FY2027 is expected to deliver revenue growth but lower operating profit; Q1 will indicate how that earnings decline is unfolding.

In FY2026, revenue was ¥2,461.9 million, operating profit was ¥944 million, ordinary profit was ¥891 million, and net profit attributable to owners of the parent was ¥525 million. Operating profit increased 46.0% year on year. The operating margin on revenue also rose 0.9 percentage points, from 2.9% to 3.8%, meaning that profit growth outpaced revenue growth in the latest fiscal year.

By contrast, the company's FY2027 forecast calls for revenue of ¥2,534.5 million, an increase of only 2.9%, while operating profit is expected to fall 32.9% to ¥634 million, ordinary profit 41.3% to ¥523 million, and net profit 42.0% to ¥305 million. The forecast operating margin is approximately 2.5%, about 1.3 percentage points below the FY2026 result of 3.8%. In the next Q1, it will be necessary to determine whether this forecast decline in profit is attributable to temporary factors such as materials and labor costs, investment in care services, and amortization of goodwill, or to a deterioration in underlying earnings power.

Operating profit by segment in FY2026 was ¥1,109 million in Construction, ¥305 million in Real Estate, and ¥255 million in Care Services. Construction and Real Estate delivered higher profit, while Care Services posted lower profit due to ICT and productivity-enhancement investments. The company has not disclosed forecast figures explaining the full-year decline by segment. Accordingly, we should examine not only consolidated Q1 operating profit but also the profit amounts and margins of Construction, Real Estate, and Care Services to determine which business is already reflecting the FY2027 decline.

Construction project completions and handovers are seasonal and concentrated in Q3 and Q4, so Q1 revenue and operating profit cannot simply be annualized against the full-year forecast. However, the comparable figures are consolidated revenue of ¥634.2 million and operating profit of ¥345 million in the same period of the previous year. In the next earnings release, we will assess whether revenue exceeds the year-earlier level, the reasons if operating profit falls below ¥345 million, the basis for maintaining the full-year operating profit forecast of ¥634 million, and whether additional full-year outlooks by segment are disclosed.