Validate the upward revision to first-half ordinary profit against actual results and confirm the assumptions behind leaving the full-year forecast unchanged

First-quarter revenue was ¥2.67 billion, operating loss was ¥125 million, ordinary loss was ¥124 million, and net loss attributable to owners of the parent was ¥80 million. Revenue increased 21.1% year on year, and progress against the full-year revenue forecast of ¥10 billion was 26.7%, slightly above the 25% quarterly benchmark. However, all profit levels remained in the red, so the first quarter's revenue growth alone is insufficient to assess whether the full-year forecasts of ¥70 million in operating profit, ¥200 million in ordinary profit, and ¥150 million in net profit will be achieved.

In the revision announced on 5 November, the first-half ordinary profit/loss forecast was raised from breakeven to a profit of ¥110 million, while the first-half net profit forecast was set at ¥80 million. The full-year ordinary profit forecast of ¥200 million was left unchanged. This combination implies that, even if profit is secured in the first half, an additional ¥90 million of ordinary profit is assumed for the second half to meet the full-year target. This may indicate that the company has not simply carried the first-half improvement into its full-year forecast and that uncertainty remains around second-half demand, costs, and business-structure reform. The breakdown of the second-half plan itself has not been disclosed.

At the next results announcement, the first priority will be to confirm whether first-half ordinary profit of ¥110 million and net profit of ¥80 million were achieved. It will also be necessary to assess the extent to which operating profit improved from the ¥125 million first-quarter loss and how far the uniform business's earnings growth flowed through to company-wide results. Even if ordinary profit turns positive while operating results remain in the red, that would be insufficient to validate the new medium-term management plan's objective of returning the core business to profitability.

It will also be important to see whether, when the first-half results are disclosed, the company can explain why the full-year ordinary profit forecast of ¥200 million remains unchanged, the sources of the ¥90 million of profit required in the second half, and the probability of achieving revenue of ¥10 billion and operating profit of ¥70 million. As of the first quarter, order intake, order backlog, cash flow, business KPIs, and bridges quantifying the factors behind changes had not been disclosed. Accordingly, in the first half we will track whether the company can provide specific details on delivery timing for uniform orders, price pass-through in the health and lifestyle business, and the extent of loss reduction in loss-making businesses.