Good afternoon. I'm Scott St. John, the Chair of Fisher & Paykel Healthcare Board. Welcome to the 2022 Annual Shareholders' Meeting. Today, we are very pleased to welcome you on the virtual meeting platform provided by our share register Link Market Services. Health and safety is a top priority at Fisher & Paykel Healthcare, and over the past two years, we have been acutely aware of the need to do the right thing by our people, our shareholders, and the wider community. We made the decision two weeks ago to hold our meeting fully virtually as we did not want our event to contribute to the spread of COVID-19 and flu, when numbers have been stubbornly high through these winter months. We appreciate your understanding, and we have every intention of returning to an in-person format in the future.
You are, of course, able to vote and ask questions both online and via the phone today. Please refer to the virtual annual meeting online portal guide for instructions, and if you need help, phone the Link Market Services helpline on 0800 200 220. Please note that there may be some brief pauses to account for the time delay between the phone line and the web stream as we move through the program. We appreciate your patience. On the information conveyed to me, I declare that a quorum of shareholders is present, and the meeting has been duly convened. I would like to introduce your directors to you. Joining me in the room here at our Auckland campus is Lewis Gradon, Pip Greenwood, Neville Mitchell, Donal O'Dwyer, Lisa McIntyre, Sir Michael Daniell, Geraldine McBride, and Cather Simpson.
The minutes of the last annual shareholders meeting have been approved by the directors and are available for inspection. The notice of meeting, including the explanatory notes, has been circulated to all shareholders, and I intend to take it as read. The first item on the agenda is the chair's address, where I will give you an overview of the company's performance, and you will hear from the chair of each of the board sub-committees. I will ask our Managing Director and CEO, Lewis Gradon, to provide an update. After addressing any questions on the financial statements, we will move to the resolutions contained in the notice of meeting. After each resolution is proposed, you will have the opportunity to ask questions with respect to that resolution.
Shareholders can submit questions online at any time prior to voting on the resolution by using the online question functionality, and those dialed in via phone can also indicate to the operator that they wish to ask a question. The slide presentation and speeches were released to the NZX and ASX today and are available in the investor section of the company's website at fphcare.com. To open this year's address, I want to start by thanking our customers and clinical partners, the people at the front lines who are using Fisher & Paykel Healthcare products to care for their patients. I would also like to thank the people of Fisher & Paykel Healthcare for their commitment. They have had to be incredibly adaptable to meet the challenges caused by demand surges, supply chain issues, and high rates of absenteeism due to illness.
As you know, the 2022 financial year was another extraordinary year. The company continued to respond to waves of COVID-19-driven demand across the globe, and Fisher & Paykel products were used by healthcare professionals to treat approximately 20 million patients. To put this into perspective, full-year operating revenue for the 2019 financial year was just over $1 billion for the first time ever. For the 2020 financial year, it was over $ 1.2 billion. For the 2021 financial year, it increased to nearly $ 2 billion. In May, we reported another strong performance for the 2022 financial year, with revenue of $ 1.68 billion and net profit after tax of $ 377 million.
While this was a decline year on year from 2021, it was still a strong performance in terms of both revenue and net profit after tax. The board approved a final dividend 0.225 per share, which was paid on the sixth of July. The total dividend for the 2022 financial year then was 0.39 per share, an increase of 4% from 2021. In the hospital product group, revenue was $ 1.21 billion for the full year, a decline of 19% from financial year 2021 and 19% in constant currency. Again, to put it in context, this was an 88% reported increase compared to the 2019 financial year before the pandemic.
Home care revenue was $ 469.5 million for the full year, which was a 1% increase over the previous financial year, or 2% in constant currency. Reported revenue for OSA masks was up 3% or 4% in constant currency for the year, and up 6% for the second half. Gross margin decreased by 59 basis points to 62.6% for the full year, down 147 basis points in constant currency, and operating margin was 30.1%. As you know, the company updated the market last Friday and provided guidance on the first half of the 2023 financial year. Lewis will take you through that in more detail in his address. The most important point to note is that the fundamentals for our business and our strategy have not changed.
We believe it is essential that we continue to make a significant investment in our research and development activities and sales teams, and we remain committed to our aspiration of doubling constant currency revenue every five-six years. We also remain committed to our building program. Our buildings are getting close to capacity, and in order to take advantage of new opportunities, we need more space. We are researching options to purchase land for a second New Zealand campus and are progressing an additional overseas manufacturing facility. We will update you on those plans as soon as we can. Now turning to your board. Last October, we welcomed Lisa McIntyre to the board as a non-executive director, adding a wealth of experience in health, strategy, finance, technology transformation, and data analytics.
Lisa is an experienced company director with a deep understanding of international markets and a reputation for insight, integrity and transparency. Cather Simpson joined the board this June, bringing her extensive experience in scientific research and involvement in high-tech companies. Cather is a professor of physics and chemical sciences at the University of Auckland and a partner at Pacific Channel, an early-stage investment company. She also serves on a number of advisory boards related to research and technology. Lisa and Cather are up for election today, so you will hear from them later in the meeting. Director Geraldine McBride has announced her intention to retire from the board with effect from the close of today's meeting. Geraldine has served as an independent director since August 2013, and she has been a valuable presence on the board during a period of significant growth for our company.
