FY2027-Q1 is well ahead of plan, but the key focus is whether this can be sustained through H1

FY2027-Q1 revenue was ¥8.43 billion, operating profit was ¥617 million, ordinary profit was ¥577 million, and net income attributable to owners of the parent was ¥373 million. The full-year forecast announced in August was ¥29.46 billion in revenue, ¥1.50 billion in operating profit, ¥1.30 billion in ordinary profit, and ¥860 million in net income. Q1 alone accounted for 28.6% of the full-year revenue forecast and 41.1% of the operating profit forecast. The gap in progress, one-quarter for revenue versus two-fifths for operating profit, is an important starting point for assessing profit attainment at the H1 stage.

The lead in profit can be explained by the segment mix. In Q1, the real estate development business generated revenue of ¥6.541 billion and segment profit of ¥633 million, up 39.4% and 65.2%, respectively, year on year. The construction business, by contrast, generated revenue of ¥1.985 billion and profit of ¥125 million, representing declines in both revenue and profit. The real estate management business generated revenue of ¥270 million and profit of ¥52 million, with both increasing year on year. Accordingly, Q1 operating profit of ¥617 million did not result from uniform improvement across all businesses; the real estate development business made the largest contribution.

At the next results announcement, it will be important not to interpret Q1's strong progress as evidence that full-year targets are certain to be achieved. FY2026 full-year revenue was ¥31.352 billion and operating profit was ¥1.930 billion, whereas the FY2027 full-year forecast assumes declines to ¥29.46 billion in revenue and ¥1.50 billion in operating profit. The company attributes Q1's strong performance to rush demand ahead of price increases for condominiums and detached houses for sale. At the next results announcement, it will be necessary to check cumulative contracted and delivered units, sales after the price revisions, and the impact of delays in procuring construction materials on the timing of profit recognition.