FY2027 profit growth plan focuses on gross margin and cost control rather than revenue growth

In FY2026, revenue was ¥21,983 million, operating income was ¥1,265 million, ordinary income was ¥1,303 million, and net income was ¥915 million. Year on year, revenue increased 1.2%, operating income 8.0%, ordinary income 9.1%, and net income 12.1%. The operating margin also improved by 0.4 percentage points, from 5.4% to 5.8%. Profit growth was supported not only by an increase in project volume, but also by a decline in projects requiring price adjustments and changes in project mix.

The company's FY2027 plan calls for revenue of ¥22,500 million, gross profit of ¥3,360 million, operating income of ¥1,373 million, ordinary income of ¥1,426 million, and net income of ¥950 million. Compared with FY2026 actual results, the increases are ¥516 million in revenue, approximately ¥77 million in gross profit, approximately ¥108 million in operating income, and approximately ¥35 million in net income. This implies revenue growth of 2.3% and operating income growth of 8.5%. The planned operating margin is approximately 6.1%, assuming a further 0.3 percentage-point improvement from FY2026's 5.8%.

The first-quarter comparison is based on FY2025-Q1 revenue of ¥4,678 million and operating income of ¥233 million, versus FY2026-Q1 revenue of ¥4,832 million and operating income of ¥228 million. Revenue increased by ¥154 million, while operating income declined by ¥5 million. This shows that, as of the first quarter, revenue growth did not necessarily translate directly into profit because of the impact of project mix and pricing-related projects. Accordingly, FY2027-Q1 should be assessed not only on revenue, but also on the operating margin and gross margin in comparison with the prior-year quarter.

At the next earnings announcement, it will be important to see whether the company provides numerical progress rates for revenue, gross profit, operating income, ordinary income, and net income against its full-year forecasts. Previous earnings presentation materials provided full-year actual results and forecasts, but offered only limited detail on quarterly SG&A expenses and project-level profitability. If operating income falls below FY2026-Q1's ¥228 million or the gross margin falls below 14.9%, key evaluation points will include whether the company can explain specifically the effects of delays in passing through price increases, an increase in low-margin projects, and SG&A factors such as special bonuses.