Expansion of Public-Related Business

「The public consulting business and renewable energy facility development and operation, which had been included in the investment banking business, were consolidated into a newly established Public Support Services business.」

「In fiscal 2025 (April 2025 to March 2026), the number of contracting organisations for financial statement preparation support was 9 prefectures (9 in the previous fiscal year) and 14 ordinance-designated cities and special wards (13 in the previous fiscal year). In public facility management and public asset-related services, the number and revenue of engagements supporting the formulation and revision of administrative plans increased in response to growing demand for childcare support and health promotion.」

「The number of support engagements related to public facility management, revisions to comprehensive management plans for public facilities and other assets, community development plans, childcare and health promotion increased. To meet this demand, consultant headcount was increased, and initiatives were promoted to provide multiple services to the same local government alongside financial statement preparation support. Revenue from the public consulting business was ¥249 million, up 4.3% year on year, but segment results were a loss of ¥18 million, compared with profit of ¥12 million in the same period of the previous year, due to upfront investment in expanding headcount.」

「In fiscal 2024 (April 2024 to March 2025), the number of contracting organisations was 10 prefectures (9 in the previous fiscal year) and 13 ordinance-designated cities and special wards (13 in the previous fiscal year, including 1 organisation newly contracted from October to December 2023), maintaining a solid trend. Support for local governments was also expanded into areas such as childcare and health promotion by increasing consultant headcount, and initiatives were promoted to provide multiple services to the same local government.」

「In the public consulting business, demand from large local governments for financial statement preparation support has remained strong, driven by outsourcing needs and the expertise of the Group. The number of contracting organisations in ordinance-designated cities and special wards increased by 1 to 13. In addition, the number in prefectures is expected to increase by 1 to 10 from the third quarter.」

「In fiscal 2023 (April 2023 to March 2024), the number of financial statement preparation contracts increased by 1 year on year to 9 prefectures and by 2 to 13 ordinance-designated cities and special wards, maintaining a solid trend. In addition, contracts for consulting on the effective use of public facilities increased, mainly from large local governments undertaking advanced initiatives, in connection with support for reviewing comprehensive management plans for public facilities and other assets.」

「In fiscal 2023 (April 2023 to March 2024), the number of mandates for preparing financial statements for prefectures increased by 1 from the previous fiscal year to 9, while mandates for designated cities and special wards also increased by 1 to 12, continuing at a solid pace. Regarding revisions to comprehensive management plans for public facilities and other assets, the Ministry of Internal Affairs and Communications required local governments that had not completed their revisions to do so by the end of March 2024, so the Company actively promoted sales of related support services.」

「In fiscal 2023 (April 2023 to March 2024), the number of mandates for preparing financial statements for prefectures increased by 1 from the previous fiscal year to 9, while mandates for designated cities and special wards remained unchanged at 11, continuing at a solid pace. Revenue of the Public Consulting Business decreased 5.9% from the first three quarters of the previous fiscal year, when a partner's sale of public-sector accounting software following the end of support for software distributed by the government to local governments was recorded, to ¥248 million. Segment results were a loss of ¥41 million, compared with a loss of ¥1 million in the same period of the previous year, as expenses increased due to upfront investment to expand orders.」

「In fiscal 2022 (April 2022 to March 2023), the number of mandates for preparing financial statements for prefectures increased by 1 from the previous fiscal year to 8, while mandates for designated cities and special wards increased by 2 to 11, continuing at a solid pace. Revenue of the Public Consulting Business decreased 9.2% from the first quarter of the previous fiscal year, when a partner's sale of public-sector accounting software following the end of support for software distributed by the government to local governments was recorded, to ¥182 million. Segment results were a loss of ¥17 million, compared with profit of ¥12 million in the same period of the previous year, as expenses increased due to upfront investment to expand orders.」

「The Company continued sales activities for consulting on financial statement preparation focused on large local governments. In fiscal 2022 (April 2022 to March 2023), the number of mandates for preparing financial statements for prefectures remained at 7, unchanged from the previous fiscal year, while mandates for designated cities and special wards increased by 2 to 11, continuing at a solid pace. Regarding revisions to comprehensive management plans for public facilities and other assets, the Ministry of Internal Affairs and Communications required local governments that had not completed their revisions to do so by the end of March 2024, so the Company actively promoted sales of related support services.」

