1Q is ahead of the full-year operating profit plan, but the focus is on how much will accumulate in the first half

In 1Q of the fiscal year ending March 2027, consolidated revenue was ¥8,488 million, up 100.2% year on year, operating profit was ¥1,812 million, ordinary profit was ¥1,681 million, and net profit attributable to owners of the parent was ¥1,113 million. The full-year forecasts are revenue of ¥41,800 million, operating profit of ¥5,230 million, ordinary profit of ¥4,500 million, and net profit of ¥2,830 million, putting 1Q progress at 20.3% for revenue and 34.6% for operating profit. Profit progress is 14.3 percentage points ahead of revenue progress, indicating that profit is leading revenue at this stage.

If the first half is simply assumed to represent 50% of the full-year plan, the benchmarks for FY2027-H1 would be revenue of ¥20,900 million and operating profit of ¥2,615 million. These are not first-half targets provided by the company, but merely mechanical benchmarks based on allocating the full-year plan by period. While 1Q revenue was limited to roughly one-fifth of the full-year plan, operating profit exceeded one-third. The assessment will therefore depend on how much additional contribution comes from property sales and recurring revenue in 2Q.

In the interim period of the fiscal year ended March 2026, revenue was ¥8,095 million and operating profit was limited to ¥309 million. The company explained that the main reasons for the declines in revenue and profit were the concentration of sales of self-developed properties in the second half at L&P. In the cumulative 3Q results for the same fiscal year, revenue had risen to ¥17,573 million and operating profit to ¥2,436 million, demonstrating a business structure in which results fluctuate depending on the timing of property sales. As this 1Q may have moved in the opposite direction from the impact of delayed L&P sales in the previous year, it is necessary to determine whether the high 1Q progress rate will be repeated in the first half rather than immediately equating it with full-year earnings power.

At the next results announcement, it will be necessary to assess how closely revenue of ¥20,900 million and operating profit of ¥2,615 million approach the period-allocation benchmarks, as well as whether the company maintains its full-year forecasts. In particular, the amounts contributed to 1Q operating profit of ¥1,812 million by L&P property sales, recurring revenue from AI & Life Solutions, and cost controls have not been disclosed. It will be important to review first-half segment profit, the status of completed property sales, and the profit still required in the second half at the same time.