TAKE AND GIVE. NEEDS Co.,Ltd. FY2025 Q2 Earnings Report

Financial Highlights

• Net Sales: ¥21.31B
• Operating Income: ¥-465M
• Net Income: ¥437M
• EPS: ¥-34.38

Income Statement

Balance Sheet

Cash Flow Statement

Profitability Ratios

Year-over-Year Comparison

Share Information

Dividend Information

Segment Information

Full Year Forecast

Disclaimer

This data was automatically extracted from XBRL files. Please refer to the original disclosure documents for accuracy.

AI Financial Analysis

Executive Summary

Take and Give Needs (4331) reported FY2025 Q2 consolidated results under JGAAP showing modest top-line decline but materially weaker profitability. Revenue was 21.3bn yen (-1.9% YoY), with gross profit of 14.5bn yen and a robust reported gross margin of 68.0%. Despite the high gross margin profile typical of a venue-based wedding model, operating income fell to -0.47bn yen (-58.6% YoY), highlighting elevated fixed costs and insufficient SG&A flexibility. Ordinary income was -0.74bn yen and net income -0.50bn yen (-41.3% YoY), translating to a net margin of -2.35%. DuPont shows ROE at -2.90%, driven by negative margin, modest asset turnover of 0.40x, and relatively high financial leverage of 3.09x. EBITDA was positive at 0.52bn yen (2.4% margin), but EBIT remained negative, indicating that D&A is a key bridge from positive cash earnings to accounting losses. Operating cash flow was positive at 0.80bn yen, comfortably exceeding the accounting loss, implying supportive working capital movements (likely customer advances/deposits common in the wedding business). Financing cash outflows of -2.89bn yen suggest deleveraging or lease-related repayments; with dividends at zero, cash uses appear focused on balance sheet management. Balance sheet totals show assets of 53.3bn yen, liabilities of 35.0bn yen, and equity of 17.25bn yen; this implies an equity ratio of about 32.4% (derived), even though the disclosed equity ratio field shows 0.0% (undisclosed). Liquidity is tight but positive, with a current ratio of 103.3% and working capital of 0.47bn yen. Interest expense of 0.25bn yen against negative EBIT yields weak coverage on an EBIT basis, though EBITDA/interest is above 2x, providing some short-term cushion. The revenue decline alongside a much steeper contraction in operating profit points to meaningful operating leverage and highlights the need for utilization and cost control improvements in H2. Dividend payments are suspended (DPS 0), consistent with a period of earnings pressure and balance sheet focus. Several disclosures (e.g., cash and equivalents, inventories, equity ratio, capex) appear undisclosed in XBRL; analysis therefore relies on available non-zero data and derived ratios where appropriate. Overall, the company remains cash-generative from operations in the period but faces profitability headwinds, interest burden sensitivity, and limited liquidity headroom, making second-half execution and cost discipline critical.

Profitability Analysis

ROE of -2.90% decomposes into net margin -2.35%, asset turnover 0.40x, and financial leverage 3.09x. The primary driver of weak ROE is the negative margin; modest asset efficiency and high leverage amplify the effect. Gross margin is high at 68.0%, consistent with venue-driven service mix and prepayment model, but SG&A intensity pushed operating margin to -2.2%, evidencing under-absorption of fixed costs. EBITDA margin of 2.4% indicates the core operations can generate cash earnings, but D&A of 0.98bn yen depresses EBIT, reflecting prior investments in venues and related assets. Interest expense of 0.25bn yen versus negative EBIT results in negative EBIT interest coverage; on an EBITDA basis, coverage is roughly 2.0x, thin for a cyclical service business. Operating leverage is evident: a 1.9% revenue decline translated into a 58.6% YoY deterioration in operating income, implying high fixed-cost sensitivity to volume/mix/utilization. Margin quality is mixed: strong gross margins but weak operating margins suggest scope for cost takeout, pricing discipline, and venue utilization gains to restore profitability.

Growth Assessment

Revenue declined 1.9% YoY to 21.3bn yen, indicating soft demand, mix shifts, or timing effects in ceremonies/receptions. The disproportionate contraction in operating profit versus revenue signals that current volume is below the cost base needed to sustain profitability. Given EBITDA remains positive and OCF exceeded net income, underlying demand likely supports advance collections, but conversion to operating profit is constrained by fixed costs. Without disclosed segment or booking backlog data, sustainability of revenue is uncertain; typical seasonality in weddings may favor H2, but visibility is limited. Profit quality is pressured by negative EBIT and interest burden; any uplift will require improved venue utilization, higher average spend per wedding, and cancellation control. Outlook hinges on cost discipline and demand stabilization; even modest top-line growth could materially improve operating income due to high operating leverage, but the reverse is also true.

