| Metric | Current Period | Prior Year Period | YoY |
|---|---|---|---|
| Revenue / Net Sales | ¥12460.5B | ¥11503.0B | +8.3% |
| Operating Income / Operating Profit | ¥1668.8B | ¥1407.6B | +18.6% |
| Ordinary Income | ¥1478.0B | ¥1291.5B | +14.4% |
| Net Income / Net Profit | ¥395.3B | ¥287.8B | +37.4% |
| ROE | 4.3% | 3.4% | - |
The fiscal year ended March 2026 posted Revenue of 1兆2,460B円 (YoY +957B円 +8.3%), Operating Income of 1,669B円 (YoY +261B円 +18.6%), Ordinary Income of 1,478B円 (YoY +186B円 +14.4%), and Net Income attributable to owners of the parent of 395B円 (YoY +107B円 +37.4%), achieving revenue and profit growth. Operating margin improved to 13.4% (up +1.2pt from 12.2% prior year), and net margin improved to 3.2% (up +0.7pt from 2.5% prior year), indicating better profitability. By segment, Strategic Investment Business Operating Income expanded significantly by +156.9% YoY, and Real Estate Brokerage Business also grew steadily by +26.8%, reflecting progress in revenue diversification.
[Revenue] Revenue of 1兆2,460B円 (YoY +8.3%) was supported by increases across all segments. Urban Development Business recorded 3,999B円 (+14.6%), and Strategic Investment Business achieved high growth at 1,466B円 (+32.3%). Real Estate Brokerage Business was steady at 3,646B円 (+5.6%) supported by market conditions, and Property Management & Operation Business maintained scale at 3,643B円 (▲0.4%). Revenue composition was Urban Development 32.1%, Real Estate Brokerage 29.3%, Property Management & Operation 29.2%, Strategic Investment 11.8%, indicating increased portfolio stability.
[Profitability] Operating Income of 1,669B円 (YoY +18.6%) outpaced revenue growth. Gross profit margin rose to 22.9% (up +1.6pt from 21.3%), and operating margin improved to 13.4% (up +1.2pt), reflecting higher profitability at gross and operating stages. Selling, general and administrative expenses (SG&A) were 1,186B円 (SG&A ratio 9.5%), up +13.5% YoY, but gross profit growth (+16.5%) exceeded this increase, delivering positive operating leverage. Non-operating items included interest expenses of 209B円 (prior year 140B円), increasing interest burden by 69B円. Ordinary Income was 1,478B円 (+14.4%), and Net Income attributable to owners of the parent was 395B円 (+37.4%), producing significant bottom-line growth. Extraordinary items were net ▲6.7B円 (extraordinary income 97.8B円, extraordinary loss 104.5B円) with limited impact; step-up acquisition gains of 34B円 and gains on sale of subsidiary shares of 95B円 contributed, while impairment losses of 56.7B円 and valuation losses on investment securities of 28.8B円 occurred. In conclusion, the company achieved higher revenue and profits.
Urban Development Business delivered Operating Income of 752B円 (YoY +6.6%), with a margin of 18.8%, maintaining its position as the core high-margin business. Real Estate Brokerage Business posted Operating Income of 644B円 (+26.8%) with a margin of 17.7%, a substantial increase aided by favorable market conditions and higher-value transactions. Strategic Investment Business recorded Operating Income of 132B円 (+156.9%), a 2.6x increase from 52B円 prior year, improving margin to 9.0% (prior year 5.2%). Development and operation of renewable energy and logistics facilities ramped up and materially contributed to earnings. Property Management & Operation Business secured stable revenue with Operating Income of 272B円 (+8.6%) and a margin of 7.5%. Corporate expenses were ▲114B円 (prior year ▲109B円), a slight increase.
