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Financial results presentation7120SHINKO Inc.Trading & Wholesale

Financial Results Presentation for the First Quarter of the Fiscal Year Ending March 2027

Revenue increased 19.3% year on year in Q1, driven by progress on projects including system renewal projects for government agencies. However, the operating loss widened from the year-earlier period as outsourcing costs for construction projects and employee training expenses increased.

Worth reading
73In focus
0–100. This measures how worthwhile something is to read, not how good or bad the company is.
Direction
Mixed performance
Direction inferred from the company’s description.
Scale
19.3
Year-on-year change in revenue (%)
Wording
Conditional
How definitive the wording is.

Contents of this document

Financial results presentationFirst quarter of the fiscal year ending March 202712 items taken from the company’s own explanation
Financial Results Figures (The key points of this material are explained below)
Net Sales¥4,153 million+19.3%
Operating profit¥-119 million
Ordinary income¥-117 million
Net income¥-121 million
Gross Profit Margin
Year-on-year change (points)-4
Results for the three months of the current quarter
Net Sales
¥4,153 million
Operating profit
¥-119 million
Ordinary income
¥-117 million
Quarterly net income
¥-121 million
Full-year earnings forecast
Net Sales
¥21,558 million
Operating profit
¥1,031 million
Ordinary income
¥1,030 million
Net income for the current fiscal year
¥682 million
What the company explained in this material
Self-assessment against the planThe company's self-assessment against its own plan.
Q1 progress was ahead of plan / in line with plan
Breakdown of Factors Affecting the ChangeReasons cited by the Company for the change in the figures.
Net Sales
FY2026 Q1 revenue
¥3,480 million
Maintenance Services Business
¥32 million
Solutions Business
¥622 million
Human Resources Services
¥17 million
First-quarter revenue for the fiscal year ending March 2027
¥4,153 million
Operating profit
FY2026 Q1 operating profit
¥-78 million
Revenue Growth
¥672 million
Human resources investment
¥214 million
Procurement
¥398 million
Costs other than purchases
¥19 million
Increase in SG&A expenses
¥81 million
FY2027 Q1 operating profit
¥-119 million
Assumptions Underlying the Business OutlookThe assumptions used by the company in preparing its forecast.
Annual net increaseApproximately 30 people annually
Employee turnover rate6.5
New initiatives
  • Acquired all shares of TAC Co., Ltd. and made it a subsidiary on 1 July 2026
  • Transition to consolidated financial reporting from Q2
  • Launch of a business supporting the introduction of a long-term care information platform and opening of a dedicated portal site
  • Begin dispatching new graduate employees from Q2
  • Increase staffing at existing dispatch client sites
Key KPIsA metric the company considers important as a management benchmark.
  • Number of new graduates hired74 people
  • Number of temporary staff264 people
    Year on year against the same period last year+4 people
  • Employee turnover rate6.5 %
  • Revenue CAGR (three-year medium-term management plan)12.9 %
  • Expected annual net increase30 People, approximately
Unit price and quantity metricsThese figures show sales broken down by price and volume.
Staffing ratePartially successful negotiations to increase dispatch fees (figure Not disclosed)
Number of temporary staff
264 people
Year on year against the same period last year+4 people
Segment results
Maintenance Services Business
Net Sales
¥1,307 million
Year-on-Year Change in Revenue (%)2.6
Segment profit
¥276 million
Profit year-on-year change_pct17.8
Solutions Business
Net Sales
¥2,278 million
Year-on-Year Change in Revenue (%)37.6
Segment profit
¥-59 million
Year-on-year change in profitPrevious fiscal year's operating profit: ¥5 million
Human Resources Services
Net Sales
¥567 million
Year-on-Year Change in Revenue (%)3.2
Segment profit
¥84 million
Profit year-on-year change_pct-3.1
Medium-term management plan targets
FY2024～FY2026
Revenue CAGR12.9
FY2026 operating margin4.8% (initial target: 5.2%)
Operating profitExceed ¥1 billion
Financial targets
Operating profit margin
TargetFY2026 4.8%
Initial target5.2%
Operating profit
TargetExceed ¥1 billion
Equity ratio
Actual results24.5 %
Number of employees
New graduate hiring
74 people
Dispatched personnel
264 people
Annual Dividend
Annual dividend per share
¥44
Payout ratio
30
Contents of this document
ItemDetails
Document typeFinancial results presentation
Fiscal Period CoveredFirst quarter of the fiscal year ending March 2027
Net Sales¥4,153 million (YoY +19.3%)
Operating profit¥-119 million
Ordinary income¥-117 million
Net income¥-121 million
