But we’re not going to not take care of a patient if there’s excess demand with a CPAP and APAP to manage one component of the P&L versus taking care of the patients and thinking about the one, three, five-year strategic engagement with the patient, with the physician, with the provider, and doing the right thing for the industry. So that’s the sort of factors that have changed in the next 90 days. And I hope actually all this comes together and we continue to do both, right, drive the needs of the patient and be able to get accretion in our GM. And I’m very confident we’ll do that over the coming 3, 6, 9, 12 months.
Operator: Thank you. Next question is coming from David Low from J.P. Morgan. Your line is now live.
David Low: Thanks very much. Mick, could I get to comment a little on what you saw in the ex-U.S. market? Obviously last quarter we saw the big event sale ventilator sales into China. Just wondering if there’s any countries you’d call out or any items we should be aware of, please.
Mick Farrell: Yes, David, that’s a good point. We didn’t really see anything of material context in this quarter in terms of exacerbation of COVID that that led to hospital based or life support ventilator sales. And so we’re back to I would say some steady growth that we see in our neuromuscular disease, our COPD and other sort of respiratory insufficiency parts of our business for life support vents. On the non-invasive vents and adaptive server vents and bi-levels, we’re back to steady market growth and actually we saw strong double-digit growth as those post-COVID, we’re starting to see the clinics open up and patient flows start to come back. Rob, any thoughts on ventilators?
Rob Douglas: No. Not on ventilators, because I’m just going to comment on masks.
Mick Farrell: Yes.
Rob Douglas: So the masks in all these other markets were really strong and really it’s showing underlying strength of the market not affected by recall dynamics or anything like that. So really the whole patient diagnostic systems are working in order and everything’s going strongly.
Operator: Thank you. Next question is coming from Steve Wheen from Jarden. Your line is now line.
Steve Wheen: Yes. Thanks very much. I just wanted to ask Brett about the working capital position. Again, last quarter we were — you were thinking that you’d be able to make some inroads into those — into the inventory balances that you had such that we might see a bit of more of the release of cash, but obviously inventory stepped up again as has the receivables. Is that just building more to the demand that you see? Or could you just help put that into a bit more context as why it didn’t quite play out the way you thought?
Brett Sandercock: Yes. Hi, Steve. It’s Brett. The inventory actually came down a little bit sequentially, so that, that’s sort of tracking down how we’re expecting. We expect that inventory balance should decline over the course of FY024 as well. The receivables you’re right was up a little bit, but that’s really driven by the revenues. I think overall in the working capital, we’re in pretty good shape. It was up a little bit this quarter. When you look at that, we — it’s really the timing around tax payments this quarter. So we paid higher tax this quarter than we would typically do each quarter. So that’s that drive, if you like, a little bit of negative working capital. But again, that’s just a timing element. So we’re expecting pretty robust cash flow generation through each of the quarters in FY2024.
And we’ll continue to work hard on the working capital and bringing that down. A big driver of that will obviously be the inventory and working that down progressively over the fiscal year.
