| Metric | Current Period | Same Period of Previous Year | YoY |
|---|---|---|---|
| Revenue | ¥2.983B | ¥2.635B | +13.2% |
| Operating Income | ¥0.987B | ¥0.882B | +12.0% |
| Profit Before Tax | ¥0.937B | ¥0.879B | +6.5% |
| Net Income | ¥0.632B | ¥0.568B | +11.3% |
| ROE | 21.9% | 19.9% | - |
The company achieved double-digit increases in both revenue and profit, centered on its rent debt guarantee business, while maintaining a high level of profitability, resulting in a solid financial performance. Revenue was ¥2.983B (¥2.635B in the previous year, YoY +13.2%), Operating Income was ¥0.987B (¥0.882B in the previous year, YoY +12.0%), Profit Before Tax was ¥0.937B (¥0.879B in the previous year, YoY +6.5%), and Net Income attributable to owners of the parent was ¥0.633B (¥0.568B in the previous year, YoY +11.3%). While revenue growth was driven by the core rent debt guarantee service (+10.9%) as well as the rent collection agency service (+19.4%), the Operating Income margin narrowed slightly to 33.1% (33.5% in the previous year), and increased finance costs compressed the growth in Profit Before Tax.
【Revenue】Revenue was ¥2.983B (YoY +13.2%), maintaining double-digit growth. By service, the rent debt guarantee service, which accounts for the majority of revenue, generated ¥2.621B (¥2.363B in the previous year, YoY +10.9%); the rent collection agency service generated ¥0.299B (¥0.250B in the previous year, YoY +19.4%); and other services generated ¥0.063B (¥0.022B in the previous year, YoY +182.9%). All services contributed to revenue growth. The Group operates as a single segment comprising the rent debt guarantee business, with no significant change in its business mix.
【Profit and Loss】Operating Income was ¥0.987B (YoY +12.0%), and the Operating Income margin was 33.1%, down 0.4pt from 33.5% in the previous year. The operating expense ratio rose slightly to 68.5% (67.9% in the previous year), indicating that expenses grew slightly faster than revenue. Below Operating Income, finance costs increased to ¥0.052B (¥0.044B in the previous year, +20.2%), while finance income declined to ¥0.002B (¥0.041B in the previous year), causing Profit Before Tax to increase by 6.5% YoY to ¥0.937B, below the growth rate of Operating Income. Income taxes and other taxes were ¥0.304B (¥0.311B in the previous year), remaining broadly flat, while the lower effective tax rate supported the growth in Net Income (+11.3%). Overall, the company reported increases in both revenue and profit.
The Group operates as a single segment comprising the rent debt guarantee business and related businesses, and there are no reportable business segments to distinguish. By product and service, the rent debt guarantee service generated ¥2.621B (YoY +10.9%), accounting for approximately 88% of total revenue, followed by the rent collection agency service at ¥0.299B (YoY +19.4%) and other services at ¥0.063B (YoY +182.9%). Revenue derived from customer contracts, comprising the collection agency and other services, was ¥0.361B (YoY +32.7%), showing higher growth than guarantee revenue; the expansion of ancillary services contributed to revenue growth.
【Profitability】ROE was 22.0%, remaining broadly in line with 22.1% in the previous year. The Operating Income margin of 33.1% (33.5% in the previous year) and Net Income margin of 21.2% (21.6% in the previous year) both narrowed only slightly, and the high-margin structure was maintained. 【Cash Quality】Operating Cash Flow (OCF) was ¥0.828B, equivalent to 1.31 times Net Income of ¥0.633B, demonstrating cash generation in excess of earnings. 【Investment Efficiency】Total asset turnover was 0.39x, calculated as Revenue of ¥2.983B ÷ total assets of ¥7.614B. Financial leverage (total assets/equity) was 2.64x, and ROE was supported by the combination of asset efficiency and leverage. 【Financial Soundness】The Equity Ratio was 37.9% (38.5% in the previous year). The current ratio was approximately 151%, calculated as current assets of ¥2.950B ÷ current liabilities of ¥1.957B. Against interest-bearing debt (total short- and long-term borrowings) of ¥2.587B, interest coverage based on Operating Income was approximately 18.9x, indicating substantial capacity to absorb interest expenses.
Operating Cash Flow was ¥0.828B, a substantial YoY increase of +93.8% from ¥0.427B in the previous year, primarily because income taxes and other taxes paid, which had been high in the previous period, declined from ¥0.552B to ¥0.309B. Investing Cash Flow was limited to an outflow of ¥0.047B, mainly due to capital expenditures of ¥0.016B, resulting in Free Cash Flow (Operating Cash Flow + Investing Cash Flow) of ¥0.781B. Financing Cash Flow was an outflow of ¥0.719B, centered on repayments of long-term borrowings of ¥0.086B and dividend payments of ¥0.600B, indicating that shareholder returns and debt reduction were implemented within the range of Free Cash Flow. As a result, cash and cash equivalents accumulated to ¥1.598B at the end of the period (up ¥0.062B year on year), and liquidity remains stable.