「As a result, development of new clients progressed, and the cumulative number of client organizations in fiscal 2021 increased by 27 from fiscal 2020 to 385. In fiscal 2022, which began in April 2022, the number increased by 9 to 394 as of the end of September.」

「As a result, development of new clients progressed, and the cumulative number of client organizations in fiscal 2021 increased by 27 from fiscal 2020 to 385. In fiscal 2022, which began in April 2022, the number increased by 3 to 388.」

「As a result of sales activities for consulting on financial statement preparation focused on large local governments since the previous fiscal year, the number of mandates from prefectures for financial statement preparation and fixed asset ledger maintenance in fiscal 2021 (April 2021 to March 2022) increased by 4 from fiscal 2020 (April 2020 to March 2021) to 7. In addition, following the Ministry of Internal Affairs and Communications' January 2021 request that local governments revise their comprehensive management plans for public facilities and other assets, the Company actively promoted sales of related support services. The number of mandates increased significantly, and demand inquiries continued.」

「As a result of sales activities for consulting on financial statement preparation focused on large local governments since the previous fiscal year, the number of mandates from prefectures for financial statement preparation and fixed asset ledger maintenance in fiscal 2021 (April 2021 to March 2022) increased by 4 from fiscal 2020 (April 2020 to March 2021) to 7. In addition, following the Ministry of Internal Affairs and Communications' January 2021 request that local governments revise their comprehensive management plans for public facilities and other assets, the Company actively promoted sales of related support services. The number of mandates increased significantly, and demand inquiries continued.」

「In January 2021 the Ministry of Internal Affairs and Communications required local governments to revise their comprehensive management plans for public facilities and other assets, based on individual facility plans and other measures, by March 2022. Accordingly, the Company also actively promoted sales activities for revision-support services.」

「Against this backdrop, in January 2021 the Ministry of Internal Affairs and Communications required local governments to revise their comprehensive management plans for public facilities and other assets, based on individual facility plans and other measures, by March 2022. Accordingly, the Company also actively promoted sales activities for revision-support services.」

「In the Public Consulting Business, the Public Accounting Business promoted sales activities focused on large local governments for mandates covering financial analysis reports, the introduction of public-enterprise accounting and management strategy formulation, in addition to consulting on the preparation of financial statements under uniform standards for local governments. The Public Consulting Business recorded revenue of ¥118 million, down 6.3% year on year, and a segment loss of ¥3 million, compared with a loss of ¥13 million in the same period of the previous year.」

「As a result, the Public Consulting Business recorded revenue of ¥253 million, down 62.3% from the previous fiscal year, and a segment loss of ¥15 million, compared with segment profit of ¥79 million in the previous fiscal year.」

「As a result, the Public Consulting Business recorded revenue of ¥170 million, down 71.3% year on year, and a segment loss of ¥25 million, compared with segment profit of ¥72 million in the same period of the previous year.」

「In the Public Consulting Business, the Public Accounting Business promoted sales activities for consulting on the preparation of financial statements under uniform standards for local governments, as well as mandates for financial analysis reports, the introduction of public-enterprise accounting and management strategy formulation. The Regional Revitalization Business promoted mandates concerning consideration of introducing PPP/PFI methods, whose market is expected to expand. On 1 July 2019, the Company transferred part of its shares in Geoplan-Namtech, which operates the urban infrastructure management systems business, making it an equity-method affiliate and excluding it from the scope of consolidation from the fourth quarter of the previous fiscal year. The Public Consulting Business recorded revenue of ¥126 million, down 71.6% year on year, and a segment loss of ¥13 million, compared with segment profit of ¥76 million in the same period of the previous year.」

「In the Public Consulting Business, the Public Accounting Business promoted sales activities for consulting on the preparation of financial statements under uniform standards for local governments, as well as mandates for financial analysis reports, the introduction of public-enterprise accounting and management strategy formulation. The Regional Revitalization Business promoted mandates concerning consideration of introducing PPP/PFI methods, whose market is expected to expand. The Public Consulting Business recorded revenue of ¥64 million, down 64.8% year on year, and a segment loss of ¥7 million, compared with segment profit of ¥10 million in the same period of the previous year.」

