After the reversal of special demand from the new banknotes, FY2027-H1 will test the full-year recovery plan

FY2026 revenue was ¥32.281 billion and operating profit was ¥8.795 billion, down significantly from FY2025 revenue of ¥42.250 billion and operating profit of ¥12.331 billion. The company attributed the decline mainly to the end of the special demand cycle after capital investment demand was generated by the issuance of new banknotes in the previous fiscal year. For FY2027, it forecasts revenue of ¥33.7 billion and operating profit of ¥8.950 billion, implying a modest recovery of 4.4% in revenue and 1.8% in operating profit.

FY2027-Q1 revenue was ¥6.794 billion, representing approximately 20.2% progress against the full-year forecast, while operating profit was ¥1.529 billion, or approximately 17.1%. Compared simply with the 25% corresponding to one quarter of the fiscal year, neither revenue nor operating profit was ahead of schedule, with profit progress particularly low. The company has not disclosed the quarterly allocation of its plan adjusted for seasonality, so 25% cannot be treated as a strict forecast benchmark. However, the next interim results will need to address cumulative progress against the full-year plan and the extent of recovery assumed for the second half.

By segment, the amusement-related business reported Q1 revenue of ¥4.897 billion and segment profit of ¥1.681 billion, down 26.6% and 32.2% year on year, respectively. The smart solutions-related business reported revenue of ¥1.188 billion and segment profit of ¥26 million, with revenue down 10.2% and profit down 66.4%. The hotel and restaurant-related business, meanwhile, reported revenue of ¥708 million, up 4.2%, but segment profit was only ¥6 million, down 75.6%. A company-wide recovery will require enough new projects to offset the decline in the core business, as well as a recovery in profit margins.

The Q1 disclosure explained the declines in revenue and profit qualitatively as being due to market conditions and the end of special demand, but did not provide a quantitative breakdown of the impact of that reversal, product-level sales volumes, orders, order backlog or project unit prices. No supplementary earnings materials or earnings briefing were provided. In FY2027-H1, the focus will be not only on whether the full-year forecasts are maintained, but also on whether H1 results are consistent with the assumptions for second-half recovery and how much recurring revenue outside the special demand cycle has accumulated.