FY2027-Q1: Given seasonality, focus on margins and the timing of property sales rather than revenue growth

FY2026-Q1 revenue was ¥4,792 million, operating profit was ¥286 million, ordinary profit was ¥251 million and net profit attributable to owners of the parent was ¥175 million. Compared with revenue of ¥4,434 million and operating profit of ¥127 million in the same period of the previous year, revenue increased approximately 8.1% and operating profit approximately 125.2%, while the operating margin rose from approximately 2.9% to approximately 6.0%. In FY2027-Q1, the key issue will be whether this margin improvement can be replicated, rather than simply whether revenue increased.

The company's profit, however, fluctuates significantly by quarter. Consolidated ordinary profit in FY2024 was ¥807.551 million in Q1, ¥79.065 million in Q2, a loss of ¥59.521 million in Q3 and ¥1,391.173 million in Q4, with Q4 alone accounting for 62.7% of the full-year total. In FY2025, Q4 ordinary profit was ¥1,885.327 million, representing 79.1% of the full-year total, while in FY2026 Q4 ordinary profit was ¥1,793.465 million, representing 65.0%. Accordingly, a low Q1 profit relative to the full-year plan is not necessarily abnormal, and performance needs to be assessed against the previous year's Q1 after adjusting for seasonality.

FY2026 ordinary profit was ¥251.486 million in Q1, ¥172.113 million in Q2, ¥541.613 million in Q3 and ¥1,793.465 million in Q4. Q1 and Q2 combined accounted for only 15.4% of the full-year total, reflecting a structure in which profit builds from Q3 onward. In particular, leasing demand in the real estate management segment is concentrated during the March-April school enrollment season, while revenue in the human resources solutions segment is also weighted toward Q3 and Q4 because of new graduate recruiting activity. In FY2027-Q1, the focus should therefore be on year-on-year profitability and the certainty of second-half projects, rather than the percentage of full-year profit achieved.

At the next earnings release, a key issue will be whether the company provides separate disclosure for the two businesses' revenue and segment profit, in addition to consolidated revenue and operating profit, as well as the number of properties sold, sales value and gain on sales of real estate held for sale. For FY2026-H1, the company explained that stronger-than-expected demand for relocations and lower-than-expected costs such as utilities contributed to the results exceeding plan, but it did not disclose the profit contribution of each factor. In FY2027-Q1, we will assess whether the same improvement factors continue or whether the lower costs were a one-off.