Elitz Holdings Co.,Ltd. FY2025 Q4 Earnings Report

Financial Highlights

• Net Sales: ¥6.38B
• Operating Income: ¥1.02B
• Net Income: ¥642M
• EPS: ¥202.07

Income Statement

Balance Sheet

Cash Flow Statement

Profitability Ratios

Year-over-Year Comparison

Share Information

Dividend 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

Elitz Holdings (55330) delivered solid FY2025 Q4 consolidated results under JGAAP, with revenue of ¥6,385 million (+9.4% YoY) and operating income of ¥1,021 million (+5.5% YoY). Profitability remained healthy: gross profit was ¥4,515 million, implying a high gross margin of 70.7%, consistent with an asset-light, service-centric model. Operating margin was approximately 16.0%, with ordinary income equal to operating income, indicating limited non-operating noise and low financing drag. Net income rose 9.0% YoY to ¥699 million, translating to a net margin of 10.95% and reported ROE of 13.16%, in line with DuPont-calculated ROE. The DuPont breakdown shows net margin of 10.95%, asset turnover of 0.669x, and financial leverage of 1.80x, reflecting balanced profitability, moderate efficiency, and conservative leverage. Cash generation was robust: operating cash flow (OCF) of ¥869 million exceeded net income (OCF/NI = 1.24), and free cash flow (FCF) was ¥656 million after ¥213 million investing outflows. The balance sheet appears sound with total assets of ¥9,551 million, total liabilities of ¥4,335 million, and total equity of ¥5,310 million, implying a debt-to-equity ratio of 0.82x and ample liquidity (current ratio 229%). Interest expense was modest at ¥18 million, with EBIT interest coverage of 56.2x, underscoring low financial risk. The effective tax rate, inferred from disclosed income tax, is approximately 32.4% (¥331 million tax on about ¥1,021 million pre-tax), despite a 0.0% placeholder shown in the metrics; we rely on the computed figure. Dividend data show DPS and payout as zero, suggesting no dividend for the period; financing cash outflows of ¥288 million likely relate to debt repayments or other financing activities rather than cash dividends. Certain disclosures are missing or zero-coded (e.g., Cash & Equivalents, Equity Ratio, share count metrics), which we treat as unreported rather than actual zero. Despite these data limitations, the available figures indicate resilient earnings growth, strong cash conversion, and ample balance sheet flexibility. Operating leverage was positive but modest, as operating income growth lagged revenue growth, implying some cost inflation or mix effects. Working capital management appears disciplined given positive OCF relative to EBITDA, though some cash was absorbed by tax payments and operations. Overall, Elitz enters the next fiscal year with healthy profitability, solid liquidity, and capacity to fund organic investments while maintaining financial resilience.

Profitability Analysis

ROE_decomposition:

• net_profit_margin: 10.95%
• asset_turnover: 0.669x
• financial_leverage: 1.80x
• calculated_ROE: 13.16%
• commentary: ROE is driven primarily by healthy margins and moderate leverage; asset turnover is typical for a service-centric, low-capital-intensity model. margin_quality:
• gross_margin: 70.7% (¥4,515m/¥6,385m)
• operating_margin: 16.0% (¥1,021m/¥6,385m)
• net_margin: 10.95% (¥699m/¥6,385m)
• tax_rate_inferred: ≈32.4% (¥330.5m/¥1,021m pretax)
• observations: High gross margin indicates strong pricing and mix; some compression at operating level versus revenue growth suggests rising operating costs or investment in SG&A. operating_leverage:
• revenue_growth_YoY: 9.4%
• operating_income_growth_YoY: 5.5%
• assessment: Positive but modest operating leverage; cost growth slightly outpaced revenue growth, tempering OI expansion.

Growth Assessment

revenue_sustainability: Top-line growth of 9.4% YoY appears broad-based with limited reliance on non-operating items, consistent with recurring service revenues. profit_quality: Ordinary income equals operating income, and interest burden is minimal, indicating core earnings drive bottom-line growth. Net income growth of 9.0% aligns with revenue expansion. outlook: With solid demand momentum and a service-heavy mix, growth should be supported by recurring streams; maintaining operating discipline will be key to converting revenue growth into margin expansion.

