- Net Sales: ¥12.80B
- Operating Income: ¥1.18B
- Net Income: ¥731M
- EPS: ¥35.71
| Item | Current | Prior | YoY % |
|---|
| Net Sales | ¥12.80B | ¥12.97B | -1.3% |
| Cost of Sales | ¥9.80B | ¥9.94B | -1.4% |
| Gross Profit | ¥3.00B | ¥3.03B | -1.1% |
| SG&A Expenses | ¥1.82B | ¥1.71B | +6.1% |
| Operating Income | ¥1.18B | ¥1.32B | -10.5% |
| Non-operating Income | ¥12M | ¥19M | -36.2% |
| Non-operating Expenses | ¥2M | ¥320,000 | +526.9% |
| Ordinary Income | ¥1.19B | ¥1.34B | -11.1% |
| Profit Before Tax | ¥1.10B | ¥1.36B | -19.5% |
| Income Tax Expense | ¥365M | ¥447M | -18.3% |
| Net Income | ¥731M | ¥914M | -20.1% |
| Net Income Attributable to Owners | ¥684M | ¥860M | -20.5% |
| Total Comprehensive Income | ¥718M | ¥901M | -20.3% |
| Basic EPS | ¥35.71 | ¥43.83 | -18.5% |
| Item | Current End | Prior End | Change |
|---|
| Current Assets | ¥25.76B | ¥24.90B | +¥856M |
| Cash and Deposits | ¥18.63B | ¥17.43B | +¥1.21B |
| Accounts Receivable | ¥6.70B | ¥6.35B | +¥351M |
| Inventories | ¥6M | ¥2M |
| Item | Value |
|---|
| Net Profit Margin | 5.3% |
| Gross Profit Margin | 23.4% |
| Current Ratio | 348.5% |
| Quick Ratio | 348.5% |
| Debt-to-Equity Ratio | 0.26x |
| Effective Tax Rate | 33.3% |
| Item | YoY Change |
|---|
| Net Sales YoY Change | -1.3% |
| Operating Income YoY Change | -10.6% |
| Ordinary Income YoY Change | -11.1% |
| Profit Before Tax YoY Change | -19.5% |
| Net Income YoY Change | -20.1% |
| Net Income Attributable to Owners YoY Change | -20.4% |
| Total Comprehensive Income YoY Change | -20.3% |
| Item | Value |
|---|
| Shares Outstanding (incl. Treasury) | 20.06M shares |
| Treasury Stock | 877K shares |
| Average Shares Outstanding | 19.18M shares |
| Book Value Per Share | ¥1,784.45 |
| Segment | Revenue | Operating Income |
|---|
| CRO | ¥1.61B | ¥221M |
| HumanResource | ¥11.20B | ¥1.19B |
| Item | Forecast |
|---|
| Net Sales Forecast | ¥51.44B |
| Operating Income Forecast | ¥4.64B |
| Ordinary Income Forecast | ¥4.66B |
| Net Income Attributable to Owners Forecast | ¥2.77B |
| Basic EPS Forecast | ¥144.50 |
| Dividend Per Share Forecast | ¥94.00 |
WDB Holdings’ FY2027 Q1 results were mixed, with stable topline resilience but clear margin and earnings pressure versus the prior year. Revenue was 128.03bn JPY, down 1.3% YoY, while operating income declined 10.6% to 11.81bn JPY. Ordinary income fell 11.1% to 11.90bn JPY and net income decreased 20.4% to 6.84bn JPY, reflecting both operating deleverage and non-recurring losses. Gross margin edged up by roughly 5 bps to 23.4%, but operating margin compressed by about 95 bps to 9.2% as SG&A intensity increased. Net margin declined by about 129 bps to 5.3% on a higher tax burden (effective tax rate 33.3%) and an extraordinary loss of 0.95bn JPY related to fixed-asset disposals. Segment-wise, Human Resource remained the engine at 112.02bn JPY sales (+0.8% YoY) and 11.91bn JPY operating income (+0.5% YoY), while CRO contracted materially with sales of 16.10bn JPY (-13.8%) and operating income of 2.21bn JPY (-15.6%). The CRO shortfall and higher holding-company level costs weighed on consolidated operating leverage. Liquidity remains very strong, with a current ratio of 348.5% and cash and deposits of 186.33bn JPY. Leverage is conservative with D/E at 0.26x and equity ratio at 76.1%. DuPont shows ROE at 2.0% for the quarter, driven by modest net margin, low asset turnover (0.297), and prudent leverage (1.26x). The company recorded low non-operating income relative to sales, so earnings were mainly driven by core operations and a one-time extraordinary loss. Q1 progress toward full-year guidance is broadly on track: revenue at 24.9%, operating income at 25.5%, ordinary income at 25.5%, and net income at 24.7%. A key quality alert is receivables collection, with DSO of 191 days, which could pressure working capital if sustained. The revenue mix is concentrated, with Human Resource representing 87.4% of consolidated sales, amplifying exposure to staffing demand and wage-cost dynamics. Overall, the quarter shows resilience in the core staffing franchise but margin compression from higher SG&A and CRO softness, with forward performance reliant on cost discipline, CRO recovery, and improved cash conversion.
