Will the strong first-quarter progress and profitability continue through H1 of FY2027?

In Q1 of the fiscal year ending March 2027, revenue was ¥8.131 billion, up 21.7% year on year, operating profit was ¥1.436 billion, up 38.2%, ordinary profit was ¥1.354 billion, up 37.0%, and net profit attributable to owners of the parent was ¥862 million, up 34.1%. The full-year forecasts are revenue of ¥28.5 billion and operating profit of ¥3.23 billion. Progress at the end of Q1 was 28.5% for revenue and 44.5% for operating profit, indicating that profit is ahead of revenue.

Using half of the full-year forecasts as a simple H1 benchmark, revenue would be ¥14.25 billion and operating profit ¥1.615 billion. This is not the company's H1 forecast, but a mechanical benchmark equivalent to 50% of the full-year plan. At the end of Q1, ¥7.169 billion of the revenue forecast and ¥1.793 billion of the operating profit forecast remained to be generated, making the extent to which this remaining amount is absorbed in H1 important for measuring reliance on the second half.

The Q1 operating margin, calculated from revenue and operating profit, was approximately 17.7%, above FY2026's full-year margin of 12.8%. The earnings presentation attributed this to sales prices finishing above plan, improved conversion rates and inventory turnover from strengthened inside sales, increased customer acquisition through the company's owned media, and lower advertising and indirect costs as the proportion of direct sales rose. However, the company has not disclosed the gross margin, the amount of profit improvement attributable to each factor, or detailed amounts for personnel and recruiting expenses, payment commissions, and advertising expenses.

In H1, it will be necessary to determine whether Q1's high margin was temporary, reflecting the project mix of large properties, or reproducible, reflecting improvements in sales prices and the direct-sales ratio. Particular attention should be paid to the breakdown of revenue and gross profit between ordinary residential-land sales and income-producing real estate sales, whether sales were brought forward, and the sales amount required in the second half. Even if the full-year forecasts are maintained, the key issue will be whether additional explanations are provided regarding second-half sales assumptions and margins based on H1 results.