FY2027 plan: sales to double while operating profit declines slightly, with Q1 property deliveries the key

For the fiscal year ended June 2026, net sales fell 34.0% year on year to ¥5.522 billion, while operating profit rose 14.6% to ¥190 million. By contrast, the company’s plan for the fiscal year ending June 2027 calls for net sales of ¥12.0 billion, operating profit of ¥180 million, ordinary profit of ¥100 million and net income attributable to owners of the parent of ¥60 million. The plan implies a ¥6.478 billion, or 117.3%, increase in net sales from the previous fiscal year’s results, while operating profit is expected to decline by ¥10 million, or 5.3%. On a simple calculation, the operating margin is expected to fall from approximately 3.4% in FY2026 to approximately 1.5% under the FY2027 plan. As the plan appears to prioritise a recovery in sales scale while taking a conservative view of margins, it will be necessary to track the profitability of individual projects as well as sales.

The company records revenue from property sales when properties are delivered to customers and explains that quarterly results can be heavily skewed depending on construction completion and delivery schedules. During the fiscal year ended June 2026, it revised the amount of revenue recorded for certain large transactions and moved the sale timing of certain projects to the following fiscal year or later, based on sales conditions and profitability. FY2026-Q1 net sales were ¥393 million, while cumulative net sales through FY2026-Q3 were ¥4.710 billion, leaving full-year results at only ¥5.522 billion. In the fourth quarter of the fiscal year ended June 2026 alone, the company recorded net sales of ¥812 million and operating profit of ¥112 million, confirming a structure in which year-end deliveries boost profit.

In FY2027-Q1, it will be necessary to check the number of investment-oriented condominium buildings delivered, the number of XEBEC buildings sold, the number of development properties sold after adjustments for land and associated rights, and the number of battery-storage development projects sold. For the fiscal year ended June 2026, the company disclosed sales of 3 investment-oriented condominium buildings, 3 development properties and 1 battery-storage development project, but did not disclose the revenue contribution or sales timing by project under its plan for the fiscal year ending June 2027. Accordingly, even if revenue is recorded in Q1, it will be important to confirm not only the year-on-year change but also which projects have been delivered and the level of gross and operating margins.

In particular, if substantial revenue is not recorded from the first quarter, the achievement of the ¥12.0 billion full-year plan is more likely to be concentrated in the second half. Conversely, if multiple projects are delivered earlier than planned, sales progress will improve, but because the operating profit plan remains at ¥180 million, it will be necessary to determine whether margins are falling as a result of expanding low-margin projects. A key focus of the earnings release will be whether the company discloses project count, net sales, gross profit, operating profit and changes in inventories together.