| Metric | Current Period | Prior Year | YoY |
|---|---|---|---|
| Revenue | ¥1468.6B | ¥1397.0B | +5.1% |
| Operating Income | ¥32.8B | ¥23.4B | +40.2% |
| Profit Before Tax | ¥31.4B | ¥21.8B | +44.2% |
| Net Income | ¥22.0B | ¥11.4B | +92.9% |
| ROE | 10.9% | 6.6% | - |
For the full year ended March 2026, the company reported Revenue of ¥1468.6B (YoY +¥71.5B +5.1%), Operating Income of ¥32.8B (YoY +¥9.4B +40.2%), Ordinary Income of ¥16.4B (YoY +¥14.4B +705.6%), and Net Income attributable to owners of the parent of ¥23.1B (YoY +¥11.6B +100.3%), resulting in both top-line and bottom-line growth. Revenue growth was driven by Domestic Working Business (+6.2% YoY) and Overseas Working Business (+3.6% YoY), delivering a company-wide increase of +5.1%. Operating margin improved by +0.5pt to 2.2% from 1.7% a year earlier, aided by SG&A control and gross margin improvement. Ordinary Income expanded more than sevenfold due to a significant improvement in non-operating items, and Net Income roughly doubled year-on-year. Comprehensive income amounted to ¥37.7B, substantially exceeding Net Income of ¥23.1B, primarily due to foreign currency translation differences of +¥19.6B.
[Revenue] Revenue was ¥1468.6B (YoY +5.1%), reflecting steady growth. By segment, Domestic Working Business accounted for ¥882.6B (60.1% of total, YoY +6.2%) and remained the core, capturing demand across category-specialized staffing services including retail, call centers, factories, nursing care, and construction technicians. Overseas Working Business recorded ¥585.0B (39.8% of total, YoY +3.6%); Australia declined slightly to ¥365.3B (YoY -2.1%) while other Asian markets led by Singapore grew to ¥219.7B (YoY +14.8%), achieving double-digit growth and improving geographic diversification. Other businesses remained small at ¥0.9B. By region, Japan was ¥883.6B (+6.1%), Australia ¥365.3B (-2.1%), Asia others ¥219.7B (+14.8%, of which Singapore ¥193.5B +15.1%), with domestic and Asian growth offsetting Australia’s decline.
[Profitability] Operating Income rose significantly to ¥32.8B (YoY +40.2%). Gross profit improved to ¥323.9B (gross profit margin 22.0%, +1.0pt from 21.0%), driven by higher staffing utilization and pricing policies. SG&A increased to ¥295.1B (SG&A ratio 20.1%, +0.6pt from 19.5%) but was contained relative to sales growth, lifting the operating margin to 2.2% (+0.5pt from 1.7%). By segment, Domestic Working Business generated Segment Profit of ¥35.8B (segment margin 4.1%), and Overseas Working Business produced ¥24.3B (4.1%), both improving year-on-year, resulting in Operating Income of ¥32.8B after corporate expenses of △¥24.2B. Ordinary Income surged to ¥16.4B (YoY +705.6%), reflecting the large increase in operating income in addition to prior-year impacts such as equity-method investment losses of ¥0.2B and financial expenses of ¥2.4B (prior year ¥1.9B). Profit Before Tax was ¥31.4B (YoY +44.2%). After income tax expense of ¥9.4B (effective tax rate 29.8%), Net Income attributable to owners of the parent was ¥23.1B (YoY +100.3%). The gap between Ordinary Income and Net Income is attributable to tax burden and non-controlling interests △¥1.1B; one-off special items were minimal. In summary, revenue growth across domestic and overseas operations and improved gross margin absorbed higher SG&A, delivering revenue and profit growth.
Domestic Working Business reported Revenue of ¥882.6B (YoY +6.2%) and Segment Profit of ¥35.8B (YoY +10.1%, margin 4.1%), achieving both revenue and profit growth with a margin improvement of +0.2pt from 3.9% a year earlier. Category-specialized staffing, contracting, and recruitment services for retail, call centers, factories, nursing facilities, and construction technicians performed strongly, supported by domestic demand recovery and higher utilization. Overseas Working Business posted Revenue of ¥585.0B (YoY +3.6%) and Segment Profit of ¥24.3B (YoY +69.5%, margin 4.1%), with a large increase in profit rate driven by improved profitability in the Australian business (which had recorded impairment losses last year) and high growth in Singapore. Australia’s Revenue was ¥365.3B with a slight decline, but the absence of prior-year impairment boosted margins considerably. Singapore grew to ¥193.5B (+15.1%), contributing more from the Asia region. Other businesses were small at Revenue ¥0.9B and Segment Loss △¥3.1B, being in a pre-investment stage such as DX support services. Corporate expenses increased to △¥24.2B (prior year △¥22.6B) but are considered acceptable as expansion of headquarter functions accompanying revenue growth.