We have benefited greatly from her experience, drawn from a successful career working with some of the world's largest technology players. I'd like to give her the chance to say a few words about her tenure on the board. Geraldine.
Thank you, Chair. It's been an honor and a privilege to serve on the Fisher & Paykel Healthcare Board for the past nine years. What I'd like to do is to share with you today some of my reflections from my time while serving on this board. The first reflection that I have is that New Zealand can truly build great global brands, but what it needs is patient capital. Now, I spend a lot of time in the startup world, and a lot of small companies in New Zealand today that I observe are not getting access to that patient capital. I remember a story that Gary Paykel told me when I was at a Fisher & Paykel dinner one evening. It was part of my board induction.
He told me the story of how it took Fisher & Paykel Healthcare 10 years to make its first sale with its new innovative technology for humidified air and breathing circuits. Just look at now what that patient capital has yielded in delivering a truly great, iconic brand for New Zealand today. The second reflection I have is the importance of the culture of innovation, which Fisher & Paykel Healthcare has in spades. It has always really impressed me, and the passion, and it's what makes Fisher & Paykel Healthcare different, because they are there, every one of them, centered on patient outcomes. Innovation that starts with the patient at the center and the outcome you create is where value is created ultimately for shareholders, and it's what really matters.
The whole of the organization, from the top all the way through R&D, all the way through to the people that do the administration jobs, they're all driven by that. That's their purpose. That's what unites them. An ongoing innovation culture that's centered on the patient and the outcome is what's contributing to the ongoing creation of shareholder value and this company's success on the global stage. The third reflection of my time here is that this world has been faced with a world-changing COVID pandemic, and I have watched Fisher & Paykel execute and behave and lean into this pandemic with agility and also with the knowledge of continuous improvement. It doesn't just sit back and accept that the world needs to remain static.
It has this ability to continuously improve. Because the processes and the ways in which we are able to react to those pandemics is really, really important. The other thing that's important is the ability to also invest for the long term. These are the things that make working with this Fisher & Paykel team really, really important. I'm often asked to describe to people when they ask me, you know, "What's it like being on the Fisher & Paykel board?" I say that working with Fisher & Paykel Healthcare is a bit like working with a Swiss watch. It just kinda works. What I love about it is when things change, it's able to optimize and adapt wherever it can. Unfortunately, I think COVID is not behind us.
It's going to be something that the world is going to keep on, having to live with. I think that we have played an incredibly important role to help deliver better patient outcomes in that pandemic. The fourth and final reflection that I would like to share with you all is this opportunity around sustainable growth. That's really important because we're not a short-term growth thinker at Fisher & Paykel. What really matters is that because the R&D investment yield curves are so far in advance, it can take a decade to get a new therapy or a new product into market. It's critical that we're actually working on those new therapies to continue that sustainable growth now, and that time for that therapy proven and approved by a regulator.
This is another critical element of why and how Fisher & Paykel Healthcare has been able to double its revenues on average every five to six years. How many companies are doing that in the world today organically? Many of them in the sector are growing through acquisition, not through organic growth and innovation. On reflection, it's a sort of bittersweet time to deliver the speech today. I have loved working with Fisher & Paykel Healthcare. I love working with them on the five-year plans. What we're able to do with this and even discussions today, we're looking ahead at where the world is moving to, and have we created the right products to bring the right solutions to market and deliver that sustainable growth.
I think that as I'm stepping down as a director and I'm remaining as a shareholder, I can assure you, they really are thinking about that long-term sustainability and that sustainable growth. What a ride it's been, and you know, I look back at the revenues of what it was when I joined this board nine years ago, and it was 623 million. I checked the numbers and got them fact-checked as well. Then in the last financial year, it was 1.68 billion, and that's been an incredible growth, an incredible ride from a company that I think has got an amazing future ahead. As I said, I'm a shareholder, I am holding the stock. I reckon it's an undervalued stock in my opinion at the moment, and that's my personal opinion.
I will remain a friend of this organization. I'm looking forward to more great news from other friends and board colleagues at Fisher & Paykel. I'd like to thank you all very much for your support, both from an employee point of view, from board colleagues, from Fisher & Paykel management, and also to you shareholders who continue to support this wonderful New Zealand company. I will pass it back to you, Scott and Scott .
Geraldine, on behalf of the board, shareholders, and stakeholders, thank you for your significant contribution. With the appointments of Lisa and Cather and Geraldine's retirement, we maintain seven non-executive directors. Board succession is a priority for us, and we continue to seek directors globally with medical device experience. Fisher & Paykel Healthcare continues to support the Future Directors program, which gives people with governance potential the opportunity to participate on a board. Our new future director is Tracey Barron, who joined on the first of June. Tracey has more than 25 years of experience across a broad range of health-related roles with Southern Cross Group, Counties Manukau District Health Board, the New Zealand Ministry of Health, and Pharmac, and she has been a director of a number of healthcare businesses.
The board operates with the support of three subcommittees, which are the Audit and Risk Committee, the People and Remuneration Committee, and the Quality, Safety and Regulatory Committee. The chairs of each of these committees, Neville, Pip, and Donal, will now provide an update on the past year. Neville and Donal are standing for re-election as a director of the board at this meeting, so they will say a few words about that. First, we will hear from Neville Mitchell, who chairs the Audit and Risk Committee.
