| Metric | Current Period | Prior Year Period | YoY |
|---|---|---|---|
| Revenue / Net Sales | ¥278.6B | ¥115.7B | +140.8% |
| Operating Income / Operating Profit | ¥51.5B | ¥22.7B | +127.1% |
| Ordinary Income | ¥55.9B | ¥25.6B | +117.9% |
| Net Income / Net Profit | ¥22.4B | ¥10.0B | +124.5% |
| ROE | 5.3% | 6.5% | - |
The fiscal year ended March 2026 recorded Revenue ¥278.6B (YoY +¥163.0B +140.8%), Operating Income ¥51.5B (YoY +¥28.8B +127.1%), Ordinary Income ¥55.9B (YoY +¥30.3B +117.9%), and Net Income attributable to owners of the parent ¥30.7B (YoY +¥14.3B +86.6%). The large increases in top-line and profits were primarily driven by expansion of the consolidated scope during the period (11 newly consolidated companies). Operating margin was 18.5% (prior year 19.6%), down 1.1pt, as company-wide expenses and integration costs associated with scale expansion and changes in segment mix slightly pressured profitability. Total assets increased substantially to ¥530.3B (prior year ¥182.6B) and total equity to ¥419.2B (prior year ¥154.1B), and the decline in asset turnover was a suppressing factor for ROE at 7.3%. Operating Cash Flow (OCF) increased to ¥26.8B (YoY +33.6%), but working capital absorption from accounts receivable growth left the OCF/EBITDA ratio at 0.46x, which is weak. Payout Ratio was 102.2% and FCF coverage 0.56x, meaning dividends were not covered by internal funds and cash on hand was used. The characteristic increase in working capital and integration costs in the first year of consolidated expansion affected both results and cash flows; going forward, efficiency improvements and realization of PMI effects will be focal points.
【Revenue】 Revenue ¥278.6B (YoY +¥163.0B +140.8%) was driven by the Asset Management segment, which surged to ¥263.3B (YoY +170.0%) and accounted for 94.5% of the total, with consolidated scope expansion (11 newly consolidated companies during the period) and AUM growth as the main drivers. The Financial Service segment declined to ¥15.3B (YoY -15.8%), and weakness in existing businesses affected the mix. By geography, in the prior year the US was ¥19.3B and Japan ¥95.7B, but in the current period domestic sales shifted to account for over 90% (specific breakdown not disclosed). The large change in sales composition was mainly due to an increase in consolidated subsidiaries, resulting in rapid top-line expansion.
【Profit & Loss】 Cost of Sales was ¥162.4B (Cost of Sales ratio 58.3%), yielding Gross Profit ¥116.2B (Gross Margin 41.7%), a 7.6pt decline from the prior year gross margin of 49.3%. SG&A was ¥64.7B (SG&A ratio 23.2%, prior year 29.6%); as a ratio this improved, but company-wide expenses and integration-related costs increased, causing Operating Margin to fall to 18.5% (prior year 19.6%), down 1.1pt. Non-operating items included Interest Income ¥1.4B and Dividend Income ¥0.7B, producing Ordinary Income ¥55.9B (YoY +117.9%). Extraordinary losses were ¥0.7B (impairment ¥0.2B, valuation losses on investment securities ¥0.1B) and extraordinary gains ¥0.2B, netting to a minor amount. Income taxes were ¥18.7B (effective tax rate 33.7%), and Non-controlling interests ¥6.0B were deducted, resulting in Net Income attributable to owners of the parent ¥30.7B (YoY +86.6%). The decline in gross margin and deductions for tax burden and non-controlling interests restrained profit growth, but the company delivered higher revenue and profit overall.
The Asset Management segment posted Revenue ¥263.3B (YoY +170.0%), Operating Income ¥56.9B (YoY +168.1%), and margin 21.6% (prior year 21.8%), with sales and profit expanding almost in tandem. The increase in consolidated subsidiaries and AUM growth contributed, and while margin decreased slightly it remained at a high level. The Financial Service segment recorded Revenue ¥15.3B (YoY -15.8%), Operating Income ¥2.7B (YoY -57.0%), and margin 17.9% (prior year 35.0%), a significant decline. Margin fell by 17.1pt due to deteriorating profitability in existing businesses and insufficient cost-structure adjustments. Of the total Operating Income ¥51.5B, Asset Management accounted for the majority, highlighting concentration of the earnings base. Segment reconciliation amount was -¥8.1B (prior year -¥4.9B), reflecting increased holding-company expenses.
