| Metric | This Period | Prior Year Same Period | YoY |
|---|---|---|---|
| Revenue | ¥446.4B | ¥404.0B | +10.5% |
| Operating Income | ¥39.0B | ¥26.9B | +44.6% |
| Ordinary Income | ¥39.1B | ¥27.0B | +45.0% |
| Net Income | ¥23.7B | ¥16.7B | +41.7% |
| ROE | 14.8% | 11.2% | - |
For the fiscal year ended March 2026, Revenue was ¥446.4B (YoY +¥42.4B +10.5%), Operating Income was ¥39.0B (YoY +¥12.1B +44.6%), Ordinary Income was ¥39.1B (YoY +¥12.1B +45.0%), and Net Income attributable to owners of the parent was ¥23.7B (YoY +¥7.0B +41.7%), delivering revenue growth and substantial profit expansion. Operating margin improved to 8.7% (up +2.0pt from 6.7% last year), and gross profit margin improved to 22.2% (up +1.9pt from 20.3%), indicating significant improvement in profitability; SG&A ratio was 13.5% (improved -0.1pt from 13.6%), reflecting better fixed-cost absorption. The core Administrative Staffing Services business led margin expansion with an operating margin of 9.9% (up +4.7pt), and Manufacturing Staffing Services also maintained high growth with Revenue +17.6% and Operating Income +38.0%. ROE stood at a strong 14.8%, financial soundness was high with an Equity Ratio of 71.2%, and the balance sheet is firmly Net cash-based.
[Revenue] Revenue of ¥446.4B (+10.5%) expanded on the two pillars of Administrative Staffing Services ¥355.3B (+9.1%) and Manufacturing Staffing Services ¥88.6B (+17.6%). Administrative accounted for 79.6% of the total, with growth driven by expansion of BPO/contract work and improved utilization rates. By service type, the mix comprised Temporary Staffing ¥267.8B, Contracting ¥176.3B, and Recruitment ¥2.1B. Manufacturing grew double digits led by demand recovery in food processing, mainly Temporary Staffing ¥86.4B. Other (Automobile Management Business) declined to ¥2.5B (-10.9%) but had a limited impact on the whole. Contract liabilities accumulated to ¥1.6B (from ¥0.8B a year earlier, +¥0.8B), suggesting resilience in short-term order environment.
[Profit & Loss] Gross profit was ¥99.2B (+21.0%), with gross margin improving to 22.2% (+1.9pt). The main drivers were a higher share of high-value-added Administrative projects (BPO/contracting) and improved utilization. SG&A was ¥60.3B (+9.5%), growing less than revenue, and SG&A ratio improved to 13.5% (-0.1pt) reflecting better fixed-cost absorption. As a result, Operating Income improved to ¥39.0B (+44.6%), and operating margin to 8.7% (+2.0pt). Non-operating income was ¥0.3B (mainly interest income ¥0.2B) and non-operating expenses were ¥0.1B (interest expense ¥0.1B), both minor, yielding Ordinary Income ¥39.1B (+45.0%). Extraordinary losses consisted only of impairment losses ¥1.2B, so one-off impacts were limited. Income taxes were ¥11.9B (effective tax rate 31.3%), resulting in Net Income attributable to owners of the parent of ¥23.7B (+41.7%). In conclusion, the company delivered revenue growth and substantial profit improvement with marked qualitative enhancements to profitability.
The Administrative Staffing Services business recorded Revenue ¥355.3B (+9.1%), Operating Income ¥35.2B (+46.6%), and operating margin 9.9% (improved +3.3pt from 6.6%), a significant improvement. Expansion of BPO/contracting projects and higher utilization raised gross margins, and SG&A scale benefits contributed. As the core business generating roughly 90% of consolidated operating profit, its profitability improvement drove group margins. The Manufacturing Staffing Services business posted Revenue ¥88.6B (+17.6%), Operating Income ¥3.5B (+38.0%), and operating margin 4.0% (up +0.6pt from 3.4%), achieving double-digit revenue growth and substantial profit growth. Recovery in manufacturing demand centered on food processing and improved utilization contributed, though margins remain lower than Administrative. Other (Automobile Management Business) had Revenue ¥2.5B (-10.9%), Operating Income ¥0.2B (-37.1%), and operating margin 9.5%; it is small and its contraction has limited impact. Segment concentration is high: Administrative accounts for 79.6% of revenue and about 91% of profit, making portfolio diversification a medium-term issue.