Good afternoon, everybody. The Audit and Risk Committee comprises of myself, Scott St. John, and Mike Daniell. We assist the board by reviewing and then reporting to the board on the company's financial reporting, risk management, and internal control processes. We also validate the company's strategies to mitigate the impact of major risks, including climate-related events and cybersecurity incidents. Our objective is to ensure that the company has the appropriate frameworks in place to enable high-quality decisions in complex situations. We have continued to develop our business continuity plans over the past year, developing systems and processes and teams to help coordinate and manage a complex and growing business. We test these processes by running regular simulations. Managing through COVID-19 has strengthened our approach to risk and our ability to respond in a crisis.
It saw us enhance our key relationships with suppliers, customers, as well as leaders in government, trade, and foreign affairs. Our board is confident that the business is now more resilient than before the pandemic began. The committee is also responsible for the governance of climate-related risks. This involves monitoring the company's global carbon footprint and ensuring that climate-related risks are embedded into the broader risk management process. This is in line with the recommendations of the Task Force on Climate-related Financial Disclosures, and each year, the business continues to improve its reporting on climate and other sustainability measures, and I commend that section of the annual report to you. Before I close, I'm standing for re-election as a director this year.
I've been with Fisher & Paykel for nearly four years and remain as committed as ever to our purpose of improving care and outcomes for our shareholders and, importantly, our customers. I believe my executive career, first with Cochlear and now my current directorships on a number of healthcare companies, including Nanosonics and QBiotics, provides me with a depth of experience in the medical device industry that can add value to Fisher & Paykel. With your support, I look forward to continue to work alongside my colleagues on the board and the wider team. Thank you.
Hello, everyone. The people in Remuneration Committee recently reviewed our long-term people and culture plan, and we believe we have the right approach in place to nurture our unique culture and to attract and retain the right people to achieve sustainable, profitable growth over the long term. Looking forward, the company's focus is on nurturing a positive and inclusive culture based on trust and respect that encourages our people to speak out openly and is free from bias, discrimination, harassment, and bullying. Our people, after all, are our greatest asset and are absolutely critical to our success. For our New Zealand teams, we continue to monitor pay equity between women and men in the same roles, and I'm pleased to see that there are no statistical difference between genders.
This year, we began to work with our global sales teams and Mexican manufacturing team to undertake the same gender diagnostic, which will be completed next year. I'm delighted to be able to report that in March of this year, we appointed Rachel Miller as our first diversity and inclusion manager, which demonstrates our ongoing commitment to diversity, equity, and inclusion. Rachel has been with the company for seven years, first as a product development engineer in the Airvo team, and most recently as a product manager in risk and assurance. Board succession planning is one of the committee's responsibilities, and as Scott mentioned earlier, that while we are farewelling today, Geraldine McBride, we are pleased to welcome Lisa and Cather onto the board as directors. As Scott also mentioned, Tracey joins us as part of the Future Directors Program.
The committee works to ensure that there is a range of skills, experience, and diversity represented on your board. As a committee, we review the company's remuneration policies and processes, and during the year, we have approved changes to the long-term variable remuneration instruments that are provided to selective executives, managers, and employees. We sought feedback from shareholders and proxy advisors as part of this process, and you will be seeing the proposed changes, the proposed outcomes in today's meeting resolutions. The main change to the 2022 performance rights plan and option plan from the 2019 versions is the removal of the retesting provisions at the fourth and fifth anniversaries of each grant date. I'd like to close by acknowledging the growth and empowerment of our employee groups, some of which include Manaaki, Spectra, and Women in Engineering.
The committee has had the privilege of listening to representatives from these groups throughout the year. By way of background, Manaaki is our indigenous leadership group. Spectra celebrates and enables the queer and gender-diverse community, and Women in Engineering provides a platform for women in technical roles to support each other. We're absolutely delighted that the Women in Engineering group has been nominated for an award at next week's Diversity Awards NZ.
These groups demonstrate that representing the diverse skills and unique lens that each person brings, combined with strong support from the leaders at F&P, is a powerful union that helps create an environment where people feel they belong and are engaging in their work. Thank you.
Good afternoon, everyone. The materiality assessments that the company has conducted over the past four years have always, not surprisingly, highlighted that our external stakeholders, together with our own people, view patient safety, product quality, and the health, safety, and well-being of our people as being of the utmost importance to our company. The Quality, Safety and Regulatory Committee continues to provide oversight in the areas of product quality, regulatory compliance, and employee health, safety, and well-being. The implementation of changes to regulations on medical devices in Europe remains a focus for the medical device industry in general and Fisher & Paykel in particular. We are doing a significant amount of work to ensure compliance with the revised regulations.
In the United States, the company has continued to build upon its strong relationship with the U.S. Food and Drug Administration, engaging with and supporting the FDA's strategic priorities and participating in the FDA's Case for Quality program. Additionally, the health, safety, and well-being of our people remains a key priority. This year has seen us continuing to navigate the impacts of COVID-19. The business has taken a proactive approach to health and safety throughout, meeting or exceeding local government regulations. The results have been that our manufacturing operations again continued uninterrupted, both here in New Zealand and in Mexico, which allows us to continue to provide products for our patients. Additionally, we encouraged our people to get vaccinated to help reduce the impact of COVID-19 infection.