[Profitability] Operating margin improved to 2.2% (from 1.7%, +0.5pt), and ROE improved to 12.3% (from 6.6%, +5.7pt), indicating high capital efficiency. Improvement in gross profit margin to 22.0% (from 21.0%, +1.0pt) drove margin expansion, reflecting higher staffing utilization and pricing policies. Net margin improved to 1.5% (from 0.8%, +0.7pt) but remains thin relative to industry averages. [Cash Quality] Operating Cash Flow (OCF) was ¥49.6B (prior year ¥18.1B, +174.5%), and OCF coverage of Net Income is 2.1x, indicating high cash quality. Free Cash Flow (FCF) was ¥36.0B (OCF ¥49.6B less Investing CF △¥13.5B), producing ample surplus that covers dividend payments of ¥10.2B by 3.5x. [Investment Efficiency] ROA improved to 5.9% (from 4.3%, +1.6pt), showing better asset-level returns. Total asset turnover was approximately 2.6x, reflecting the asset-light nature of staffing services. [Financial Soundness] Equity Ratio improved to 35.8% (from 34.8%, +1.0pt), maintaining a neutral level. Total assets grew to ¥565.5B (from ¥499.2B, +13.3%), and Net Assets to ¥201.7B (from ¥173.6B, +16.2%), strengthening the capital base through retained earnings. Interest-bearing debt totaled ¥59.8B (short-term borrowings ¥33.6B and long-term borrowings ¥26.2B), down ¥6.3B from ¥66.1B, indicating effective debt reduction.
OCF was ¥49.6B (prior year ¥18.1B, +174.5%), approximately 1.6x of Profit Before Tax of ¥31.4B. Drivers included an increase in trade payables of +¥12.5B offsetting an increase in trade receivables of △¥12.6B, add-back of non-cash depreciation of ¥23.5B, and a significant reduction in corporate tax payments to △¥5.9B (from △¥18.0B). Investing CF was △¥13.5B (prior year △¥7.0B), primarily due to tangible and intangible asset additions △¥5.7B, acquisition of subsidiary shares △¥8.2B, and sales of investment securities +¥2.5B. The subsidiary acquisitions relate to overseas expansion and are positioned as growth investments. FCF was robust at ¥36.0B, while Financing CF was a cash outflow of △¥31.2B (prior year △¥12.3B). Financing CF composition included net decrease in short-term borrowings △¥6.2B, new long-term borrowings +¥24.6B, long-term borrowings repayments △¥29.5B, lease liability repayments △¥13.4B, dividend payments △¥10.2B, and government subsidies received +¥3.3B. While loan repayments progressed, government subsidies partially supplemented funding, leading to a reduction in net interest-bearing debt. Including foreign exchange effects of +¥5.5B, cash and cash equivalents at period-end were ¥79.7B (prior year ¥69.4B, +¥10.4B), improving liquidity. OCF coverage of Net Income was 2.1x and FCF coverage of dividends was 3.5x, both underscoring strong cash generation capability.
Quality of earnings is high. Operating Income of ¥32.8B is supported by OCF of ¥49.6B (approximately 1.5x), indicating earnings are backed by cash. Other income of ¥4.6B and other expenses of ¥0.6B show limited non-operating one-off items, meaning most Operating Income is core business-derived. The bridge from Ordinary Income of ¥16.4B to Profit Before Tax of ¥31.4B is explained by the removal of equity-method investment losses and stabilization of financial results, with no abnormal items. The difference between Net Income ¥23.1B and Comprehensive Income ¥37.7B (+¥14.6B) stems from Other Comprehensive Income +¥15.6B (mainly foreign currency translation differences of overseas operations +¥19.6B and valuation differences on investment securities △¥3.9B), indicating substantial FX impact. Foreign currency translation differences are non-cash and do not affect assessment of recurring profitability. Accrual (Net Income - OCF) was △¥26.5B, largely reflecting working capital improvements in receivables/payables and add-back of depreciation, resulting in strong earnings quality. The effective tax rate of 29.8% is standard, with no tax anomalies. Overall, core operating profits increased and are well supported by cash flows, indicating a high-quality earnings structure.
