Can the strong start to FY2027-Q1 translate into a recovery in FY2027-H1?

FY2027-Q1 revenue was ¥9,638 million, up 18.7% year on year. Operating profit was ¥687 million, ordinary profit was ¥967 million, and net income attributable to owners of the parent was ¥696 million, representing year-on-year increases of 182.3%, 182.0% and 166.2%, respectively. Operating profit was ¥243 million in the year-earlier period, making the recovery in profit beyond the pace of revenue growth the central feature of these results.

Against the full-year forecast, revenue had reached 25.7%, broadly in line with the proportion of the fiscal year elapsed. Operating profit, however, stood at only 18.1%, lagging revenue. Based on the full-year forecast, the company needs to generate ¥27,862 million in revenue and ¥3,113 million in operating profit over the remaining 3 quarters. Maintaining margins will therefore be important, in addition to the high year-on-year growth rate recorded in Q1.

The comparable period, FY2026-H1, recorded revenue of ¥17,012 million and operating profit of ¥653 million. FY2027-Q1 operating profit alone exceeded cumulative operating profit for the year-earlier first half by ¥34 million. Unless Q2 produces a substantial operating loss, first-half operating profit is therefore likely to exceed the year-earlier period. Based on Q1 revenue, however, Q2 revenue would need to be at least ¥7,374 million to exceed cumulative revenue for the year-earlier first half.

No cash flow statement was prepared for FY2027-Q1, and operating cash flow, investing cash flow, and cash and cash equivalents were not disclosed. In H1, it will therefore be necessary to examine not only profit growth but also changes in trade receivables and inventories, operating cash flow, and progress against the full-year forecast, to determine whether the increase in Q1 profit has consumed an excessive amount of working capital.