Front-loaded costs associated with opening new offices
First written in FY2017-Q3. 10 of 25 entries say "Mitigated", first in FY2019-Q1. Latest entry: FY2025.
GiG Works moved to the "Worse" side of this theme in 2021, 2 years before the typical company in this theme (2023).
The whole theme swung hardest in 2018: 5 of 11 companies on the "Worse" side.
6 other companies' latest entry also says "Materialised".
- FY2025MaterialisedAnnual report
「For assets used in the sharing economy business, the carrying amounts of assets at locations where an earlier-than-planned withdrawal was decided have been reduced to their recoverable amounts.」
An impairment loss of ¥20.309 million was recognised for a location where an early withdrawal was decided. The costs and profitability risks associated with new locations and facility operations materialised as an actual loss. - FY2024-Q2MitigatedAnnual report
「In addition, during the current period the company focused on profit-oriented operations, refraining from opening company-operated shared offices and prioritising higher utilisation at existing locations, which resulted in a substantial improvement in profitability.」
The company explained that profitability improved substantially by refraining from opening new company-operated stores and prioritising higher utilisation at existing stores. Its disclosures indicate a move to contain the risk of upfront costs associated with new openings. - FY2024-Q1SoftenedAnnual report
「Against this backdrop, during the current period the company is prioritising higher utilisation at existing locations and pursuing operations focused on profit growth, without opening company-operated shared offices.」
The company has deferred opening new company-operated stores and prioritised higher utilisation at existing stores, indicating a move to limit exposure to the risk of upfront costs associated with new openings. - FY2023MaterialisedAnnual report
「Profitability remained under pressure because of higher depreciation expenses associated with the expansion of openings in recent years and shortfalls against the plan for the multi-location shared office business, as well as impairment of unprofitable company-operated locations.」
The company disclosed that higher depreciation expenses and shortfalls against the plan continued as new locations expanded, and that impairment was recognised on unprofitable company-operated locations. - FY2022MitigatedAnnual report
「Although the number of contracts and profit remained below plan, partly because of the impact of the COVID-19 pandemic, including at THE HUB all access and some locations opened last year, the segment loss narrowed significantly year on year as a result of initiatives including rent reviews, cost reductions, increased advertising expenditure and improved member convenience through the development of app-based services.」
Although new locations and THE HUB all access continued to fall short of plan, losses associated with upfront costs narrowed substantially through rent revisions, cost reductions, advertising and the transition to an app. - FY2022-Q3MitigatedAnnual report
「At THE HUB all access and some locations opened in the previous year, the number of contracts has continued to fall below the initial plan. On the other hand, several shared offices underwent renovation and the 3 shared salons in Minami-Aoyama performed well, resulting in a profit for the current quarter, the first in 9 quarters.」
Although the number of contracts at some locations continued to fall below plan, renovation work and the 3 shared salons in Minami-Aoyama performed well, resulting in a profit for the current quarter, the first in 9 quarters. The cumulative segment loss also narrowed from ¥174 million in the same period of the previous year to ¥72 million. - FY2022-Q2WorsenedAnnual report
「During the first half of the current consolidated cumulative period, locations opened in the previous year performed slightly below the initial plan because of the spread of infectious disease, resulting in revenue growth falling somewhat short of plan. In all access, usage-based membership increased substantially, but the average price per use fell below plan, so revenue did not increase in proportion to the number of users and the loss was below the planned level.」
The performance of new locations was slightly below plan, while in THE HUB all access the average price per use fell short of plan, meaning revenue did not increase in proportion to the number of users and losses continued. - FY2022-Q1WorsenedAnnual report
「During the first quarter of the current consolidated cumulative period, locations opened in the previous year were still in the member-acquisition phase leading to break-even because of the spread of infectious disease and had not yet contributed to profit. In addition, although membership in the new service was increasing substantially, the high proportion of usage-based members meant that segment profit and loss remained negative.」
Locations opened in the previous year remained in the member-acquisition phase and had not yet contributed to profit, while the high proportion of usage-based members in the new service meant that the segment loss continued. - FY2021WorsenedAnnual report
「Going forward, we will continue to actively review the contractual terms of company-operated locations, promote advertising and promotional activities, rebuild brand value, and pursue business alliances with companies in other industries to achieve early monetisation. However, if losses continue for longer than anticipated, the group may incur impairment losses on operating locations and losses associated with withdrawals, which could affect its business performance.」
The company newly identified as a risk the possibility that continued upfront costs and losses caused by slower member acquisition and excess cancellations at new services such as Smart Office could lead to impairment losses on operating locations and withdrawal-related losses. - FY2021-Q3WorsenedAnnual report
「Segment profit and loss remained negative, affected mainly by the costs of opening company-operated locations for this new service, advertising and promotional expenses to acquire members, slower-than-expected growth in new members due to the state of emergency and other factors, and cancellations exceeding expectations.」
In addition to the costs of opening company-operated locations for the new service, advertising and promotional expenses, slower new-member acquisition due to the state of emergency and other factors, and higher-than-expected cancellations combined to prolong the segment loss. - FY2021-Q2RestatedAnnual report
