Q1 delivered higher revenue and operating profit, but FY2027 H1 will test the achievability of the full-year plan for double-digit profit growth

For the first quarter of the fiscal year ending March 2027, consolidated revenue was ¥2.49996 billion, up 4.2% from ¥2.39971 billion in the same quarter of the previous year. Operating profit, however, was ¥638.69 million, up just 0.9% from ¥633.24 million, while ordinary profit was ¥669.68 million, up 1.2%. The operating margin declined by approximately 0.08 percentage points, from approximately 2.64% in the same quarter of the previous year to approximately 2.55%, indicating that revenue growth has not translated directly into operating profit growth.

The company's forecast for the fiscal year ending March 2027 is revenue of ¥10.26 billion, operating profit of ¥2.169 billion, ordinary profit of ¥2.254 billion and net income attributable to owners of the parent of ¥1.513 billion. These represent expected increases of 6.8%, 21.4%, 18.6% and 32.2%, respectively, from the previous fiscal year's results. As of Q1, progress stood at 24.4% for revenue, 29.4% for operating profit, 29.7% for ordinary profit and 28.2% for net income. Operating profit and net income were ahead of the simple 25% quarterly benchmark, while revenue was broadly in line with the plan. As the company stated at the Q1 stage that it had made no changes to its earnings forecasts, the focus will be on whether profits continue to run ahead in Q2 or whether reliance on the second half increases.

As a reference for seasonality, cumulative H1 results in the previous fiscal year were revenue of ¥4.7338 billion, operating profit of ¥100.5 million and net income attributable to owners of the parent of ¥71.5 million. Progress against the previous fiscal year's full-year forecasts was approximately 49.4% for revenue, 52.1% for operating profit and 50.9% for net income attributable to owners of the parent. The company has therefore historically reached around half of its full-year profit plan by the end of H1. Accordingly, although the 50% benchmark is not an official interim target, it is a useful mechanical check against historical progress.

At the next results announcement, we will check not only whether revenue growth remains around Q1's 4.2% but also whether operating profit growth has begun to outpace revenue growth. If cumulative H1 operating profit falls below ¥1.0845 billion, the amount of profit required in the second half to achieve the ¥2.169 billion full-year forecast will become more demanding. The next results announcement is scheduled for 12 November 2026. We will also check whether the full-year forecast is revised and whether the company discloses its outlook for margins and its second-half assumptions by segment.