[Profitability] Operating margin of 13.4% improved by +1.2pt from 12.2%, and gross profit margin of 22.9% (up +1.6pt from 21.3%) contributed to improved profitability at the gross and operating stages. ROE of 4.3% was maintained at prior-year levels, and net margin improved to 3.2% (up +0.7pt from 2.5%), enhancing shareholder value. [Cash Quality] Operating Cash Flow (OCF) / Net Income was 1.34x, a healthy level, but with OCF of 1,295B円 versus EBITDA of 2,355B円 (Operating Income + depreciation + amortization of goodwill), OCF/EBITDA was 0.55x and cash conversion efficiency remained low. The main cause was working capital absorption due to an increase in inventories for sale and work-in-progress (▲672B円). [Investment Efficiency] Total asset turnover was 0.36x (prior year 0.35x), a slight improvement; BPS was ¥1,260, and basic EPS was ¥135.45 (prior year ¥108.69, +24.6%), indicating increased shareholder value. [Financial Soundness] Equity Ratio was 26.8% (up +1.5pt from 25.3%), and D/E ratio was 2.73x (prior year 2.93x), showing high but improving dependence on interest-bearing debt. Current ratio was 280.9% and quick ratio 280.8%, indicating sufficient short-term liquidity. Cash and deposits were 1,878B円 versus short-term borrowings of 2,061B円 and bonds due within one year of 102B円 totaling 2,163B円, with Cash / Short-term Interest-bearing Debt of 0.87x, roughly covering short-term obligations.
Operating Cash Flow was 1,295B円 (prior year 474B円, +173.0%), a substantial improvement. Subtotal (before working capital changes) was 2,042B円 and robust, but increases in inventories for sale ▲672B円 and income taxes paid ▲625B円 were major cash outflows. Investing Cash Flow was ▲1,645B円 as large-scale investments continued, with purchases of tangible and intangible fixed assets ▲1,020B円 and acquisition of investment securities ▲572B円 as primary uses. Proceeds from sale of investment securities 193B円 and proceeds from sale of subsidiary shares 63B円 partially offset outflows. Free Cash Flow was ▲350B円, and shareholder returns including dividend payments ▲299B円 and treasury stock acquisitions ▲94B円 were funded through external financing. Financing Cash Flow was +558B円, with inflows from long-term borrowings 2,737B円 and bond issuances 1,000B円, net of repayments of long-term borrowings ▲2,153B円 and bond redemptions ▲706B円. Cash and cash equivalents increased to 1,805B円 at period end (from 1,575B円 at period start, +230B円).
Operating Income of 1,669B円 was the core profit, derived from gross profit of 2,855B円 less SG&A of 1,186B円. Non-operating major expense was interest expense of 209B円, but non-operating income including dividend income 86B円 and foreign exchange gains 19B円 totaled 57B円, partially offsetting interest and resulting in net non-operating expense of ▲190B円. Extraordinary items were net ▲6.7B円 (extraordinary income 97.8B円, extraordinary loss 104.5B円), with limited impact. Extraordinary income included step-up acquisition gains 34B円 and gains on sale of subsidiary shares 95B円; extraordinary losses included impairment losses 56.7B円, valuation losses on investment securities 28.8B円, and disaster losses 13.0B円, indicating transient factors were limited. Accrual ratio ((Net Income − Operating CF) / Total Assets) was ▲2.5%, low, suggesting good cash backing of profits. Comprehensive income of 1,170B円 exceeded Net Income of 395B円 significantly, and Other Comprehensive Income of 186B円 (valuation differences on available-for-sale securities 129B円, deferred hedge gains/losses 50B円, etc.) boosted equity.
For the fiscal year ending March 2027, the company forecasts Revenue of 1兆4,000B円 (YoY +12.4%), Operating Income of 1,900B円 (YoY +13.9%), Ordinary Income of 1,610B円 (YoY +8.9%), Net Income attributable to owners of the parent of 1,000B円, and EPS of ¥140.02. The company aims for double-digit increases in Revenue and Operating Income versus the current period; Ordinary Income growth is projected to lag Operating Income due to higher interest burden factored in. The Net Income target of 1,000B円 implies a +153.0% increase from current 395B円, suggesting the current period may have been suppressed by special factors. Progress rates vs current results are Revenue 89.0% (1兆2,460B円 / 1兆4,000B円) and Operating Income 87.8% (1,669B円 / 1,900B円), indicating an expected additional ~12–13% increase over the remaining 4–5 months. Achievement assumes sustained high brokerage market conditions, avoidance of development project timing delays, and stabilization of Strategic Investment earnings.