In New Zealand and Mexico, we partnered with local health authorities to promote vaccination for our employees, and here in New Zealand, this was extended to drive-through vaccination clinics for our people and their families. To support employee well-being, the company offers access to counseling service through the Employee Assistance Program and is focused on returning to sustainable workloads for all. In addition to COVID-19 related safety and wellness initiatives, the business continues to monitor and review the application and performance of the occupational health and safety management systems and processes deployed globally. Emphasis remains on continued effectiveness of the risk controls in place to manage critical risks. It has been pleasing to welcome two new members to the Quality, Safety and Regulatory Committee over the past year. With Lisa McIntyre and Cather Simpson joining myself, Neville Mitchell, and Scott St. John.
We value the expertise and perspective that Lisa and Cather bring to the table. Finally, I wish to point out that I am standing for reelection at this year's ASM. It's been an absolute pleasure to have served as a director of Fisher & Paykel Healthcare for almost 10 years, and I welcome the chance to carry on in this role. I spent my executive career working for two large medical device companies, namely Baxter Healthcare and Johnson & Johnson, initially in Europe and then in the United States, and have also, until recently, served on the boards of medical technology companies Cochlear and Mesoblast. I believe that my experience in the global medical device industry provides useful insights to the company and complements the skills of my fellow directors. The opportunities ahead for this company are significant and exciting, and I believe that I can continue to add value.
It would be a privilege, with your support, to continue to serve. Thank you.
Thank you, Neville, Pip, and Donal. Before I close, I would like to thank you, our shareholders, for your long-term commitment to Fisher & Paykel Healthcare. Your investment made a life-changing difference during the COVID-19 pandemic, and your continued investment will help the company put innovative new products in the hands of healthcare providers for generations. I will now invite Lewis, our Managing Director and CEO, to say a few words.
Thanks, Scott. I'd like to echo Scott's acknowledgement of the doctors, the nurses, the respiratory therapists, and all the other healthcare professionals who have been caring for patients through what's been really some very difficult years. I also want to thank the people of Fisher & Paykel Healthcare. Those disruptions have continued this year, from illness-related absenteeism and isolation requirements to global supply chain issues and managing manufacturing capacity in the face of all that. Our people have shown a tremendous resilience, and we're hoping that the most acute phase of this pandemic is behind us now. Last Friday, we updated the share market and provided revenue guidance for the first half of this current 2023 financial year, which ends on the thirtieth of September.
We said that at current exchange rates and assuming a continuation of trading conditions from the first four months, we expect operating revenue for the first half of the 2023 financial year to be approximately $ 670 million, and net profit after tax to be approximately $ 85 millio-$ 95 million. This would be a 17% increase on pre-pandemic levels, as revenue in the first half of 2020 was $ 570.9 million. It would be a decline in revenue compared to the first half of the last financial year, which we're lapping and which was $ 900 million. Remembering that the last financial year had a significant benefit from COVID. Our half-year guidance assumes the following things in constant currency. First, that hospital hardware revenue reduces to a pre-pandemic level by the end of the half.
Second, that new applications consumables revenue is about 75% of the first half last year, which had those COVID-19 Delta hospitalization waves. That's still above pre-pandemic levels. Third, that invasive consumables revenue is approximately equal to the first half last year. Now, as we said in May and repeated in our market update last week, we sold around 10 years' worth of hardware in two years to hospitals all around the world. Our customers also purchased a considerable amount of hospital consumables in preparation of each wave of COVID-19. However, during the most recent waves of the Omicron variant, there's very clear data that hospitalized patients have required less intense respiratory support. We believe customer stock levels have been elevated during our first half, and that impacts our sales in the short term. As Scott explained, this does not change our long-term strategy in any way.
Before the pandemic, our long-term goal was to sustainably double constant currency revenue every five-six years. Our aspiration hasn't changed. We are continuing to invest in R&D and our global sales force. To plan for success, we're bringing forward some of our building plans. Now, these plans are highlighted in a video that we showed to employees at our results announcement in May, and we'd like to share that video with you now. Over the last two years, we've shown everybody, especially our customers, that they can rely on us no matter what challenges or what difficulties come our way. We're in a different place now to where we were 12 months ago. It's good to see our people reconnecting with families and friends and suppliers and customers. Some of those challenges still remain.
Supply chain is still challenging, logistics is challenging, and we still have to deal with COVID-19 in our communities from time to time. Our culture's been a really important part of how we've dealt with that, and it's also been an important part of delivering a strong financial result this year. Where to from here? Over the last two years, we've effectively sold 10 years' worth of our hospital hardware, and we've effectively had 10 years' worth of global expansion. That's a lot of new customers and new users that we can help change their clinical practice to use that hardware that they initially bought for COVID-19, use it to improve patient outcomes in general. That's not all.
We've also been focused on the long view, and I'm going to hand over to Andrew and Winston to tell you more about some of the exciting new products and applications that we'll be releasing to the market this year.
