Revenue surged following the acquisition, but the Q1 operating margin fell to 5.4%.

FY2027-Q1 revenue was ¥1,902 million, up 101.5% from approximately ¥944 million in the same period of the previous year. Most of the increase is attributable to the addition of the property management business operated by Ideal, a subsidiary of Horizon 14 that was brought into the consolidated group on 30 September 2025. Operating profit, however, was ¥103 million, below approximately ¥184 million in the same period of the previous year, resulting in revenue growth and a profit decline at the same time.

The change in margins is more significant. The operating margin fell by approximately 14.0 percentage points, from approximately 19.5% in the same period of the previous year to approximately 5.4% in the current quarter. The earnings presentation materials cite lower revenue from existing services, investment in advertising and personnel costs for the recruitment business, and amortisation of goodwill associated with Ideal's consolidation as factors behind the decline in profit. SG&A expenses were ¥952 million, including increases of ¥192 million in other expenses and related items, ¥129 million in personnel expenses, and ¥22 million in advertising expenses.

The full-year forecasts are revenue of ¥7,500 million, operating profit of ¥332 million, ordinary profit of ¥294 million, and net income attributable to owners of the parent of ¥141 million. No revisions had been made as of Q1. Q1 progress was 25.4% for revenue and 31.2% for operating profit. Compared with the 25% portion of the fiscal year that had elapsed, operating profit was ahead of revenue. However, operating profit itself was down year on year, so it would be premature to conclude that profitability has improved based on progress rates alone.

For the next period, FY2027-H1, we use revenue of ¥3,750 million, operating profit of ¥166 million, and net income of ¥70.5 million as benchmarks representing simple 50% progress against the full-year forecasts. These are not planned figures adjusted for the seasonality indicated by the company, but they provide a benchmark for measuring the minimum pace for the first half, including the acquisition effect. If revenue alone advances in H1 while the operating margin remains around 5%, the low profitability of the property management business, delays in the recovery of existing businesses, and front-loaded expenses will pose risks to achieving the full-year forecasts.