Q1 delivered higher revenue and profit, but first-half progress toward the FY2027 plan needs to be assessed in light of seasonality

FY2027 Q1 revenue increased 15.2% year on year to ¥6,993 million, while operating profit rose 89.1% to ¥347 million, resulting in substantial growth in both revenue and profit. Ordinary profit was ¥408 million and quarterly net profit attributable to owners of the parent was ¥210 million, up 143.8% and 205.7% year on year, respectively, with profit growth outpacing revenue growth. The operating margin also improved by approximately 1.9 percentage points, from approximately 3.0% in the year-earlier quarter to approximately 5.0%.

The full-year plan calls for revenue of ¥32,000 million, operating profit of ¥2,350 million, ordinary profit of ¥2,300 million and net profit of ¥1,650 million. Q1 progress was 21.9%, 14.8%, 17.7% and 12.7%, respectively. Compared simply with the 25% elapsed portion of the fiscal year, it is difficult to say that either revenue or operating profit is ahead of schedule. In particular, operating profit of ¥1,175 million, equivalent to half of the full-year plan, needs to be generated in the first half, meaning that ¥828 million would be required in Q2 alone based on Q1 results.

As in previous years, the company has explained that results tend to be weighted toward Q2 and Q4, so it is too early to judge full-year performance against the plan based solely on Q1 progress. However, first-half revenue and operating profit in the previous fiscal year were ¥13,472 million and ¥954 million, respectively. At the next interim results, it will therefore be important to assess how close the company comes to the simple halfway benchmarks of ¥16,000 million in revenue and ¥1,175 million in operating profit while maintaining year-on-year growth in both revenue and profit.

At the next results announcement, it will be necessary to check whether revenue and operating profit for Q2 alone can be disclosed, whether strong growth in Business Security continues, and whether the Electromechanics margin recovers. Even if the full-year plan remains unchanged, if first-half operating profit falls materially short of half the full-year target, dependence on Q4 and the risk of missing the plan will need to be evaluated separately.