Can Q1's front-loaded profit performance be repeated in FY2027-H1?

Net sales were ¥30,445 million and operating income was ¥8,909 million for the fiscal year ended March 2026. The company’s full-year plan for the fiscal year ending March 2027 calls for net sales of ¥42,000 million, operating income of ¥15,900 million and net income attributable to owners of the parent of ¥9,500 million, representing year-on-year increases of 37.9%, 78.5% and 62.0%, respectively. Based simply on net sales and operating income, the operating margin is projected to rise to 37.9% for the fiscal year ending March 2027 from 29.3% for the fiscal year ended March 2026. Achieving the plan will therefore require not only higher revenue but also improved margins.

For the first quarter of the fiscal year ending March 2027, net sales were ¥17,143 million, operating income was ¥8,868 million, ordinary income was ¥8,494 million and net income was ¥5,822 million. Progress against the full-year plan was 40.8%, 55.8%, 59.8% and 61.3%, respectively. Operating income in particular reached an amount equivalent to 99.5% of the ¥8,909 million recorded for the full fiscal year ended March 2026 in just 3 months. It will therefore be important to determine whether profit recognition was uneven because of condominium handover timing or the property mix.

Using 50% of the full-year plan as a mechanical first-half benchmark gives net sales of ¥21,000 million, operating income of ¥7,950 million, ordinary income of ¥7,100 million and net income of ¥4,750 million. As of Q1, all 3 profit measures had already exceeded these levels, while net sales still required an additional ¥3,857 million. This does not mean that the company has provided a first-half forecast. At the next results announcement, Q2 standalone net sales, the number of units handed over and the timing of revenue recognition by property will need to be examined to determine whether Q1’s high profit was simply brought forward.

The Q1 results attributed the increase in profit to improving personal consumption and employment income conditions, solid demand for newly built condominium sales, selective acquisition of profitable development sites and increased supply of high-quality properties. However, the increase in profit by factor, gross profit by property and profit contribution by property handed over have not been disclosed. At the next results announcement, we will check whether the full-year forecast is maintained or revised, whether first-half cumulative net sales exceed ¥21,000 million and whether the operating margin can remain near the 37.9% level in the full-year plan.