Hi there, everybody. My name's Andrew Somervell. I'm the Vice President of Products and Technology here at Fisher & Paykel Healthcare. The first product that I want to talk about today is the Evora Full Face Mask. This is a compact, full face mask, and it's the first of our full face masks that's got under-the-nose sealing technology. We launched this full face mask around October of last year, and since then, we've been rolling it out in different markets around the world. The most recent market that we've launched it in is the U.S. We've just received 510(k) clearance, and we've just begun sales in that market. Now, the feedback that we've got from both patients and customers that have been trying this mask has been absolutely outstanding.
Because of that, I'm really, really excited about what we might achieve with this mask. I do want to take a moment just to acknowledge the team that's developed this mask. It's been a very, very difficult process. The perseverance required by the team to continue on in the face of quite a lot of adversity is something that I'm really, really proud of.
The next product I want to talk about is Airvo 3 is our new platform for delivering Optiflow therapy and for treating patients with respiratory insufficiency. We had three different goals when we started this. The first was to expand the range of patients that Airvo could be used on. The second was to enable more clinicians to be able to use the Airvo device. The third was to enable Airvo to be used in more areas of the hospital. There's a lot of different technology that we've put in, but ultimately, all of that technology is aimed at those three goals. We Airvo 3 in New Zealand late last year. We're beginning to get some feedback from clinicians that are using it, and it's very, very good so far.
We're really, really optimistic about Airvo 3 is going to do for us in the future. It is a really, really important product for us. It's really going to set us up for growth for quite some time in the future when we look at our Optiflow business in that hospital environment.
Hi, I'm Winston, the Vice President of Surgical Technologies. It's been a really positive year for surgery and anesthesia, and the outlook is also looking really promising. This year, we've released the very first Fisher & Paykel Healthcare open abdominal surgery diffuser. This product helps maintain the patient temperature, it's easy to use, and it's also doesn't get in the way of all the complex surgical activities. Early feedback has been really positive. In anesthesia, we've recently announced two new interfaces, Optiflow Switch and Optiflow Trace. The Optiflow Switch interface is compatible with the traditional anesthesia mask. What this means is that you can use the traditional anesthesia full face mask whilst the Optiflow interface is still in place.
In terms of Optiflow Trace, what this is an integrated carbon dioxide sampling tube, and this product can be used for a whole range of procedures where it's really important to make sure patients are still breathing. These products in anesthesia, along with the anesthesia system, gives us really good confidence in this opportunity. In this year alone, we'll be putting in more sales reps to really accelerate that adoption. There are many other great products under development, and this ongoing innovation is what gives me confidence that we can change the clinical practice with so many millions of patients around the world and deliver sustainable, profitable growth in surgery and anesthesia.
Our experience over the last two years just reinforces the importance of continuing to invest in the future and having the ability to scale up at short notice. We're continuing to expand our facilities with the fifth building in New Zealand underway and due for completion during 2025. Our third building in Mexico is due for completion next month. We've started looking for a second site in New Zealand, and we've started looking for the third site for global manufacturing. The last two years has been remarkable for our company. It's highlighted the importance of our purpose of improving care and outcomes. At times, it's felt like a sprint and a marathon all at the same time. Now, as we move forward, whatever may come, we're as excited by the potential and we're as determined to realize it as we ever have been.
Well, as you've seen in the video, we launched two new products to facilitate the use of Optiflow in anesthesia applications, and that expands the total addressable market opportunity for our Optiflow high-flow therapy. I want to point out for you that the number of patients annually who could benefit from Optiflow during anesthesia is similar to the number of patients who could benefit from Optiflow for respiratory support. That's about another 50 million patients each year. We have a long way to go yet. These new anesthesia products, together with Airvo 3 and Evora full face mask for OSA, are examples of our focus on the future and our determination to keep innovating for patients. New products like the ones featured in the video don't just happen. We believe it's essential that we continue to grow our investment in R&D.
This year, that includes funding clinical trials for our home respiratory support products and advancing the development of new surgical technologies. In addition to R&D, we are continuing to invest in growing our sales teams to support the significant hospital hardware already in the market, as well as our expanded product offering in anesthesia. Over the last three years, we've already expanded our direct sales and distribution presence from 39 countries to 53 countries. Last year, our Optiflow therapy was used to treat approximately 7 million patients out of a potential 50 million respiratory and 50 million anesthesia patients who could benefit each year. Our business is built on changing clinical practice, but never before in our history have we changed clinical practice with such a significant advantage. Today, our customers already have our hardware. They already have experience using it.
Now they have access to clinical data and clinical practice guidelines independent from COVID-19 that have grown exponentially. Because of this, we are confident that we can continue to build on our 50-year track record in changing clinical practice. Now, before closing, I would like to remind you that I'm standing for reelection as a director of your board at this meeting. I have been with Fisher & Paykel for 39 years now, the last six years as your managing director and CEO.
I believe that my experience and knowledge of the company and our industry will continue to bring value to the board. I am as enthusiastic and committed as ever to our company strategy, our aspirations, and to delivering results for shareholders. With your support, I look forward to continuing to deliver on this commitment as managing director. Now, with that, I would like to thank our customers, our suppliers, and our clinical partners who are also critical to our success. As always, I'm grateful to you, our shareholders, for supporting our purpose, our values, and our team. We are all looking forward to everything that is ahead, and we're glad that you're on board with us. Thank you. Back to you, Scott.
