Can the Q1 shortfall be recovered in H1?

In Q1 of the fiscal year ending March 2027, revenue was ¥7,549 million, operating profit was ¥1,132 million, ordinary profit was ¥1,144 million, and net income attributable to owners of the parent was ¥968 million. Year on year, revenue fell 7.3%, operating profit 22.2%, ordinary profit 16.2% and net income 12.4%, with all major profit measures declining. Revenue and operating profit were down from ¥8,148 million and ¥1,455 million, respectively, in Q1 of the previous fiscal year, and margins also declined.

The full-year forecasts are revenue of ¥39,400 million, operating profit of ¥7,100 million, ordinary profit of ¥6,900 million and net income of ¥4,620 million, and the company had not changed its forecasts as of Q1. Progress based on Q1 results was 19.2% for revenue, 15.9% for operating profit, 16.6% for ordinary profit and 20.9% for net income. Assuming a simple 25% contribution in each quarter, revenue was ¥2,301 million and operating profit ¥643 million below that benchmark, requiring a recovery over the remaining quarters.

The particularly slow progress in operating profit relative to revenue warrants attention. To meet the full-year forecasts, the three quarters after Q1 must generate ¥31,851 million in revenue and ¥5,968 million in operating profit. This equates to quarterly averages of ¥10,617 million in revenue and ¥1,989 million in operating profit, approximately 40.6% and 75.7%, respectively, above the Q1 results. Although seasonality and the timing of project recognition have an impact, FY2027-H1 should show whether this dependence on the second half is narrowing.

Q1 also reflects the impact of changes to the business portfolio, including the withdrawal from newspaper printing at the end of the previous fiscal year, the loss of revenue from the recruitment media business, and the loss of earnings from a large real-estate project. Accordingly, it is necessary to distinguish recovery in revenue from existing businesses and improvement in margins, rather than relying solely on year-on-year comparisons. At the next earnings announcement, key points to check will include whether the full-year forecasts are revised, the cumulative H1 progress rates, the specific path to achieving the revenue and operating profit required in the second half, and whether project recognition has shifted between periods.