TAKAYOSHI Holdings,INC. FY2025 Q4 Earnings Report

Financial Highlights

• Net Sales: ¥7.61B
• Operating Income: ¥905M
• Net Income: ¥540M
• EPS: ¥72.46

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

Takayoshi Holdings (92590) delivered stable top-line performance in FY2025 Q4 with revenue of ¥7,612.5 million, essentially flat year over year. Operating income was ¥905.0 million, down a marginal 0.2% YoY, indicating resilient core profitability despite cost pressures. Net income declined to ¥406.0 million, down 24.8% YoY, reflecting heavier burdens below operating profit, including non-operating items and taxes. Operating margin held at a solid 11.9%, while net margin stood at 5.33%, highlighting a sizeable gap between operating and bottom-line profitability this year. Gross profit was ¥7,286.4 million with a high reported gross margin of 95.7%, consistent with a service-heavy cost structure where expenses are recognized primarily in SG&A rather than cost of sales. EBITDA reached ¥1,171.1 million (15.4% margin), and interest coverage remained very strong at 52.3x, underscoring low financial risk from interest costs. The DuPont framework shows ROE of 12.53%, driven by a net margin of 5.33%, asset turnover of 1.258x, and financial leverage of 1.87x. Balance sheet strength appears sound: total assets were ¥6,051.0 million and total equity ¥3,241.0 million, implying an equity ratio around 53–54% and a debt-to-equity ratio of 1.51x. Liquidity was adequate with a current ratio of 129.1% and working capital of approximately ¥971.0 million, suggesting comfortable near-term coverage. Cash generation was robust, with operating cash flow of ¥730.0 million at 1.8x net income, and free cash flow of ¥455.0 million after ¥275.0 million of investing outflows. Financing cash flow was a sizable outflow of ¥1,797.0 million, consistent with deleveraging and/or equity-related activities; specific components were not disclosed here. The company reported EPS of ¥72.46, but share count and book value per share were not disclosed in these extracts, limiting per-share balance sheet analysis. No dividend was reported (DPS ¥0.00), leading to a zero payout ratio, and FCF coverage metrics of dividends are not applicable. Overall, the company exhibits resilient operating performance, strong interest coverage, and solid cash conversion, offset by a notable decline in net income driven by below-OP factors. With revenue flat and OP essentially unchanged, operating leverage appears negative this period, implying cost inflation and/or mix shifts. The outlook hinges on the company’s ability to improve below-the-line items and sustain OCF conversion amid flat growth.

Profitability Analysis

ROE of 12.53% decomposes into net profit margin of 5.33%, asset turnover of 1.258x, and financial leverage of 1.87x, indicating a balanced contribution from profitability and asset efficiency with moderate leverage. Operating margin was 11.9% (¥905.0m OP on ¥7,612.5m revenue), while ordinary margin was 11.8% (¥899.0m). The gap between operating and net margin (11.9% vs 5.33%) points to material non-operating charges and taxes. Gross margin was reported at 95.7% (¥7,286.4m GP), consistent with a model where most costs are below gross profit (SG&A-heavy). EBITDA margin of 15.4% reflects healthy underlying earnings capacity alongside moderate depreciation/amortization of ¥266.1m. Interest expense was modest at ¥17.3m, supporting an interest coverage ratio of 52.3x and underscoring low financing drag. Operating leverage was slightly negative this period: revenue was flat while operating income fell 0.2% YoY, suggesting SG&A growth outpaced sales or mix effects compressed operating profit. The year-on-year decline in net income (−24.8%) relative to the near-flat operating income signals pressure in non-operating items and/or taxes. Overall profitability quality is solid at the operating level, with the primary headwinds occurring below OP.

Growth Assessment

Revenue was flat at ¥7,612.5m, indicating limited near-term growth momentum. Operating income declined marginally (−0.2% YoY), suggesting that cost containment largely offset revenue stagnation but left little operating leverage. Net income fell 24.8% YoY to ¥406.0m, implying deterioration in non-operating and tax items that outweighed stable operating performance. Asset turnover at 1.258x indicates efficient use of the asset base to generate sales, though without top-line growth it did not translate into earnings expansion. EBITDA of ¥1,171.1m (15.4% margin) remains healthy, providing a base for reinvestment. The absence of revenue growth raises questions about demand drivers, pricing power, and store/service expansion cadence; sustainability will depend on execution in customer acquisition and mix. With investing outflows of ¥275.0m, the company appears to continue investing, but visibility into growth capex versus maintenance capex is limited in these extracts. Outlook hinges on reacceleration of sales and normalization of below-OP factors; if revenue growth resumes even modestly, operating leverage could improve results given the current cost base.