The third item on the agenda is to receive and consider the financial statements and auditor's report as contained in the company's annual report for the year ended 31 March 2022. This is the opportunity for shareholders to ask any questions specifically on the financial statements, the auditor's report, or the company's 2022 annual report. We have Karen Blaikie , Chair of PwC New Zealand, with us here in the room who can answer any questions you may have. Please note that there will be an opportunity for general questions once all items on the agenda have been considered. Are there any questions from shareholders on the phone?
Derek, currently no questions on the phone.
Are there any questions from shareholders online?
We have a question from Deborah Williams, but it relates to general business. There are no questions specifically relating to the financial statements.
Okay. We'll deal with that question later in the meeting. As there are no questions, I will move on to the next item on the agenda. The fourth item on the agenda is the consideration of the formal resolutions. There are 11 resolutions, and each resolution is an ordinary resolution. This means they are required to be passed by a simple majority, more than 50% of the votes of shareholders who are entitled to vote on the resolution and do vote. Shareholders will be asked to vote on each resolution after the resolution has been proposed and discussed. Voting on the resolutions will proceed using the online meeting platform. To vote, you will need to click Get a Voting Card at the top of your webpage or below the video. You will be asked to enter your shareholder number or proxy number to validate.
You can then select how you wish to vote by clicking For, Against, or Abstain in respect of each resolution. Remember to click Submit Vote on the bottom of the card once you have selected all of your votes. Further information is available in the Link Market Services Virtual Annual Meeting online portal guide, and you can call the helpline on 0800 200 220 for assistance. Following voting on the resolutions, we will be happy to take any general questions you may have in regard to our company and operations. You can submit general questions at any time during the meeting by using the online question function. If you've called in on the phone, you can inform our operator you would like to ask a question.
The registrar, Link Market Services, will complete the counting of all votes and complete their duties as scrutineer for the purposes of the poll. We will make an announcement of the results of the voting to the NZX and ASX once this process has been completed. We now move to consideration of the individual resolutions. Explanatory note one of the notice of meeting explains the requirement that one-third of the company's directors must retire by rotation at the annual shareholders meeting in accordance with the company's constitution. The first motion relates to the reappointment of Lewis Gradon as a director. Lewis has already spoken in support of this earlier. I have pleasure in moving as an ordinary resolution that Lewis Gradon be elected as a director of the company. Are there any questions from shareholders on the phone?
There are currently no questions on the phones.
Are there any questions from shareholders online?
There are no questions online.
There appears to be no discussion. Could you please now record your vote on this resolution? Thank you. The second resolution is on the reelection of Neville Mitchell as a director. Neville has already addressed this earlier in the meeting. I have pleasure in moving as an ordinary resolution that Neville Mitchell be reelected as a director of the company. Are there any questions from shareholders on the phone?
There are no questions on the phone.
Are there any questions from shareholders online?
There are no questions.
There appears to be no further discussion, so could you please now record your vote on this resolution? Thank you. The third resolution is on the reelection of Donal O'Dwyer as a director. Donal has already spoken on this earlier in the meeting. I have pleasure in moving as an ordinary resolution that Donal O'Dwyer be reelected as a director of the company. Are there any questions from shareholders on the phone?
There are currently no questions for this slide on the phone.
Are there any questions from shareholders online?
No, there are no questions online.
There appears to be no further discussion. Could you please now record your vote on this resolution? Thank you. Explanatory note two of the notice of meeting explains the requirement that a director appointed by the board must not hold office without election past the next annual meeting following the director's appointment. To that end, our fourth resolution is on the election of Lisa McIntyre to the board. I'd like to invite Lisa to the lectern to speak on this.
Good afternoon, everyone. I am pleased to be standing for election to the Fisher & Paykel Healthcare board at this year's ASM. Fisher & Paykel Healthcare is an outstanding New Zealand company. It delivers world-class products in a global market, and the importance of its role serving patients and clinicians has been particularly evident in the last few years during the unprecedented challenges posed by COVID-19. I consider it a great privilege and a great responsibility to serve on this board, and indeed, I consider it a great pleasure. I have past experience as an advisor to the biomedical and healthcare industries in the U.S., in Australia, as well as recent non-exec director experience with other successful medical technology and healthcare companies. I'm committed to continuing to support the board's high standards of corporate governance.
I'm committed to ensuring continuous innovation to benefit patients and clinicians, to underline that sustainable growth that others have referred to. I'm committed to working with my board colleagues to continue to deliver strong shareholder value. With your support, I put myself forward for election at this year's ASM. Thank you.
Thank you, Lisa. I now move as an ordinary resolution that Lisa McIntyre be elected as a director of the company. Are there any questions from shareholders on the phone?
There are currently no questions on the phone.
Are there any questions from shareholders online?
There are no questions online.
There appears to be no discussion. Could you please now record your vote on this resolution? Thank you. The fifth resolution is on the election of Cather Simpson. I'd now like to invite Cather to come and speak.
