Q1 revenue and operating profit broadly on track against full-year forecasts

Q1 of the fiscal year ending February 2027 covered the three months from 1 March to 31 May 2026, during which the company posted revenue of ¥2,502.096 million, operating profit of ¥168.568 million and ordinary profit of ¥171.425 million. The full-year forecasts are revenue of ¥10,000 million, operating profit of ¥650 million and ordinary profit of ¥670 million, putting Q1 progress at 25.0%, 25.9% and 25.6%, respectively. Revenue and operating profit were not materially behind a simple quarterly run rate.

The company said that both revenue and profit were broadly progressing as planned. However, quarterly profit attributable to owners of the parent was ¥101 million, representing only 24.0% progress against the full-year forecast of ¥420 million. Net profit progress was lower than operating profit progress of 25.9%, making it important to assess how long the post-consolidation cost burden, including acquisition costs and amortisation of goodwill associated with the acquisition of subsidiaries, will continue, including in the second half.

The mechanical FY2027-H1 reference points are revenue of ¥5,000 million, operating profit of ¥325 million, ordinary profit of ¥335 million and profit attributable to owners of the parent of ¥210 million, each representing half of the full-year forecast. However, the company has not disclosed standalone H1 earnings forecasts or the details of seasonality, so these are benchmarks for measuring progress rather than company targets. In particular, if cumulative revenue reaches 50% by the second quarter but operating profit and net profit fall short, it will be necessary to distinguish whether the decline in margins after the expansion of the scope of consolidation is temporary or structural.

In the next earnings release, the four stages of cumulative H1 profit will be compared with the full-year forecasts. If operating profit exceeds ¥325 million but net profit remains below ¥210 million, the focus will be on disclosure of the factors behind the gap. No revision to the full-year earnings forecasts has been made at this point. If FY2027-H1 deviates from revenue of ¥5,000 million and operating profit of ¥325 million, it will also be necessary to assess whether the company maintains or revises its full-year forecasts of ¥10,000 million and ¥650 million.