「In the Public Accounting Business, the Company promoted sales activities for consulting on the preparation of financial statements under uniform standards for local governments, as well as mandates for financial analysis reports and management strategy formulation for public enterprises. In the Regional Revitalization Business, it promoted mandates concerning consideration of introducing PPP/PFI methods, whose market is expected to expand. The urban infrastructure management systems business operated by Geoplan-Namtech, whose income statement has been consolidated since the third quarter of the previous fiscal year, steadily expanded as existing maintenance projects progressed smoothly and new projects were added. On 1 July 2019, the Company transferred part of its shares in Geoplan-Namtech, making it an equity-method affiliate with a 34% ownership interest. The Public Consulting Business recorded revenue of ¥593 million, up 101.4% year on year, and segment profit of ¥72 million, compared with a loss of ¥59 million in the same period of the previous year.」

「The Public Accounting Business advanced consideration of introducing PPP/PFI methods, whose market is expected to expand, alongside consulting on the preparation of financial statements under uniform standards for local governments. For existing clients, it also promoted sales activities for consulting mandates covering financial analysis reports and management strategy formulation for public enterprises, in addition to financial statement preparation. The Public Consulting Business recorded revenue of ¥445 million, up 146.0% year on year, and segment profit of ¥76 million, compared with a loss of ¥20 million in the same period of the previous year.」

「The Public Accounting Business advanced consideration of introducing PPP/PFI methods, whose market is expected to expand, alongside consulting on the preparation of financial statements under uniform standards for local governments. For existing clients, it also promoted sales activities for consulting mandates covering financial analysis reports and management strategy formulation for public enterprises, in addition to financial statement preparation. The urban infrastructure management systems business operated by Geoplan-Namtech Co., Ltd., whose income statement has been consolidated since the third quarter of the previous fiscal year, steadily expanded as existing maintenance projects progressed smoothly and new projects were added. The Public Consulting Business recorded revenue of ¥182 million, up 97.9% year on year, and segment profit of ¥10 million, compared with a loss of ¥6 million in the same period of the previous year.」

「The Company included Namtech Co., Ltd. and Geoplan-Namtech Co., Ltd. within the scope of consolidation, treating the end of the second quarter as the deemed acquisition date. On 15 May 2018, the two companies merged, with Namtech Co., Ltd. as the surviving company and Geoplan-Namtech Co., Ltd. as the absorbed company, and the surviving company adopted the trade name Geoplan-Namtech Co., Ltd.」

「The SW Business is a network asset management business that provides implementation consulting, customization, maintenance and operational support for GE's network-based asset management software, Smallworld™, for electricity, gas, water and telecommunications operators, targeting local governments and public-service providers. Acquired voting rights: 99.9%.」

「The Public Consulting Business saw an increase in consulting mandates for preparing financial statements under uniform standards, which all local public entities were required to complete by fiscal 2017. It also advanced the establishment of a framework for consulting mandates concerning the introduction of PPP/PFI methods, whose market is expected to expand, and the application of public-enterprise accounting. However, sales remained sluggish because the development of the sales structure after the M&A was delayed.」

「In this business, mandates for consulting on the preparation of financial statements under uniform standards, which all local public entities were required to complete by fiscal 2017, increased. The Company also consolidated the public consulting functions of itself and New Public Accounting Research Institute within PMC and established a framework for consulting mandates concerning the introduction of PPP/PFI methods, whose use is expected to expand, and the application of public-enterprise accounting to sewerage and other businesses.」

「In this business, mandates for consulting on the preparation of financial statements under uniform standards, which all local governments were required to prepare by fiscal 2017, increased. The Company also consolidated the public consulting functions of itself and New Public Accounting Research Institute within PMC and established a framework for consulting mandates concerning the introduction of PPP/PFI methods, whose use is expected to expand, and the application of public-enterprise accounting to sewerage and other businesses. The Public Consulting Business recorded revenue of ¥166 million and segment profit of ¥31 million.」

「The Group has identified expansion of the public-sector business as a medium- to long-term strategy. To advance this strategy further, on 30 November 2016 the Company subscribed to a third-party allotment of shares by Public Management Consulting Co., Ltd. (PMC), a group company providing public-sector accounting consulting services. On the same date, PMC used the proceeds from the capital increase to acquire all shares of New Public Accounting Research Institute Co., Ltd., which provides public-sector accounting consulting services. The Company made both companies consolidated subsidiaries. As local governments continue to face severe fiscal conditions, the government has in recent years introduced measures to improve local-government accounting and the systematic management of public facilities in order to strengthen fiscal management. The Group intends to capture expanding revenue opportunities by providing various services, including public-sector accounting consulting, and to address the renewal of infrastructure assets through asset securitization and other means.」

「Expansion of the public-sector business.」