【Profitability】Operating Margin 18.5% (prior year 19.6%) decreased 1.1pt. Gross Margin 41.7% (prior year 49.3%) decreased 7.6pt, affected by changes in cost-of-sales composition from consolidated expansion and higher integration costs. ROE 7.3% decomposes to Net Profit Margin 11.0% × Total Asset Turnover 0.525 × Financial Leverage 1.26; the main driver was the decline in turnover due to rapid asset increases (accumulation of cash, accounts receivable, and investment securities). Tax burden factor 0.554 (effective tax rate 33.7%) is at a normal level; deduction of Non-controlling interests ¥6.0B lowered Net Income attributable to owners of the parent margin to 11.0% (prior year 14.2%). 【Cash Quality】Operating CF ¥26.8B is 0.87x of Net Income ¥30.7B, and OCF/EBITDA ratio is 0.46x, which is weak, primarily due to accounts receivable increases absorbing working capital. DSO (Accounts Receivable ÷ Average Daily Sales) is 154 days and CCC 154 days, both long, indicating substantial scope for credit and collection improvements. 【Investment Efficiency】Total Asset Turnover 0.525x (prior year equivalent 0.634x) declined, with asset efficiency suppressed by the initial-year effects of consolidated expansion. Tangible fixed asset turnover is 36.7x, reflecting a light-asset model. 【Financial Soundness】Equity Ratio 79.1% (prior year 84.4%) and Debt-to-Equity Ratio 0.26x are very conservative. Current Ratio 360.5% and Quick Ratio 360.5% indicate ample short-term payment capacity. Goodwill ¥15.0B (3.6% of equity, 0.26x of EBITDA) suggests high impairment resilience.
Operating CF was ¥26.8B (YoY +33.6%), arriving from Subtotal (pre-tax profit adjustments) ¥40.0B less working capital increases (accounts receivable increase equivalent -¥29.0B and other changes in current assets/liabilities) and tax payments -¥13.9B. OCF/EBITDA ratio of 0.46x is weak, primarily due to the sharp increase in accounts receivable (ending balance ¥117.9B, prior year ¥26.1B, increase +¥91.8B). DSO of 154 days lengthened, and the diversification of credit/collection terms and reduced management efficiency following consolidated expansion are issues. Investing CF was -¥9.1B, including CapEx -¥0.4B, intangible asset acquisitions -¥4.5B, investment securities purchases -¥8.3B, proceeds from sales +¥10.8B, and acquisition of subsidiary shares -¥8.5B. Free Cash Flow (OCF + Investing CF) ¥17.7B covered total dividends ¥21.1B at 0.84x, indicating a shortfall. Financing CF was -¥21.9B, including dividends -¥21.1B, share buybacks -¥0.0B, lease liabilities repayments -¥0.7B, and acquisition of subsidiary shares -¥0.7B. Cash increased to ¥218.5B at period-end from ¥40.1B at the beginning of the period, including cash acquired from newly consolidated subsidiaries during the period +¥182.5B. Depreciation was ¥7.1B versus CapEx ¥0.4B, indicating restrained investment; improving working capital is key to strengthening cash generation.
Operating Income ¥51.5B is primarily business-derived, and the ¥4.4B gap to Ordinary Income ¥55.9B comprises non-operating income (Interest Income ¥1.4B, Dividend Income ¥0.7B, etc.), indicating limited one-off elements. Extraordinary items net to -¥0.5B (extraordinary losses ¥0.7B, extraordinary gains ¥0.2B), minor, with small impairments ¥0.2B and valuation losses on investment securities ¥0.1B. Total Comprehensive Income ¥46.6B comprised ¥40.2B attributable to owners of the parent and ¥6.4B to non-controlling interests; the difference from Net Income ¥30.7B is mainly due to a positive valuation difference on securities of ¥9.5B. Operating CF ¥26.8B is 0.87x of Net Income ¥30.7B, and working capital absorption from accounts receivable increased accruals, making the quality of cash conversion neutral. Pre-tax profit ¥55.4B → after-tax ¥30.7B yields a tax burden factor of 0.554, at a normal level. Overall earnings quality is broadly sound, but sustained cash generation depends on improvements in working capital efficiency.