Tēnā koutou katoa. I'm pleased to be standing for election to the Fisher & Paykel Healthcare board. The first time I heard about Fisher & Paykel Healthcare was about 15 years ago, just after I arrived in New Zealand from the United States to take up a position in the Physics and Chemistry departments at the University of Auckland. I listened as Sir Paul Callaghan highlighted Fisher & Paykel Healthcare as the kind of high value-add technology company that drives New Zealand's economy and our quality of life forward. "We need more of these," he said. Since then, the company has gone from strength to strength, and the unremitting focus upon positive patient outcomes is something I admire greatly. I'm pleased that several of my students have gone on from their time in my laboratory, the Photon Factory, to join the Fisher & Paykel Healthcare team.
I believe my experience at the coalface of commercializing novel scientific research gives me an added perspective and a valuable perspective that I bring to the company to help drive the creative challenges facing it over the next 15 years. I'm particularly keen to help sustained growth through technology innovation. To serve Fisher & Paykel Healthcare as a director would be both an honor and a responsibility. I'm committed to contributing my diligence and whatever wisdom I possess to the board as it guides and tests the company's ambitious strategies for growth and better patient care. I will act with the highest integrity. I will align with the board's high standards of corporate governance, and I will bring a laser focus to supporting the Fisher & Paykel Healthcare team as they deliver value to all stakeholders.
I ask for your support, for my election to the Fisher & Paykel Healthcare board. Thank you.
Thank you, Cather. I now move as an ordinary resolution that Cather Simpson be elected as a director of the company. Are there any questions from shareholders on the phone? There are currently no questions on the phone. Are there any questions from shareholders online?
There are no questions online.
There appears to be no discussion, so could you please now record your vote on this resolution? Thank you. The sixth resolution is to authorize the directors to fix the fees and expenses of PwC as the company's auditor. Under the Companies Act, PwC is automatically reappointed as the auditor of the company. A reminder that we have Karen Bleakley , Chair of PwC New Zealand, with us here in the room, who can answer any questions you may have. Therefore, I now move as an ordinary resolution that the directors be authorized to fix the fees and expenses of PwC as the company's auditor. Are there any questions from shareholders on the phone? There are currently no questions on the phone. Are there any questions from shareholders online?
There are no questions online.
There appears to be no discussion, so could you please now record your vote on this resolution? Thank you. The seventh resolution is to approve the issue of performance share rights, or PSRs, to Lewis Gradon, Managing Director and Chief Executive Officer of the company. Approval is being sought to issue up to 100,000 PSRs to Lewis Gradon. The PSRs are issued in accordance with the 2022 Performance Share Rights Plan, and the key terms of that plan are summarized in explanatory note 4 in the notice of meeting. The board believes that the consistent issue of PSRs creates strong incentives for management to grow the value of the business at a rate greater than a peer group of multinational medical device companies, but effectively excludes the effects of movements in the New Zealand dollar.
Therefore, I now move as an ordinary resolution that approval be given for the issue of up to 100,000 Performance Share Rights under the Fisher & Paykel Healthcare 2022 Performance Share Rights Plan to Lewis Gradon, Managing Director and Chief Executive Officer of the company. Are there any questions from shareholders on the phone? There are no questions on the phone. Are there any questions from shareholders online?
There is a question from Duncan Miller-Johnson , and the question is, "In relation to the Performance Share Rights plan, does the Dow Jones U.S. Select Medical Equipment Total Return Index have little relevance to the company, Fisher & Paykel Healthcare? Will the recipients of the Performance Share Rights plan be incentivized by an index in which they have no interest?
I don't think I would describe it that way. One of the things that we are conscious of is that investors have choices, and they have the ability to invest in a broad range of companies right across the world. What we are trying to do is, in our segment, deliver performance that is better than the other companies in our segment. In that regard, we believe the alignment with our owners is correct.
There are no further questions online on this resolution.
There appears to be no discussion, so could I please ask you now to record your vote on this resolution? Thank you. The eighth resolution is to approve the issue of options to Lewis Gradon, Managing Director and Chief Executive Officer of the company. The option plan operates alongside the company's performance share rights plan. The key terms are also summarized in explanatory note four in the notice of meeting. This year, approval is being sought to issue up to 190,000 options to Lewis Gradon. I therefore now move as an ordinary resolution that approval be given for the issue of up to 190,000 options under the Fisher & Paykel Healthcare 2022 share option plan to Lewis Gradon, Managing Director and Chief Executive Officer of the company. Are there any questions from shareholders on the phone?
There are currently no questions on the phone. Are there any questions from shareholders online?
There are no questions online.
There appears to be no discussion, so could you please now record your vote on this resolution? Thank you. The ninth resolution is to approve the employee stock purchase plan for our North American employees. The terms of this are summarized in the explanatory note 5 of the notice of meeting. This plan was last approved in 2012 and needs to be approved every 10 years in accordance with California securities regulations. The 2022 stock purchase plan remains the same as the plan approved in 2012, with only minor administrative updates required. I therefore now move as an ordinary resolution that the Fisher & Paykel Healthcare 2022 employee stock purchase plan be approved. Are there any questions from shareholders on the phone? There are currently no questions on the phone. Are there any questions from shareholders online?
There are no questions online.