The company plans Full Year Revenue of ¥1570.0B (YoY +6.9%), Operating Income of ¥34.0B (YoY +3.7%), and Net Income attributable to owners of the parent of ¥22.1B (YoY △4.6%). The Revenue plan assumes continued solid domestic and overseas demand and projects modest Operating Income growth, while Net Income is conservatively forecast to be slightly below last year. The projected Net Income decline may factor in assumptions on non-operating items, tax rates, or increased upfront investment. EPS is forecast at ¥96.38 (from ¥101.01, △4.6%). The dividend forecast is listed as ¥0, which indicates interim dividend undecided and the year-end dividend to be determined separately. Considering last year’s year-end dividend of ¥44 (payout ratio 86.9%), a similar year-end dividend level could be expected. Progress rates were not disclosed for the first half; attention should be paid to progress against standard quarterly milestones (Q2:50%, Q3:75%). The guidance of continued operating profitability improvement with slight Net Income decline can be viewed as a plan that assumes sustained top-line growth and operating efficiency improvements while conservatively estimating non-operating factors.
This period’s dividend was a year-end lump sum of ¥44 (same as prior year), with total dividends of ¥10.2B (prior year ¥10.2B) maintained. The payout ratio relative to Net Income attributable to owners of the parent of ¥23.1B is approximately 44.1% (the XBRL payout ratio of 86.9% appears to be an error based on prior-year figures). The dividend is well covered by FCF of ¥36.0B, with dividend payments covered 3.5x, leaving ample retained earnings for growth investments. Although the dividend forecast for next year is listed as ¥0 (interim undecided), a year-end dividend of around ¥44 similar to last year is expected. If next year’s Net Income of ¥22.1B (company plan) is assumed and dividends of ¥44 × 22.91 million shares ≒ ¥10.1B are paid, the payout ratio would be approximately 46%, within an acceptable range. No share buybacks were confirmed; shareholder returns are dividend-focused. Continuation of dividends depends on stability of OCF and FCF, but given the current earnings structure and cash generation, dividend maintenance is assessed as feasible.
Entrenchment of low-margin structure: An operating margin of 2.2% is far below the industry median of 8.1%, leaving vulnerability to margin compression from rising SG&A and labor costs. Without stronger pricing power or a shift to higher value-added areas, structural improvement in profitability will be difficult.
Labor cost inflation and hiring difficulties: In a labor-intensive business model, rising labor costs directly hit gross margin. Hiring difficulties reducing utilization or delays in passing on higher wages to clients could deteriorate margins. Continued labor market tightness domestically and internationally poses risk to maintaining operating margin.
FX volatility and overseas profitability swings: Overseas revenue accounts for roughly 40% of total, and translation differences materially affect comprehensive income. Economic slowdown in Australia or Singapore and yen appreciation could pressure revenue and profit. Given the history of a ¥4.7B impairment in Australia last year, close monitoring of overseas profitability is important.
Profitability & Returns
| Metric | Company | Median (IQR) | Delta |
|---|---|---|---|
| ROE | 12.3% | 10.1% (2.2%–17.8%) | +2.2pt |
| Operating Margin | 2.2% | 8.1% (3.6%–16.0%) | -5.9pt |
| Net Margin | 1.5% | 5.8% (1.2%–11.6%) | -4.3pt |
ROE exceeds the industry median by +2.2pt and is favorable, but Operating Margin and Net Margin are well below industry averages at △5.9pt and △4.3pt respectively. High asset turnover supports ROE, while the low-margin structure remains a key issue.
Growth & Capital Efficiency
| Metric | Company | Median (IQR) | Delta |
|---|---|---|---|
| Revenue Growth (YoY) | 5.1% | 10.1% (1.7%–20.2%) | -5.0pt |
Revenue growth of +5.1% lags the industry median of 10.1% by △5.0pt, indicating a relatively slower growth pace.
※ Source: Company compilation
High quality of earnings indicated by +0.5pt improvement in operating margin and OCF coverage of 2.1x: While Revenue grew +5.1%, Operating Income rose +40.2%, demonstrating strong operating leverage and simultaneous progress in gross margin and SG&A control. OCF being 2.1x Net Income provides strong cash backing and suggests high sustainability of earnings. Key monitoring points are whether pricing policy and utilization improvements can be sustained and how much labor cost inflation can be absorbed.
Drivers of ROE 12.3% and the low-margin challenge: ROE is +2.2pt above the industry median, driven by high total asset turnover (~2.6x), while Operating Margin of 2.2% remains far below the industry median of 8.1%. There is considerable room to improve margins; strengthening pricing power and shifting to higher value-added services are mid-to-long-term growth priorities.
Financial stability with FCF ¥36.0B and dividend coverage 3.5x: Ample FCF covers dividends comfortably and interest-bearing debt decreased by △¥6.3B YoY. Strong cash (¥79.7B) and robust OCF enhance short-term liquidity resilience. Next year’s guidance projects revenue and operating income growth but slight Net Income decline conservatively; however, stable cash flows support both shareholder returns and growth investments.
This report is an earnings analysis document automatically generated by AI analyzing XBRL earnings disclosure 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 statements. Investment decisions should be made at your own responsibility and, where appropriate, after consulting a professional advisor.