In Q1, cost normalization, rather than revenue growth, drove the increase in profit; the focus is now on testing its repeatability in the first half.

Revenue in Q1 of the fiscal year ending March 2027 was ¥1,434 million, up just 0.4% year on year. Operating profit was ¥128 million, ordinary profit was ¥172 million, and net income attributable to owners of the parent was ¥104 million, representing year-on-year increases of 80.7%, 148.4%, and 186.8%, respectively. Given the large gap between revenue growth and profit growth, the key issue for the first half will be how long the improvement in the cost structure can continue, rather than revenue growth.

By segment, revenue in the Healthcare Solutions business fell 2.0% year on year to ¥1,006 million, while operating profit rose 38.1% to ¥180 million. The Home Care Services business recorded revenue of ¥428 million, up 6.4%, and operating profit of ¥108 million, up 15.2%. The increase in company-wide operating profit was supported by improved profitability in both segments, but the Healthcare Solutions business delivered higher profit on lower revenue, so it cannot yet be said to represent profit growth accompanied by revenue recovery.

The improvement in profit includes the effect of the one-off M&A and PMI-related costs associated with the acquisition of shares in セントワークス株式会社 in the year-earlier period no longer being incurred. Although the company explains the absence of these one-off costs as a factor behind the increase in profit, it has not disclosed the amount of those costs or the underlying increase in operating profit excluding their disappearance. Ordinary profit was also ¥172 million against operating profit of ¥128 million, leaving a ¥44 million difference whose breakdown into non-operating income and expenses will need to be reviewed in the next results to assess earnings quality.

In Q2, the focus will be not only on whether revenue exceeds the Q1 level of ¥1,434 million, but also on whether operating profit exceeds ¥128 million and the operating margin can remain around 9%. In particular, it will be important to see whether the profit levels of ¥180 million in the Healthcare Solutions business and ¥108 million in the Home Care Services business reflect continuing effects from store utilization, hiring, and structural reform, rather than merely the absence of one-off costs, and whether this is disclosed together with the segment-level cost breakdown.