 85%) of revenue is from consumables, it underpins future growth. Another plus is the big push into international markets and going direct through their own sales teams. This has better control than distributors, especially with forecasting and obviously margins too. They have enough of a reputation and presence now (over 50 countries) to maintain this approach. In the investment presentation they said it was a 20 billion NZD revenue opportunity pa, and is less than 2b currently.

Looking back from 5 years ago to now, the share price is up 280% but EPS and dividends are up around 300%. Operating margins are 800 bps higher from that period too, although gross margins are similar (65%).

So the PE ratio has predominately been high 30s and early 40s, yet the share price has subsequently followed suit neck and neck with eps/dividend growth.