Can the first-quarter earnings lead be sustained in FY2027-H1?

Consolidated revenue in FY2027-Q1 was ¥17,905 million, up 13.9% year on year, operating profit was ¥1,012 million, up 21.5%, ordinary profit was ¥1,087 million, up 30.1%, and net profit attributable to owners of the parent was ¥526 million, up 75.7%. Progress against the full-year forecast was approximately 23.0% for revenue, 26.5% for operating profit, 28.3% for ordinary profit and 28.4% for net profit, with the profit measures running ahead of revenue.

Revenue in the comparable period, FY2026-H1, was ¥31,231 million, operating profit was ¥1,419 million and ordinary profit was ¥1,460 million, while the company recorded an interim net loss attributable to owners of the parent of ¥20 million due to impairment of JOB LINKS CORPORATION. In FY2027-H1, assuming there is no large impairment charge of the kind recorded in the previous year, it will be important to determine whether ordinary profit and net profit, as well as operating profit, build in line with recurring business earnings.

At the first-quarter earnings briefing, the factors behind operating profit exceeding plan by ¥207 million were identified as increased consumer-business sales of ¥159 million, increased corporate-business sales of ¥17 million, a ¥55 million variance in goodwill amortization and ¥15 million from timing differences in expenses and other factors. Promotional expenses were a negative factor of ¥49 million. Accordingly, in the second quarter it will be necessary to determine whether the reversal of timing differences in expenses, promotional expenses and higher personnel costs weigh on profit.

Based on a simple even allocation across the first half, indicative figures would be revenue of ¥39,003 million, operating profit of ¥1,910 million, ordinary profit of ¥1,920.5 million and net profit of ¥927.5 million. However, the company has not disclosed seasonality or the timing of revenue recognition by business, so these are not company forecasts. As the company did not prepare a cash flow statement for the first quarter and did not disclose operating cash flow, the ¥1,912 million of operating cash flow in FY2026-H1 will serve as a reference point for assessing earnings conversion into cash and changes in working capital.