[Profitability] Operating margin 8.7% (up +2.0pt from 6.7%), gross profit margin 22.2% (up +1.9pt from 20.3%), and SG&A ratio 13.5% (improved -0.1pt) indicate notable profitability improvement and better fixed-cost absorption. ROE was 14.8%, equivalent to Net Profit Margin 5.3% × Total Asset Turnover 1.98 × Financial Leverage 1.41×, with the primary driver being improved profitability. [Cash Quality] Operating Cash Flow (OCF) was ¥25.5B, 1.08× of Net Income ¥23.7B, which is healthy, but the OCF/EBITDA ratio is 0.61× (=¥25.5B/¥42.2B) and relatively weak due to increases in accounts receivable (+¥20.3B +28.5%) and DSO 75 days (=¥91.5B ÷ ¥446.4B × 365 days) causing working capital absorption. [Investment Efficiency] Capital expenditures were ¥1.8B versus depreciation ¥2.7B, yielding a Capex/Depreciation ratio of 0.68×, indicating restrained investment. Intangible fixed assets were ¥0.6B (down -72.3% from ¥2.3B), reflecting impairment and curtailed new investment, suggesting a need for medium-term growth investment (IT/digitalization). [Financial Soundness] Equity Ratio was 71.2% (down from 74.2% prior year), current ratio 348.6%, and interest-bearing debt was ¥3.1B (short-term borrowings ¥0.4B, long-term borrowings ¥2.8B), maintaining a Net cash position. Debt/EBITDA was 0.07× and Interest Coverage was 716× (=Operating Income ¥39.0B / Interest Expense ¥0.1B × 2), indicating very strong ability to service interest. Cash and deposits were ¥113.2B (50.3% of total assets), indicating very high liquidity and no short-term payment concerns.
Operating Cash Flow was ¥25.5B (YoY -6.0%), representing a 67.1% conversion rate relative to profit before tax and extraordinary items ¥38.0B. The main causes were increases in accounts receivable ¥20.3B (driven by revenue growth and longer DSO) and increases in unpaid taxes ¥5.8B (tax burden increase due to higher profits), which absorbed working capital. Offsetting cash generation included depreciation ¥2.7B and increases in provisions ¥0.9B. After deducting corporate tax payments of ¥8.6B, the subtotal OCF was ¥33.9B. Investing Cash Flow was -¥2.8B, mainly capital expenditures -¥1.8B, acquisition of intangible fixed assets -¥0.1B, and acquisition of investment securities -¥0.03B. Financing Cash Flow was -¥16.8B, mainly dividend payments -¥14.3B, repayment of long-term borrowings -¥2.6B, and proceeds from long-term borrowings +¥1.0B. Free Cash Flow was ¥22.7B (= OCF ¥25.5B + Investing CF -¥2.8B), covering dividend payments of ¥14.3B by 1.6×, supporting high sustainability of shareholder returns from internal funds. Cash and deposits increased to ¥113.2B (from ¥107.2B at the beginning of the period, +¥6.0B), but the OCF/EBITDA ratio of 0.61× lags top peers, and strengthening accounts receivable collection is key to improving future cash generation.
Non-operating income was ¥0.3B (interest income ¥0.2B, dividend income ¥0.02B, other ¥0.03B), accounting for 0.06% of Revenue and thus negligible; most earnings are derived from core operations. Non-operating expenses were ¥0.1B (interest expense ¥0.1B, other ¥0.02B), so the divergence between Ordinary Income and Operating Income is limited. Extraordinary losses were only impairment losses ¥1.2B, so the decline from Ordinary Income ¥39.1B to income before taxes ¥38.0B was only ¥1.2B, indicating minimal one-off impact. Income taxes were ¥11.9B (effective tax rate 31.3%), which is the main reason for the gap between Ordinary Income and Net Income. The accrual ratio ((Net Income - OCF) / Total Assets) was -0.8%, very low, indicating Net Income is largely backed by cash. However, the OCF/EBITDA ratio 0.61× shows cash conversion lagging due to increased working capital (accounts receivable +¥20.3B), meaning cash generation has not fully followed profit improvement. Comprehensive income was ¥26.1B, which is ¥2.4B higher than Net Income ¥23.7B, mainly due to ¥0.1B improvement in valuation differences on other securities. Overall, earnings quality is driven by core operations and is good, but working capital management has room for improvement.
