Strengthening construction capabilities and business foundation through the acquisition of 髙垣組 as a subsidiary

「In the custom-built housing business, net sales were ¥9,656 million, up 12.3% year on year, and segment profit (operating profit) was ¥459 million, down 14.1% year on year.」

「In the custom-built housing business, during the third quarter of the current consolidated fiscal year, we completed delivery of income-producing real estate projects including 「(tentative name) SUVLAND Funabashi Renovation Work」 and 「(tentative name) Mikawa Nissan Motor Co., Ltd. Okazaki Chuo Store New Construction Work」, ordered by 株式会社アーキッシュギャラリー, and 「Aichi Taiyo-no-Mori In-Home Care Support Center New Construction Work」, ordered by 髙垣組.」

「At 髙垣組, we completed delivery of the public works project 「Yahata Castle Keep Seismic Reinforcement Work」 ordered by Gujo City and the condominium project 「More Grace Kozoji Forest Fort New Construction Work」. As a result, net sales were ¥2,495 million, up 55.0% year on year, and segment profit (operating profit) was ¥72 million, down 6.3% year on year.」

「In this business, net sales increased significantly because the full-year results of 髙垣組, which became a consolidated subsidiary in November 2021, were included, orders for medium-sized properties increased, and it remained difficult to pass higher costs resulting from price increases for construction materials and housing equipment on to contract prices. Segment profit (operating profit), however, was at approximately the same level as in the previous consolidated fiscal year.」

「In this business, it remains difficult to pass higher costs resulting from price increases for construction materials and other items on to contract prices. However, because the results of 髙垣組, which became a consolidated subsidiary in November 2021, were included, net sales and segment profit (operating profit) significantly exceeded the same period of the previous year.」

「In the custom-built housing business, net sales significantly exceeded the same period of the previous year because the results of 髙垣組, which became a consolidated subsidiary in November 2021, were included. However, because it remained difficult to pass higher costs resulting from price increases for construction materials and other items on to contract prices, segment profit (operating profit) increased only marginally year on year.」

「In addition, profits from 髙垣組, which became a consolidated subsidiary at the end of the third quarter, contributed to segment profit and helped expand the custom-built housing business.」

「As we acquired the shares of 髙垣組 effective 30 November 2021, the company has been included in the scope of consolidation from the third quarter of the current consolidated fiscal year.」

「At a meeting of the Board of Directors held on 1 October 2021, we resolved to acquire all shares of 株式会社髙垣組 (hereinafter, 「髙垣組」) and make it a subsidiary, and entered into a share transfer agreement on the same date. 髙垣組 has numerous qualified personnel and engineers in construction and civil engineering and an extensive track record, primarily in the construction of public buildings, condominiums for sale, and commercial buildings. In particular, our subsidiary 株式会社エムジーホーム sells 7–8 condominium buildings annually, but securing a construction company capable of providing continuous and stable contracting services is necessary to address the future shortage and aging of construction engineers and rising construction costs, as well as to increase the number of condominiums sold and expand sales. We believe that 髙垣組’s participation in the Group will make a significant contribution in this regard. The business combination dates are 30 November 2021, the scheduled date of the share acquisition, and 31 December 2021, the deemed acquisition date. The voting rights ratio to be acquired is 100%.」