Financial Health

liquidity:

• current_assets: ¥5,354.7m
• current_liabilities: ¥2,336.9m
• current_ratio: 229.1%
• quick_ratio: 229.1% (inventories unreported)
• working_capital: ¥3,017.8m
• commentary: Strong liquidity headroom supports operating needs and modest investment outlays. solvency_capital_structure:
• total_assets: ¥9,551m
• total_liabilities: ¥4,335.1m
• total_equity: ¥5,310m
• debt_to_equity: 0.82x (using total liabilities as proxy)
• interest_coverage: 56.2x (EBIT/interest)
• equity_ratio_note: Equity ratio shown as 0.0% is treated as unreported; based on totals, equity/asset ≈ 55.6%.
• assessment: Conservative leverage and strong coverage indicate low solvency risk.

Cash Flow Quality

earnings_quality:

• OCF: ¥869m
• net_income: ¥699m
• OCF_to_NI: 1.24x
• EBITDA: ¥1,149.9m
• commentary: OCF comfortably exceeds NI, consistent with high-quality earnings and disciplined working capital. FCF_analysis:
• investing_CF: ¥-213m
• free_cash_flow: ¥656m
• capex_intensity_proxy: Investing outflows ≈ 3.3% of revenue, indicating modest capital needs.
• interpretation: Healthy FCF generation provides funding for deleveraging or reinvestment. working_capital:
• observations: Positive OCF alongside strong liquidity suggests effective receivables and payables management; specific inventory data is unreported.

Dividend Sustainability

payout_ratio_assessment: Reported payout ratio and DPS are zero (no dividend). With NI of ¥699m and FCF of ¥656m, capacity exists to fund distributions if policy permits. FCF_coverage: Not applicable for the period due to no dividend; FCF covers potential modest dividends comfortably. policy_outlook: No explicit dividend policy disclosed in provided data; cash generation and low leverage give flexibility to initiate or increase shareholder returns subject to growth investments and policy decisions.

Risk Assessment

Business Risks:

• Revenue sensitivity to real estate market cycles and rental demand conditions.
• Potential margin pressure from wage inflation and SG&A growth outpacing revenue.
• Customer churn or lower transaction volumes affecting fee-based income.
• Regulatory changes in housing and property-related services in Japan.
• Geographic concentration risk if operations are regionally focused.

Financial Risks:

• Refinancing and interest rate risks, albeit mitigated by low interest burden.
• Working capital swings impacting OCF despite strong baseline cash generation.
• Concentration of liabilities (details of debt composition not disclosed).
• Data gaps (cash balance, equity ratio) complicate precise ratio monitoring.

Key Concerns:

• Operating income growth lagging revenue growth suggests cost pressure.
• Limited disclosure on cash and share count impedes per-share and liquidity analysis.
• Dependence on continued demand resilience to sustain high margins.

Investment Implications

Key Takeaways:

• Solid top-line growth (+9.4% YoY) with healthy profitability (OP margin ~16%).
• ROE of 13.16% supported by strong net margin and modest leverage.
• High cash conversion (OCF/NI 1.24x) and positive FCF (¥656m).
• Conservative balance sheet with strong liquidity (current ratio 229%).
• Interest coverage of 56.2x indicates minimal financing risk.
• Operating leverage modest; watch cost discipline to protect margins.

Metrics to Watch:

• Operating margin trend versus revenue growth (cost inflation monitoring).
• OCF/NI and FCF sustainability, including working capital movements.
• Interest expense trajectory and debt composition.
• Capital allocation signals (dividends, buybacks, growth investments).
• Client/tenant retention and transaction volumes (if disclosed).
• Effective tax rate normalization and policy changes.

Relative Positioning: Within service-oriented real estate and property-related peers, Elitz exhibits above-average gross margins, solid ROE, and stronger-than-average liquidity with conservative leverage, positioning it as financially resilient and cash-generative.

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