ROE decomposition: ROE (2.0%) = Net Profit Margin (5.3%) × Asset Turnover (0.297) × Financial Leverage (1.26x). The largest change driver YoY was the net profit margin, which declined as operating margin compressed from ~10.2% to 9.2% and net margin fell from ~6.6% to 5.3%. Business drivers included higher SG&A (14.2% of sales vs ~13.2% YoY) and a larger tax burden (tax burden ratio 0.624) alongside an extraordinary loss (0.95bn JPY) versus a small extraordinary gain last year. Asset turnover remained low, consistent with a cash-rich balance sheet and substantial PPE relative to sales. The interest burden (EBT/EBIT ≈ 0.928) indicates minimal finance cost pressure, so leverage did not dilute returns. The cost uptick appears partly structural (central costs at the holding level) and partly mix-related due to CRO underperformance; near-term sustainability hinges on reversing CRO softness and tightening SG&A. One flag is SG&A growth outpacing revenue in the quarter, evidencing negative operating leverage.
- Revenue declined 1.3% YoY to 128.03bn JPY, with core Human Resource up 0.8% offset by a 13.8% decline in CRO.
- Operating income decreased 10.6% to 11.81bn JPY on higher SG&A and lower CRO profitability.
- Gross profit was 29.99bn JPY; gross margin ticked up to 23.4%, but operating leverage weakened.
- Guidance tracking: Q1 progress vs full-year plan is revenue 24.9% of 514.39bn JPY, operating income 25.5% of 46.39bn JPY, ordinary income 25.5% of 46.63bn JPY, and net income 24.7% of 27.72bn JPY—broadly in line with a standard linear run-rate.
- The CRO slowdown (revenue -13.8%, OI -15.6%) is the principal top-line and margin headwind; core staffing growth remains steady with a 10.6% segment margin.
- Forward-looking, stabilization or re-acceleration in CRO and SG&A normalization are key to recovering the consolidated operating margin toward guidance.
- Liquidity: Current ratio 348.5% and quick ratio 348.5% indicate a very strong short-term position; cash and deposits of 186.33bn JPY comfortably cover current liabilities of 73.90bn JPY.
- Solvency: D/E of 0.26x and equity ratio of 76.1% reflect a conservative capital structure.
- Maturity profile: Current assets of 257.56bn JPY exceed current liabilities by 183.66bn JPY, suggesting low refinancing risk; payables (29.52bn JPY) and tax-related accruals are readily covered by cash and receivables.
- Off-B/S items: Asset retirement obligations are modest at 2.42bn JPY.
- Capital intensity: PPE of 150.53bn JPY (35.0% of assets) is notable for a services-centric group, but leverage remains low and cash ample.
Inventories: +0.04bn (+185.3%) - small absolute level, indicates minor build with negligible balance-sheet risk. Accounts Payable (trade): +5.69bn (+23.9%) - higher payables align with operational scale and may support working capital. Accrued Consumption Taxes: +4.29bn (+58.1%) - higher tax-related accruals affect near-term cash outflows. Income Taxes Payable: -3.94bn (-51.5%) - normalization after prior-year payment timing, easing immediate cash obligations.
- Non-operating income is minimal relative to sales, and earnings were primarily operational, but were reduced by an extraordinary loss of 0.95bn JPY (asset disposals), which is non-recurring by nature.
- Working capital risk is indicated by receivables collection (DSO 191 days), which could dampen cash conversion despite reported net profits.
- With cash and deposits at 186.33bn JPY and low leverage, near-term funding for operations and capex appears well supported even if collections remain slow.
- No indications of outsized non-operating dependence; interest burden suggests low financing drag.
- Company full-year forecast: EPS 144.5 JPY and DPS 94.0 JPY imply a payout ratio of ~65.1%.
- This is slightly above the 60% sustainability benchmark, but the large cash position and conservative leverage underpin near-term capacity to fund dividends.
- Monitoring points: cash conversion versus earnings (given elevated DSO) and trajectory of operating margin to maintain distributable profit in line with guidance.
Business risks include Segment concentration: Human Resource contributes 87.4% of revenue, increasing exposure to staffing demand cycles and wage-cost dynamics., CRO segment contraction (-13.8% revenue, -15.6% operating income) risks further mix and profitability headwinds if not stabilized., Pricing and cost pressure in staffing could compress margins if client rate adjustments lag wage inflation..
Financial risks include Receivables collection risk (DSO 191 days) may pressure operating cash flow and elevate working capital requirements., Higher effective tax rate (33.3%) reduces net profit conversion and ROE., Extraordinary losses from asset dispositions impacted NI and could recur if portfolio optimization continues..
Key concerns include Operating margin compression (~95 bps YoY) from higher SG&A ratio., Net margin decline (~129 bps YoY) compounded by extraordinary loss., CRO softness dragging consolidated growth and mix..
Key takeaways include Core staffing franchise remains resilient with slight growth and a 10.6% segment margin., CRO downturn is the primary drag on consolidated performance and operating leverage., Company maintains fortress liquidity and low leverage, limiting downside financial risk., Quarterly progress toward full-year guidance is broadly on track, keeping FY targets achievable if CRO and costs normalize., Receivables collection requires attention to safeguard cash conversion and dividend capacity..
Metrics to watch include DSO and receivables turnover trajectory, Consolidated operating margin and SG&A/revenue ratio, CRO order intake and revenue recovery, Effective tax rate vs guidance, Ordinary income progression vs 25% quarterly run-rate.
Regarding relative positioning, Within Japan staffing peers, WDB combines strong liquidity and conservative leverage with decent, but currently pressured, profitability; cash conversion (DSO) is weaker than best-in-class, and CRO volatility differentiates its earnings profile.