Financial Health

Total assets 53.25bn yen, liabilities 35.03bn yen, equity 17.25bn yen. Derived equity ratio is approximately 32.4% (equity/assets), though the equity ratio field was undisclosed. Debt-to-equity of 2.03x (using total liabilities) indicates a leveraged balance sheet for a services business. Current assets 14.52bn yen and current liabilities 14.05bn yen produce a current ratio of 103.3% and working capital of 0.47bn yen; liquidity is positive but thin. Quick ratio equals current ratio due to inventories being undisclosed; practically, near-term liquidity headroom is limited, so cash management is critical. Interest expense of 0.25bn yen alongside negative EBIT highlights solvency sensitivity if EBITDA weakens. Financing cash outflow of -2.89bn yen suggests repayments that reduce financial flexibility in the near term but may improve long-term solvency if tied to debt reduction.

Cash Flow Quality

OCF of 0.80bn yen against net income of -0.50bn yen (OCF/NI of -1.59) suggests earnings quality better than accruals, likely supported by working capital inflows (e.g., customer advances typical in weddings). EBITDA was 0.52bn yen, bridging to negative EBIT due to 0.98bn yen D&A, consistent with asset-heavy venues. Investing cash flow is undisclosed (0 in data), so capex and thus true free cash flow cannot be reliably assessed; the provided FCF of 0 should be treated as not available. Positive OCF despite losses is encouraging for near-term liquidity, but sustainability depends on bookings pipeline and event execution. Working capital dynamics are likely driven by deferred revenues and payables timing; reversal risk exists if bookings slow or cancellations increase.

Dividend Sustainability

DPS is 0.00 with a payout ratio of 0.0%, reflecting preservation of cash amid losses and leverage. With negative net income and undisclosed capex, assessing FCF coverage of dividends is not meaningful; the reported FCF coverage of 0.00x reflects missing investment data rather than true capacity. Given current EBIT losses and thin liquidity, internal funding priority appears to be operating stability and balance sheet management rather than distributions. Future policy will likely depend on achieving sustained positive operating margins, improving interest coverage, and visibility on cash generation.

Risk Assessment

Business Risks:

• Demand volatility in the wedding and events market, including macro sensitivity
• Demographics (declining marriage rates and smaller ceremonies) impacting volumes
• High operating leverage from venue fixed costs leading to profit volatility
• Cost inflation in food, labor, and utilities squeezing margins
• Cancellation and postponement risk affecting revenue recognition and cash flow timing
• Competition and pricing pressure from alternative venues and services
• Seasonality and event mix concentration

Financial Risks:

• Negative EBIT and limited EBIT interest coverage with interest expense of 0.25bn yen
• Leverage elevated at 2.03x liabilities/equity; refinancing and covenant risks if performance weakens
• Tight liquidity with current ratio near 1.0x and working capital of 0.47bn yen
• Reliance on working capital inflows (customer advances) that may reverse if bookings slow
• Visibility constraints due to undisclosed cash, inventories, and capex data

Key Concerns:

• Restoring positive operating margins amid modest revenue decline
• Managing interest burden with negative EBIT
• Maintaining liquidity headroom while executing potential debt repayments
• Lack of disclosure on cash and capex limiting assessment of runway and FCF

Investment Implications

Key Takeaways:

• Top line only slightly down (-1.9% YoY) but operating income fell sharply (-58.6% YoY), evidencing high operating leverage.
• Gross margin remains strong at 68.0%, yet SG&A absorption is insufficient, resulting in negative EBIT.
• OCF of 0.80bn yen is a positive contrast to the net loss, implying supportive working capital dynamics.
• Leverage is meaningful (2.03x liabilities/equity) and interest expense (0.25bn yen) constrains flexibility.
• Liquidity is thin (current ratio 103.3%), making H2 execution and cost control critical.
• Disclosure gaps (cash, capex, inventories) limit FCF and runway assessment.

Metrics to Watch:

• Booking backlog, average spend per wedding, and cancellation rates
• Venue utilization and SG&A efficiency (operating margin trajectory)
• Interest-bearing debt balance, interest cost trends, and covenant headroom
• Operating cash flow durability and working capital reversals
• Capex and maintenance requirements once disclosed
• EBITDA margin and EBITDA/interest coverage

Relative Positioning: Within Japan’s wedding services and venue operators, the company exhibits strong gross margins but weaker operating margin resilience and tighter liquidity than desired, with leverage and interest burden leaving it more exposed to demand fluctuations relative to peers that maintain higher utilization or lower fixed-cost intensity.

Disclaimer

This analysis was auto-generated by AI. Please note the following:

• No Guarantee of Accuracy: The accuracy and completeness of this analysis are not guaranteed. For accurate financial data, please refer to the original disclosure documents published on TDnet or other official sources
• Not Investment Advice: This analysis is for general informational purposes only and does not constitute investment advice under applicable securities laws. It is not a recommendation to buy or sell any specific securities
• At Your Own Risk: Investment decisions should be made at your own discretion and risk. We assume no liability for any losses incurred based on this analysis