Financial Health

Total assets were ¥6,051.0m and total equity ¥3,241.0m, implying an equity ratio near 53.6% and financial leverage (A/E) of 1.87x, consistent with moderate balance sheet leverage. Total liabilities were ¥4,884.4m, yielding a debt-to-equity ratio of 1.51x. Liquidity appears adequate: current assets of ¥4,307.6m versus current liabilities of ¥3,336.6m produce a current ratio of 129.1% and working capital of about ¥971.0m. The quick ratio is reported equal to the current ratio due to undisclosed inventory data in these extracts. Interest expense is low (¥17.3m), and interest coverage is very strong at 52.3x, indicating low refinancing risk under current conditions. The sizeable financing cash outflow (−¥1,797.0m) suggests deleveraging or equity-related transactions, which, if debt reduction, would further support solvency. Overall, the company maintains a conservative capital structure with sufficient liquidity buffers.

Cash Flow Quality

Operating cash flow of ¥730.0m is 1.80x net income (¥406.0m), indicating strong earnings quality and robust cash conversion. Free cash flow was ¥455.0m after investing outflows of ¥275.0m, providing capacity for debt reduction, reinvestment, or future shareholder returns. EBITDA was ¥1,171.1m versus OCF of ¥730.0m, implying some working capital absorption or timing effects; detailed components (receivables, payables, inventories) were not disclosed here. Depreciation and amortization amounted to ¥266.1m, suggesting a reasonable non-cash cushion within operating profit. The strong interest coverage and positive FCF reinforce the quality of cash earnings. Without a breakdown of working capital, we cannot attribute OCF movements to specific line items; nevertheless, cash generation remains solid relative to reported earnings.

Dividend Sustainability

No dividend was reported for the period (DPS ¥0.00), resulting in a payout ratio of 0%. Given free cash flow of ¥455.0m and positive OCF, the balance sheet and cash generation could potentially support future distributions, subject to reinvestment needs and financing priorities. Financing cash outflows of ¥1,797.0m suggest a focus on balance sheet actions (e.g., debt repayment or equity-related activities) rather than cash returns in this period. With EPS at ¥72.46 and no DPS, coverage metrics are not applicable; policy signals are not evident in these extracts. Sustainability of future dividends would be underpinned by maintaining OCF > net income and stable working capital; visibility is limited without a stated payout policy.

Risk Assessment

Business Risks:

• Flat revenue indicates muted demand growth and potential market saturation or competitive pressure
• Negative operating leverage risk if SG&A inflation continues amid stagnant sales
• Profit mix sensitivity with a large gap between operating and net margins
• Execution risk around growth investments given limited disclosure on capex mix
• Potential exposure to consumer sentiment or discretionary spending if business is retail/service oriented

Financial Risks:

• Moderate leverage (debt-to-equity ~1.51x) though currently well-covered by earnings
• Large financing cash outflow this period reduces liquidity headroom if continued
• Sensitivity of bottom-line to non-operating items and taxes, which drove YoY net income decline
• Refinancing and interest rate risk remain low presently but could rise if leverage increases

Key Concerns:

• 24.8% YoY decline in net income despite stable operating profit
• Limited visibility on the composition of financing outflows and investing cash uses
• Flat top-line growth constraining operating leverage and ROE expansion

Investment Implications

Key Takeaways:

• Core operations are resilient: OP down only 0.2% YoY with 11.9% margin
• Bottom-line pressure was driven by below-OP factors; net margin at 5.33%
• Cash generation is strong: OCF ¥730m (1.8x net income), FCF ¥455m
• Balance sheet healthy with implied equity ratio ~54% and interest coverage 52.3x
• Revenue stagnation and negative operating leverage are the key near-term headwinds

Metrics to Watch:

• Revenue growth trajectory and same-store/like-for-like trends (if applicable)
• SG&A as a percentage of sales to gauge operating leverage
• Non-operating items and effective tax burden impacting the NI/OP gap
• Working capital movements (receivables and payables) and OCF/EBITDA conversion
• Capex breakdown (maintenance vs growth) and impact on FCF
• Net debt and financing cash flow direction (deleveraging vs new borrowings)

Relative Positioning: Within domestic service/retail-oriented peers, the company shows above-average interest coverage and solid FCF conversion but lags on growth momentum, with profitability quality strong at the operating level yet diluted at the net level by below-OP items.

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
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