Operating Cash Flow was ¥0.828B, equivalent to 1.31 times Net Income, indicating strong cash support for earnings. Meanwhile, the growth in Profit Before Tax (+6.5%) was below the growth in Operating Income (+12.0%). This difference resulted from fluctuations in non-operating gains and losses that cannot necessarily be considered recurring: finance income plunged from ¥0.041B in the previous year to ¥0.002B, while finance costs increased from ¥0.044B to ¥0.052B. Comprehensive income was ¥0.634B, almost equal to Net Income attributable to owners of the parent of ¥0.633B. Since other comprehensive income was limited to ¥0.002B in actuarial differences related to retirement benefits, the divergence between Comprehensive Income and Net Income was immaterial. Trade receivables increased to ¥1.178B (¥1.180B in the previous year; ¥1.0496B before conversion), indicating somewhat greater cash tied up in working capital, although the increase in trade payables partially offset this effect.
The company’s forecast for the fiscal year ending December 2026 is Revenue of ¥3.307B (YoY +10.9%), Operating Income of ¥1.190B (YoY +20.5%), Net Income of ¥0.790B (YoY +24.9%), and EPS of ¥151.46. The forecast growth rate for Operating Income (+20.5%) exceeds the forecast growth rate for Revenue (+10.9%), incorporating a planned re-expansion of operating leverage through top-line growth outpacing expense growth. The plan assumes a reversal from the contraction in the current-period Operating Income margin (33.1%, compared with 33.5% in the previous year), and achievement will be assessed based on the trend in profit margins from the next fiscal period onward.
The company conducted a 2-for-1 stock split of its common shares on October 11, 2025. As a result, the year-end dividend for the current period (fiscal year ending December 2025) was changed from the previously planned ¥32.68 to ¥35.00 on a post-split basis. The Q2 dividend was disclosed on a pre-split basis and therefore is denominated differently from the year-end dividend; consequently, a simple calculation of the total annual dividend and Payout Ratio based on the current-period results is complicated by the effect of the stock split. For the next fiscal period (fiscal year ending December 2026), the plan is based on a forecast dividend of ¥38 (post-split basis) and forecast EPS of ¥151.46, resulting in a Payout Ratio of approximately 25.1% (¥38 ÷ ¥151.46), indicating a dividend plan within a sustainable range. Dividend payments recorded in the current-period statement of cash flows were ¥0.600B.
Goodwill impairment risk: Goodwill of ¥3.604B represents 47.3% of total assets of ¥7.614B and 124.8% of equity of ¥2.888B. Accordingly, deterioration in earnings power could have a significant impact on equity through impairment losses.
Increase in trade receivables and collection cycle: Trade receivables increased to ¥1.178B (¥1.050B in the previous year, YoY +12.2%), corresponding to approximately 144 days of revenue. Given the nature of the rent debt guarantee business, trends in delinquencies and collection delays have a direct impact on the working capital burden.
Financial guarantee contracts (credit-related contingent events): The balance of financial guarantee contracts on the balance sheet was ¥1.087B (¥1.025B in the previous year), incorporating the possibility of contingent cash outflows associated with the rent guarantee business.
Profitability and Returns
| Metric | Company | Median (IQR) | Delta |
|---|---|---|---|
| Return on Equity | 22.0% | – | – |
| Operating Income Margin | 33.1% | – | – |
| Net Income Margin | 21.2% | – | – |
Comparable median data within the industry has not been collected for Return on Equity, Operating Income Margin, or Net Income Margin.
Growth and Capital Efficiency
| Metric | Company | Median (IQR) | Delta |
|---|---|---|---|
| Revenue Growth (Year on Year) | 13.2% | – | – |
Similarly, industry median data has not been collected for Revenue Growth.
Source: Compiled by the company
The Operating Income margin of 33.1% and ROE of 22.0% remained broadly flat year on year, indicating that the high-margin structure of the rent debt guarantee business continued to be maintained stably during the current period.
Operating Cash Flow increased substantially by +93.8% year on year; however, the primary factor was the decline in income taxes and other taxes paid, which had been relatively high in the previous period. It should therefore be noted that this increase does not itself reflect the +12.0% growth in Operating Income.
Goodwill accounts for approximately half of total assets, creating a distinctive capital structure. As the company forecasts a reversal in the Operating Income margin in the next fiscal period (+20.5%), attention will focus on confirming the sustainability of the earnings structure alongside the progress toward achieving that plan.
This report is an earnings analysis document automatically generated by AI based on XBRL earnings summary data. It does not recommend investment in any specific security. Industry benchmarks are reference information compiled by the company based on publicly available earnings data. Investment decisions should be made at your own discretion and responsibility, after consulting a professional adviser as necessary.
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