Full-year guidance calls for Revenue ¥491.0B (YoY +10.0%), Operating Income ¥41.0B (YoY +5.1%), Ordinary Income ¥41.1B (YoY +5.0%), and Net Income attributable to owners of the parent ¥28.1B. Progress against current results is 90.9% for Revenue, 95.1% for Operating Income, 95.2% for Ordinary Income, and 84.3% for Net Income, indicating upside potential on profit metrics. To meet the Operating Income plan, an additional ¥2.0B is needed, but achievement is likely given continued fixed-cost absorption. Revenue progress is somewhat sluggish, but the buildup of contract liabilities ¥1.6B (YoY +¥0.8B) supports short-term activity, underpinning a revenue-and-profit-up scenario for the following fiscal year. With rising BPO/contracting ratio and improved labor productivity, maintenance/improvement of operating margins in the high-8% range is expected, while lingering high labor and recruitment costs could pressure gross margin.
The year-end dividend is ¥120 per share, with total dividends of approximately ¥14.3B (= ¥120 × 11,875 thousand shares (average number of shares during the period)). Dividend payout ratio is disclosed at 77.9%, and the ratio of total returns to Net Income attributable to owners of the parent ¥23.7B is about 60.3%. Dividend payments ¥14.3B are 63.0% of Free Cash Flow ¥22.7B, enabling stable returns funded by internal cash. No share buybacks were conducted (Financing CF -¥0.0B), so shareholder returns consist solely of dividends. With cash and deposits ¥113.2B, a Net cash position, and low leverage (Debt/EBITDA 0.07×), there is ample room to balance future growth investments (IT/automation) and shareholder returns. The sustainability of the dividend policy is viewed as high, provided profit growth and stable cash generation continue.
Segment concentration risk: Administrative Staffing Services accounts for 79.6% of Revenue and about 91% of Operating Income, creating a structure where demand fluctuations in specific areas directly affect performance. As dependence on BPO and government contracts increases, diversification of the project portfolio is key to securing medium-term stability.
Working capital absorption risk: Accounts receivable increased +28.5% YoY, with DSO at 75 days and delayed cash conversion. OCF/EBITDA ratio 0.61× lags top peers, making normalization of receivables collection and optimization of invoicing cycles for contract work urgent. In an economic slowdown, delayed collection could materialize as credit costs.
Signal of underinvestment: Capex/Depreciation ratio 0.68× and intangible fixed assets down -72.3% indicate restrained investment. Delays in IT/digital investment could hamper medium- to long-term productivity improvements and competitiveness. In a phase of rising labor costs, combined with lagging price pass-through, margins could be squeezed.
Profitability & Returns
| Metric | Company | Median (IQR) | Delta |
|---|---|---|---|
| Operating Margin | 8.7% | 8.1% (3.6%–16.0%) | +0.6pt |
| Net Profit Margin | 5.3% | 5.8% (1.2%–11.6%) | -0.5pt |
Operating margin is +0.6pt above the industry median and in the upper group, while net profit margin is -0.5pt below. The main reason is the tax burden from the 31.3% effective tax rate.
Growth & Capital Efficiency
| Metric | Company | Median (IQR) | Delta |
|---|---|---|---|
| Revenue Growth Rate (YoY) | 10.5% | 10.1% (1.7%–20.2%) | +0.4pt |
Revenue growth rate is +0.4pt above the industry median, reflecting a stable growth trajectory.
※ Source: Company compilation
Continued qualitative improvement in profitability: Operating margin 8.7% (up +2.0pt), gross profit margin 22.2% (up +1.9pt), and ROE 14.8% rank among the top in the industry. The rise in BPO/contracting ratio and improved utilization are the main drivers, and continued accumulation of high-value-added projects should sustainably support margin improvement. Financial soundness is very high (Equity Ratio 71.2%, Net cash-based), expanding room to balance growth investment and shareholder returns.
Improving cash conversion is the key to the next growth stage: OCF/EBITDA 0.61× and DSO 75 days show notable working capital absorption, and cash has not fully followed profit improvements. Standardizing receivables collection and optimizing invoicing cycles for contract work would materially boost cash generation, directly enabling accelerated IT/digital investment and expanded shareholder returns. Capex/Depreciation ratio 0.68× indicates medium-term investment capacity and points to the need to expand productivity-enhancing investments to maintain competitiveness.
Monitor segment concentration and project mix: Administrative Staffing Services represents 79.6% of Revenue and about 91% of profit, and its high profitability is driving consolidated margins. However, high dependence on specific areas makes diversification of the project portfolio and improving profitability in the Manufacturing segment key to stable medium-term growth. The increase in contract liabilities +¥0.8B indicates a firm short-term order environment and supports the achievability of full-year guidance.
This report is an earnings analysis document automatically generated by AI based on XBRL financial statement data. It does not constitute a recommendation to invest in any particular security. Industry benchmarks are reference information compiled by the Company based on public financial statement data. Investment decisions are your own responsibility; consult a professional if necessary before making investment decisions.