Annual dividend per share is ¥48 (interim ¥22, year-end ¥26), with a payout ratio of 33.6% (based on basic EPS ¥135.45). Total dividends amount to approximately 343B円 (based on shares outstanding excluding treasury stock), and distributable profit relative to Net Income of 395B円 is sufficient. However, Free Cash Flow was ▲350B円, so cash coverage for dividends is insufficient and depends on investment recoveries, asset sales, and external financing. Treasury stock acquisitions amounted to 94B円 with dispositions of 4B円, for a net 90B円 increase in treasury stock. Total shareholder returns (dividends + treasury stock acquisition) reached approximately 433B円, but sustainability depends on asset recycling and financing capacity due to negative FCF. Forecast dividend for FY ending March 2027 is provisional at ¥25, but supplemental year-end dividend could preserve the total ¥48 target. Retained earnings of 5,604B円 provide ample dividend capacity and support dividend sustainability from a balance sheet perspective.
Leverage level and interest burden: With D/E ratio of 2.73x and Debt/EBITDA of 6.31x, dependence on interest-bearing debt is high, and rising interest rates could materially increase interest expenses. This fiscal year interest expense rose to 209B円 (prior year 140B円, +69B円), and the interest burden coefficient (interest expense / Revenue) increased to 0.88. Interest coverage is 7.98x on an EBIT basis and 11.26x on an EBITDA basis, indicating current resilience, but a prolonged adverse interest environment would heighten profit pressure.
Cash conversion efficiency and working capital management: With OCF of 1,295B円 versus EBITDA of 2,355B円, OCF/EBITDA is 0.55x and low; build-up of inventories for sale and work-in-progress (▲672B円) delays cash conversion. FCF was ▲350B円, and reliance on external financing for dividend and share buybacks continues, raising liquidity risk if inventory turnover slows or property handovers are delayed.
Business mix and market sensitivity: Real Estate Brokerage Business (Operating Income 644B円, margin 17.7%) is highly sensitive to market conditions; brokerage fees depend on transaction volume and pricing. Rapid growth in Strategic Investment Business (Operating Income 132B円, YoY +156.9%) contributes to earnings but entails variability in investment realization timing and market risks in overseas development and renewable energy. A slight decline in Property Management & Operation Business (Revenue ▲0.4%) suggests maturation, concentrating future growth drivers in Urban Development and Strategic Investment.
Profitability & Returns
| Metric | Company | Median (IQR) | Delta |
|---|---|---|---|
| Operating Margin | 13.4% | 10.7% (6.8%–17.9%) | +2.7pt |
| Net Margin | 3.2% | 5.8% (2.5%–11.9%) | -2.6pt |
Operating margin exceeds the industry median by +2.7pt, indicating competitive strength at gross and operating stages. Net margin is ▲2.6pt below the median, reflecting interest and tax burdens.
Growth & Capital Efficiency
| Metric | Company | Median (IQR) | Delta |
|---|---|---|---|
| Revenue Growth Rate (YoY) | 8.3% | 12.8% (4.2%–29.2%) | -4.5pt |
Revenue growth rate trails the industry median by ▲4.5pt, but YoY +8.3% remains within stable growth territory, placing the company at a mid-range industry growth pace.
※ Source: Company compilation
Profitability improvement and diversified portfolio effects: Operating margin 13.4% (YoY +1.2pt) and gross profit margin 22.9% (YoY +1.6pt) show improved profitability at gross and operating stages. Strategic Investment Business Operating Income increased by +156.9% YoY and Real Estate Brokerage Business grew +26.8%, with portfolio diversification contributing to earnings stability. ROE of 4.3% is in line with prior year, and improved net margin advances shareholder value.
Challenges of leverage and cash conversion efficiency: D/E ratio 2.73x and Debt/EBITDA 6.31x reflect high dependence on interest-bearing debt, with interest expense up +69B円 YoY. OCF/EBITDA is 0.55x and low, and inventory build-up for sale and work-in-progress (▲672B円) delays cash realization. FCF was ▲350B円 and dependence on external financing for dividends and buybacks persists; improving inventory turnover and asset recycling speed are key priorities next year. Interest rate increases and the ability to improve liquidity are primary focus areas for this financial result.
This report was automatically generated by AI analyzing XBRL financial statement data. It does not constitute investment advice for any specific security. Industry benchmarks are reference information compiled by the company based on public financial statements. Investment decisions are your own responsibility; please consult a professional advisor as needed.