It was important to make clear we are a growing business so we always have capacity for growth. We have a couple of years’ worth of growth in capacity, for instance available space in production facilities and production line capacity. So we were able to ramp up our output very quickly and keep up with demand and get our products out to patients very quickly.

During the lockdown we used Zoom to communicate with investors for the investor roadshow. We made it a really valuable experience by staging the Zoom meetings in our usability lab where we have all our equipment. We have an ICU set up there with our products as well as other hospital products. We hired a video team to help showcase our products and how they are used. Our investors found that really useful.

We tend to be a long-term investor. So we fully appreciate for most businesses, it was futile to give guidance given how quickly the environment was changing week to week. But we certainly appreciated companies providing us with scenarios or a framework to think about how the business would look under different circumstances.

Listed@ASX: Alex, what did your shareholders want to know  and what was challenging about meeting their needs?

Alex: We were in a very unusual circumstance because the pandemic accelerated our plans. We were planning to raise capital anyway and some debt during the second half of 2020 or possibly early 2021. The pandemic pulled this forward because we need to build new data centres and we need a lot of capital to do that. Very early in the pandemic, we launched the biggest-ever equity raising we’ve done. Shareholders wanted to know everything. They wanted comfort everything was business as usual and any negative impacts were well understood.

With respect to our growth plans, we need to buy a lot of heavy, industrial- grade equipment, such as high-end air conditioning units and back-up generators. 

Shareholders wanted to know who our suppliers were, what their supply chains looked like and their exposure to hot spots like Italy and China, over and above the usual questions about how we were going to spend our capital. They wanted to know whether we were able to build new data centres and get construction workers on-site, as well as practices we were undertaking to ensure construction workers didn’t become infection clusters. We were as forthcoming as we could be.

Listed@ASX: Was there any movement in the share register during the period?

Alex: Yes, there was. Although, it was difficult to know which investors came onto the register because of the capital raising or because we were catapulted from the ASX200 to the ASX100. That made us much more relevant to some investors, particularly in the US and Europe. All of a sudden, we were on their radar because we became a member of a number of global indices.

Listed@ASX: Lyndal, what were some of your challenges meeting investors’ expectations?

Lyndal: One of the biggest questions was our view of how COVID would play out. But we have no more insight than anybody else working in the health system around what it’s going to do. How the virus impacts our business is not a straight or clear correlation. It depends on precautions governments take and treatments clinicians use.

Optiflow, our nasal high flow therapy, is emerging as an effective form of first line respiratory support. But that doesn’t mean every clinician will use it for every patient. The significance of this for our business is still an unknown. We hope the virus has increased awareness of nasal high flow therapy, but we just don’t know. That’s what our sales and marketing teams will be exploring.

“One of the biggest questions was our view of how COVID would play out. But we have no more insight than anybody else working in the health system around what it’s going to do.”

Listed@ASX: What about you, Alex? Where are your opportunities and how did you communicate that to the market?

Alex: We’re a very long lead time industry. So, sales we make today may not have an impact for as much as 12 to 18 months or even longer. But many investors understand the tailwinds the pandemic could present to our business. If you look at share prices of the big global cloud providers, such as the likes of Amazon, Microsoft and Google, they’re all doing well.

These providers are partners of ours, and for them to continue supporting the growing cloud requirements of Australian businesses, they rely on services like ours. So it’s immediately clear to most investors our business would do very well. We didn’t need to explain to the market where our business growth would come from.

It was more a case of giving investors an indication of just how strong that was and at the same time, particularly with newer investors, ensuring they understood that although we’re seeing demand right now, it’s highly unlikely to affect next year’s revenue or earnings. In fact, the only number that’s going to affect next year’s result is capex. We need to invest a lot more.

Listed@ASX: Dion, from your perspective, what did best practice communication from companies look like through that period?

Dion: It was about companies communicating frequently and transparently. They couldn’t be overly prescriptive because so much was unknown. Some businesses were structural beneficiaries of pandemic- induced trends. So it was about calling that out and managing expectations about how quickly some of those things could play out.