「During the first half of the current consolidated cumulative period, segment profit and loss remained negative because of the impact of upfront costs from the increase in company-operated locations for this new service, although」
The company explained that upfront costs associated with the increase in company-operated Smart Office satellite locations and the segment loss continued. - FY2021-Q1WorsenedAnnual report
「During the first quarter of the current consolidated cumulative period, segment profit and loss was negative because of the impact of upfront costs from the increase in company-operated locations for this new service.」
Upfront costs from the increase in company-operated Smart Office satellite locations actually arose and became a factor behind the loss in the sharing economy business. - FY2020-Q3MitigatedAnnual report
「Despite incurring the opening costs for these 3 locations, results remained well above the previous year.」
The company explained that, although opening costs were incurred for multiple new locations, the sharing economy business continued to perform well above the previous year. - FY2020-Q2MitigatedAnnual report
「Revenue in the sharing economy business was ¥1,358 million, up 49.4% year on year, and segment profit was ¥97 million, compared with a ¥1 million loss in the same period of the previous year.」
The company disclosed that, in relation to the risk of upfront costs associated with opening new locations, the business had moved from a loss in the same period of the previous year to a ¥97 million profit. - FY2020-Q1MitigatedAnnual report
「As a result, revenue from the sharing economy business for the first quarter of the current consolidated fiscal year was ¥548 million, up 28.0% from the same period of the previous fiscal year, and segment profit was ¥32 million, compared with a segment loss of ¥15 million in the same period of the previous fiscal year.」
The company disclosed that, in relation to the risk of upfront costs associated with opening new locations, the sharing economy business had moved from a loss in the same period of the previous year to a ¥32 million profit. - FY2019MitigatedAnnual report
「The segment posted a profit of ¥43 million for the current consolidated fiscal year because the opening of new company-operated locations did not proceed as planned, the upfront-cost scenario anticipated in the initial plan did not occur, and utilisation at company-operated locations opened in the previous consolidated fiscal year increased steadily.」
Because new openings did not proceed as planned, the anticipated upfront costs did not arise, and higher utilisation at existing and recently opened locations also contributed to a full-year profit. - FY2019-Q3MitigatedAnnual report
「The segment posted a profit of ¥23 million for the current period because the upfront-cost scenario anticipated in the initial plan did not occur and utilisation at company-operated locations opened in the previous fiscal year increased steadily.」
The company explained that the anticipated upfront-cost scenario did not occur because new openings fell short of plan, and that the segment moved from a loss in the same period of the previous year to a profit. - FY2019-Q2MitigatedAnnual report
「Segment profit and loss was negative, partly due to the increase in company-operated locations, where costs are incurred upfront, although the average price per use and utilisation rate remained firm, and a return to profitability ahead of the initial plan is now in sight.」
Although upfront costs and losses from the increase in company-operated locations continued, the segment loss narrowed from ¥41 million in the same period of the previous year to ¥1 million, putting an earlier-than-planned return to profitability in sight. - FY2019-Q1MitigatedAnnual report
「Segment profit and loss was negative, partly due to the increase in company-operated locations, where costs are incurred upfront, although the average price per use and utilisation rate remained firm and in line with the initial plan.」
Although upfront costs and losses from the increase in company-operated locations continued, the coworking space business’s segment loss narrowed from ¥32 million in the same period of the previous year to ¥15 million. - FY2018WorsenedAnnual report
「During the current consolidated fiscal year, segment profit and loss was negative, partly due to the increase in company-operated locations, where costs are incurred upfront.」
The impact of upfront costs from the increase in company-operated locations continued through the full year, resulting in a ¥57 million segment loss in the coworking space business. - FY2018-Q3WorsenedAnnual report
「During the first nine months of the current consolidated cumulative period, segment profit and loss was negative, partly due to the increase in company-operated locations, where costs are incurred upfront, although the average price per use and utilisation rate have remained in line with the initial plan.」
Upfront costs continued as company-operated locations increased, resulting in a ¥74 million segment loss in the coworking space business. - FY2018-Q2WorsenedAnnual report
「During the first half of the current consolidated cumulative period, segment profit and loss was negative, partly due to the increase in company-operated locations, where costs are incurred upfront, although the average price per use and utilisation rate have remained in line with the initial plan.」
Upfront costs continued as company-operated locations increased, resulting in a ¥41 million segment loss in the coworking space business. - FY2018-Q1MaterialisedAnnual report
「During the first quarter of the current consolidated cumulative period, segment profit and loss was negative, partly due to the increase in company-operated locations, where costs are incurred upfront.」
The upfront costs associated with the increase in new company-operated locations materialised as a segment loss of ¥32 million. - FY2017RestatedAnnual report
「The company is proceeding with the opening of new offices to expand its business, and there are also cases where costs are incurred upfront, but」
The company continues to disclose the risk that costs may be incurred ahead of revenue in connection with opening new offices. - FY2017-Q3First statedAnnual report
「Costs may be incurred ahead of revenue in some cases.」
For the first time, identifies the possibility that costs may arise ahead of revenue while new offices are being opened as a business risk.