Year-end dividend ¥13.75 and interim dividend ¥9.00 for an annual dividend of ¥22.75 (prior year ¥8.75, +160.0%), with Payout Ratio 102.2% (based on Net Income attributable to owners of the parent), exceeding earnings. Total dividends ¥21.1B versus FCF ¥17.7B gives coverage of 0.84x; even on an Operating CF basis coverage is 1.27x, indicating internal funds were insufficient and cash on hand was utilized. Share buybacks were -¥0.0B on the cash flow statement, effectively zero, leaving Total Return Ratio at the same level as the Payout Ratio. DOE (Dividends ÷ Equity) is 0.1%, which appears low on disclosure, but the high Payout Ratio indicates a strong practical willingness to return capital. However, given the FCF coverage shortfall and weak OCF/EBITDA ratio, further dividend increases will depend on improvements in working capital efficiency and expansion of Operating CF. The dividend policy emphasizes profit growth from consolidated expansion but needs re-alignment with cash generation capacity.
Working capital deterioration risk: Accounts receivable ¥117.9B (prior year ¥26.1B, +352%) and extended DSO of 154 days have resulted in a weak Operating CF/EBITDA ratio of 0.46x. Diversified credit and collection terms and lagging management systems due to increased consolidated subsidiaries are primary causes; future collection delays or bad debt risk could strain liquidity. If working capital compression is not realized, FCF generation may remain weak and dividend sustainability could be impaired.
Segment concentration risk: Asset Management accounts for 94.5% of revenue and the majority of Operating Income, while Financial Service is in decline (margin 35.0% → 17.9%). Revenue volatility from market conditions typical of the asset management industry (equity/bond markets, flows) raises earnings volatility and limits diversification benefits. Delay in restoring Financial Service profitability would hinder overall margin improvement.
PMI and integration risk: Integration delays in operations, systems, and personnel associated with 11 newly consolidated companies during the period and impairment risk on Goodwill ¥15.0B. Prolonged integration costs or failure to realize expected synergies could lock in a lower operating margin and suppress ROE. Goodwill/EBITDA ratio 0.26x suggests high impairment resilience, but if acquired companies underperform, impairment charges could arise.
Profitability & Returns
| Metric | Company | Median (IQR) | Delta |
|---|---|---|---|
| Operating Margin | 18.5% | 8.1% (3.6%–16.0%) | +10.4pt |
| Net Profit Margin | 8.0% | 5.8% (1.2%–11.6%) | +2.2pt |
Both operating margin and net profit margin exceed the industry median, placing profitability in the upper tier within the sector.
Growth & Capital Efficiency
| Metric | Company | Median (IQR) | Delta |
|---|---|---|---|
| Revenue Growth Rate (YoY) | 140.8% | 10.1% (1.7%–20.2%) | +130.7pt |
Revenue growth significantly outpaces the industry median, reflecting accelerated growth from consolidated expansion.
※ Source: Company compilation
Balancing accelerated growth from consolidated expansion with profitability: Revenue +140.8% and Operating Margin 18.5% are top-tier within the industry, but the sharp increase in working capital (Accounts Receivable +¥91.8B, DSO 154 days) and a weak OCF/EBITDA ratio of 0.46x could affect future cash generation and dividend sustainability. If PMI effects are realized and credit/collection management improves, synchronization of profit growth and cash conversion could lead to sustained improvement in ROE and shareholder returns.
Concentration in Asset Management and rehabilitation of Financial Service: With 94.5% of revenue concentrated in Asset Management, sensitivity to market conditions is high. Financial Service margin declined from 35.0% to 17.9%, so improving segment balance is a challenge. Recovery of Financial Service profitability and diversification would support margin improvement and earnings stability.
Reconcile dividend policy with cash flows: Payout Ratio 102.2% and FCF coverage 0.84x indicate dividends are not covered by internal funds and required use of cash on hand. While Current Ratio 360.5% and Equity Ratio 79.1% show strong financial capacity, the sustainability of dividends depends on improving working capital efficiency and expanding OCF. Future dividend increases will depend on the extent to which accounts receivable compression and DSO reduction can strengthen operating cash flow.
This report was automatically generated by AI analyzing XBRL financial statement data. It does not constitute a recommendation to invest in any specific security. Industry benchmarks are reference information compiled by the Company based on publicly available financial statements. Investment decisions are your own responsibility; please consult a professional advisor as needed before making investment decisions.