Many investors overreact when you go through a crisis. There was panic in March and April like I’ve never seen before.

Evidence of that was the oil price going negative, which was beyond the realms of what could be considered normal. So it was about sifting through companies and assessing what was temporary disruption and which businesses would normalise and the opportunities that would emerge from that.

There were also businesses in the COVID period we believe were overrunning. By way of example, when you see retailers growing at 40 per cent a year that were previously growing at two per cent to three per cent, it reeks of not being sustainable. We were very conscious of that.

Listed@ASX: Lyndal, what were your shareholders most concerned about at the start of the pandemic and also more recently? Because things have changed dramatically.

Lyndal: At the start, the concern was whether we could keep up with demand, knowing we were the market leader, and whether we could produce enough hardware to treat patients. They wanted to know whether there could be a global issue of mortality because we couldn’t manufacture. The fact we were able to increase production for our hardware devices four or five times in a very short period helped reassure investors. We also spent time ensuring they understood  we were able to keep our people and our sites safe so we could continue making product. As an example, in Mexico where we have our manufacturing facility in Tijuana, more than 80 of our employees contracted COVID in the community but we have had zero transmission onsite with the safety  precautions we have in place. That gives us and our investors confidence we’ve done a good job protecting our sites.

Now, shareholders want to know about the long-term impact to our business. We have placed a lot of hardware, so we’re likely to see a dip in that area. But we still anticipate selling hardware and sales of consumables associated with that hardware will continue to rise. We’ll also be working very hard to ensure clinicians understand the benefits they’ve seen with COVID patients will apply to non-COVID patients.

How quickly the market thinks we’re going to realise some of the demand that’s expected is something we manage very carefully. But at the end of the day, analysts are entitled to their independent opinion. Some people will persist with the very frosty or a glass-half- full view, whichever they may take. There’s nothing you can do about that, but you try and make sure that the peloton is roughly in the right place.

The other thing we’ve done is regularly made the CEO accessible, because it’s important the market feels a sense of assurance directly hearing from him.

Listed@ASX: Lyndal, how are you approaching guidance now?

Lyndal: We thought long and hard about guidance, particularly because we have a March year-end. We debated whether we should give guidance at all because we can’t forecast or predict what COVID’s going to do. So we’ve done something quite different, which is build a set of assumptions and modelled  how that scenario is likely to affect our financial results. We combine this with a trading update for the current year to allow analysts and investors to build their own set of assumptions and estimates. That way, we feel confident and comfortable the market is fully informed. We have changed our set of assumptions as the situation has changed. 

Fundamentally, as an infrastructure company, we try to ride out things like this. But with the twenty twenty vision hindsight gives you, we might have raised less equity and looked to raise some of that capital through debt.

We’ve got close to a billion dollars of cash sitting on the balance sheet at the moment. Interest rates are below 0.5 per cent.

We have arguably more cash than we need for immediate deployment. But no- one knew in April which way the market would go. It was next to impossible to raise any debt with any sensible spread.

Listed@ASX: Lyndal, if you had your time again, what would you do differently?

Lyndal: Having virtual meetings in our usability lab, showing our products and explaining we don’t do ventilators, but being able to show investors what a ventilator is, was powerful. But we didn’t do that until our investor roadshow at the end of June and then for our annual shareholders’ meeting in August. Doing that earlier to clear up any confusion in the market, particularly in the early days when there was a lot of press around ventilators, would have been worthwhile.

Listed@ASX: Dion, what would you do differently?

Dion: Every crisis is unique and the global economy and markets are more connected than they’ve ever been. So diversification across regions, geographies and sectors has never been more important. We also recognise we need to run extreme stress tests for all the companies in which we invest. It’s one thing to have a central case, but it’s moments like this where you find big opportunities. Equally, companies blow up. What’s important is to stay calm while markets are panicking because invariably, that’s when the best opportunities present themselves.