Gross Profit MarginRate Not disclosed / Year-on-year change (points) -4
Results for the three months of the current quarterNet Sales ¥4,153 million / Operating profit ¥-119 million / Ordinary income ¥-117 million / Quarterly net income ¥-121 million
Full-year earnings forecastNet Sales ¥21,558 million / Operating profit ¥1,031 million / Ordinary income ¥1,030 million / Net income for the current fiscal year ¥682 million
Self-assessment against the planQ1 progress was ahead of plan / in line with plan
Segment resultsMaintenance Services Business Net Sales ¥1,307 million / Year-on-Year Change in Revenue (%) 2.6 / Segment profit ¥276 million / Profit year-on-year change_pct 17.8 / Solutions Business Net Sales ¥2,278 million / Year-on-Year Change in Revenue (%) 37.6 / Segment profit ¥-59 million / Year-on-year change in profit Previous fiscal year's operating profit: ¥5 million / Human Resources Services Net Sales ¥567 million / Year-on-Year Change in Revenue (%) 3.2 / Segment profit ¥84 million / Profit year-on-year change_pct -3.1
Breakdown of Factors Affecting the ChangeNet Sales FY2026 Q1 revenue ¥3,480 million / Maintenance Services Business ¥32 million / Solutions Business ¥622 million / Human Resources Services ¥17 million / First-quarter revenue for the fiscal year ending March 2027 ¥4,153 million / Operating profit FY2026 Q1 operating profit ¥-78 million / Revenue Growth ¥672 million / Human resources investment ¥214 million / Procurement ¥398 million / Costs other than purchases ¥19 million / Increase in SG&A expenses ¥81 million / FY2027 Q1 operating profit ¥-119 million
Key KPIsIndicator name Number of new graduates hired / Value 74 people / Year on year against the same period last year Not disclosed, Indicator name Number of temporary staff / Value 264 people / Year on year against the same period last year +4 people, Indicator name Employee turnover rate / Value 6.5 % / Year on year against the same period last year Not disclosed, Indicator name Revenue CAGR (three-year medium-term management plan) / Value 12.9 % / Year on year against the same period last year Not disclosed, Indicator name Expected annual net increase / Value 30 People, approximately / Year on year against the same period last year Not disclosed
Unit price and quantity metricsStaffing rate Partially successful negotiations to increase dispatch fees (figure Not disclosed) / Number of temporary staff 264 people
Number of employeesNew graduate hiring 74 people / Dispatched personnel 264 people / Change during the period Not disclosed
Assumptions Underlying the Business OutlookAnnual net increase Approximately 30 people annually / Employee turnover rate 6.5
Medium-term management plan targetsSubject FY2024～FY2026 / Revenue CAGR 12.9 / FY2026 operating margin 4.8% (initial target: 5.2%) / Operating profit Exceed ¥1 billion
Financial targetsOperating profit margin Target FY2026 4.8% / Initial target 5.2% / Operating profit Target Exceed ¥1 billion / Equity ratio Actual results 24.5 %
Annual DividendAnnual dividend per share ¥44 / Interim Dividend Not disclosed / Year-end dividend Not disclosed
Payout ratio30
New initiativesAcquired all shares of TAC Co., Ltd. and made it a subsidiary on 1 July 2026, Transition to consolidated financial reporting from Q2, Launch of a business supporting the introduction of a long-term care information platform and opening of a dedicated portal site, Begin dispatching new graduate employees from Q2, Increase staffing at existing dispatch client sites
Items this document does not state (10)
Operating profit marginSelling, general and administrative expensesProgress against full-year forecastNumber of stores and locationsRisk amount incorporated into the outlookAcquisition of treasury sharesCapital expendituresOrders received and order backlogMarket Size / ShareKey points of the Q&A

These are items the company does not state in this document. We do not leave them blank, nor fill them in from other sources or by inference.

The reasons the company gives

The company's own explanation, not something inferred from the numbers.

Revenue increased as network construction projects related to system renewals for government agencies and construction projects ordered in the previous fiscal year progressed during Q1. On the other hand, outsourcing costs and purchases associated with the increase in construction projects, training expenses and system usage fees associated with the increase in personnel, and personnel expenses resulting from regular pay raises and base-up increases all rose, putting downward pressure on operating profit.

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Financial Results Presentation for the First Quarter of the Fiscal Year Ending March 2027 | SHINKO Inc. (7120) timely disclosure | Komori