FY2027-Q1 got off to a strong start with a substantial increase in profit, but the key question is whether the improvement will become established in the first half.

FY2027-Q1 revenue was ¥3,287 million, operating profit was ¥277 million, ordinary profit was ¥263 million, and net profit attributable to owners of the parent was ¥176 million. Year on year, revenue rose 27.1%, while operating profit increased 162.9%, ordinary profit 173.3%, and net profit 176.9%, with profit growth substantially outpacing revenue growth. The operating margin was approximately 8.4%, calculated by dividing ¥277 million by ¥3,287 million.

In the year-earlier period, revenue was ¥2,585 million and operating profit was ¥105 million, so revenue increased by ¥702 million and operating profit by ¥172 million over the year. The operating margin also improved by approximately 4.3 percentage points, from approximately 4.1% to approximately 8.4%. The company attributed the improvement in profit to the reversal of upfront costs incurred in the previous period for new store openings and new facilities, as well as contributions from existing home-visit pharmacy stores and the third and fourth Primary Care Home facilities.

The full-year forecasts are revenue of ¥13,102 million, operating profit of ¥904 million, ordinary profit of ¥843 million, and net profit of ¥631 million, with no revision as of Q1. Progress against the full-year forecasts based on Q1 results was 25.1% for revenue, 30.6% for operating profit, 31.2% for ordinary profit, and 27.9% for net profit. Although progress is ahead of a simple quarterly run rate, the comparison includes the effect of lower investment costs than in the previous period, making continued improvement through the first two quarters important.

In FY2027-H1, we will look not only for revenue growth, but also for the maintenance of an operating margin in the 8% range, the margin of the home-visit pharmacy business, ARPU for Kirari Prime, and occupancy rates and resident fees at Primary Care Home. The assessment of the first-half results will depend on whether the increase in operating profit reflects improved profitability at existing sites, rather than simply the lapse of temporary costs related to new store openings and facility launches, and whether the company maintains its full-year operating profit forecast of ¥904 million.