There appears to be no discussion, so could you please now record your vote on this resolution? Thank you. The tenth resolution is to approve the 2022 performance share rights plan for North America. You can find details on this in explanatory note six in the notice of meeting. The key terms of the North America PSR plan are materially the same as the previously discussed PSR plan, with the exception of the application of the U.S. Securities Act to any shares issued or transferred. I therefore move as an ordinary resolution that the Fisher & Paykel Healthcare 2022 performance share rights plan for North America be approved. Are there any questions from shareholders on the phone? There are currently no questions on the phone. Are there any questions from shareholders online?
There are no questions online.
There appears to be no discussion, so could you please now record your vote on this resolution? Thank you. The eleventh and final resolution for today is to approve the 2022 share option plan for North America. You can find details on this in explanatory note six in the notice of meeting. Similar to the PSRs, the terms are materially the same as the earlier options plan discussed with an added layer for the U.S. Securities Act compliance. I therefore now move as an ordinary resolution that the Fisher & Paykel Healthcare 2022 share option plan for North America be approved. Are there any questions from shareholders on the phone? There are currently no questions on the phone. Are there any questions from shareholders online?
There are no questions online.
There appears to be no discussion, so could you please now record your vote on this resolution? Thank you. That concludes the voting on resolutions today. Thank you for your participation. Please ensure you have now submitted your electronic voting card. The votes will now be counted by Link Market Services. The results of the voting will be announced to the NZX and ASX as soon as they are available. I would now like to give shareholders an opportunity to ask any questions concerning any matters relating to the company. We will pause momentarily to account for the broadcast today.
The first question we have online is from Robert Keane, and it was asked in regard to the financial statements, but was submitted after the time. The question is: As at 31 March 2022, inventories of finished goods increased by $72 million compared to FY 2021. Given operating revenue has declined in the last financial year, is there a need to reduce the level of finished goods being held?
Yes. Look, there's a number of issues at play here, including being prepared for future surges in addition to dealing with the supply chain challenges that the world had been facing and indeed is still facing. That said, we are reducing our inventory somewhat, but Lewis, I'll just pass to you to add a little bit more color.
No, I think that's really, that's quite accurate, Scott. You know, we have been dealing with massive fluctuations in volume, and we kind of said from the beginning that if we're going to err in inventory while COVID is still active in the community, we'll probably err on the over side with inventory, and that's pretty much what's happened. We're probably, you know, as we hopefully come out of the acute phase of the pandemic, we are probably entering a phase where we will be moving our own inventory levels down over the rest of the year.
The next question comes from Bruce Parks, and the question is: Is a proposed second New Zealand campus likely to be established outside of the Auckland region, and do you believe you can find sufficient skilled human resource to staff it?
Look, Bruce, I'm not going to comment on exactly where we might be looking. The question of talent is something that the board does focus on, and we are very, very conscious of. Clearly, it's a tight-ish employment and talent market at the moment, but we are confident that this company can attract the sort of talent that it will need in future years.
The next question comes from Deborah Williams, and her question is: My question is about the share price. Why has the share price fallen so steadily from highs of over $ 35 down to the present $ 20.10?
I'm going to be relatively careful about how I answer this in the context of not wanting to provide advice. Markets have been very, very uncertain over the last six or eight months. I think the secondary feature is that clearly our revenue profile has been somewhat uncertain. You know, we are a company that prefers to give earnings guidance, but for the last couple of years, we have been unable to because of the intra-month, intra-market volatility that we are seeing in our sales profile, and that is continuing to play out.
The next question comes from Stephen Ridgewell. The question is, what level of investment was made to enable increased production output during the pandemic? Will there be write-offs, losses, or underutilization of manufacturing assets as a result of any tapering post-pandemic production volumes? Given the increased exposure of healthcare providers and workforce to F&P Healthcare products during the ongoing pandemic, has the board considered substantially increasing sales resource to maximize and make durable market share gains? What specific initiatives are planned?
Okay, quite a bit going on there in that question. Firstly, over the last two or three years, our CapEx and investment profile has lifted, specifically in the equipment space. I'll be corrected by someone in the room if I'm wrong, but I think we have invested something along the order of a couple of hundred million dollars in equipment. There is no prospect that I am aware of of us writing off any of that equipment. It is all of relatively long life. In terms of supporting our capacity to drive sales, we are actively employing people in all of the markets that we operate in to continue to drive sales.
We are actively employing at the moment.
The next question comes from Tainui Superfund . The question is, the addressable market figures quoted for FPH products seem very promising. How many of the potential patients can afford these products?
Well, Lewis, do you want to?
Yeah.
Oh.
Thanks, Scott. I think if you're referring to the total addressable market, that is the total addressable market of patients that can afford it, that kind of therapy in countries and economies that can afford it. When we worked out our total addressable market, we applied discount for economies where maybe it's more expensive and more costly for that economy. We've taken account of that in our total addressable market estimate.
There are currently no further questions online. I just want to check whether there are any questions on the phone.
There are currently no questions on the phone.
Okay. That appears to be all for today. That concludes the formalities, everyone. Again, we appreciate your participation in this virtual-only format, and we thank you for your understanding and flexibility in our change of arrangements. We're very much looking forward to being able to do this in person again in the future. Thank you for your continued support of the company. I speak on behalf of the board when I say that we value your support. It is greatly appreciated. Enjoy the rest of your day.