■Financial Results Trends

1. Past performance trends

Looking back on the performance before the COVID-19 pandemic (until the fiscal year ending 2020/2), the expansion in the number of stores has driven the growth of SFP Holdings ＜3198＞. In particular, after the 2010/9 fiscal year, when the opening of “Isomaru Fisheries” stores based on a unique profit model was in full swing, growth in business performance accelerated, and ordinary profit margins also improved significantly as sales expanded. When the ordinary profit margin for the 2013/9 fiscal year exceeded the target of 8%, it rose to 11.7% in the 2015/9 fiscal year, and has maintained a high level since then. Meanwhile, the reason why business performance growth moderated from the 2018/2 fiscal year to the 2019/2 fiscal year is that after strategically suppressing new store openings in anticipation of response to environmental changes and sustainable growth in the future, that amount of investment capacity and management resources was diverted to strengthening existing stores and developing new business categories. The number of stores and business results expanded in the 2020/2 fiscal year due to the start of our own “alliance concept,” but after the 2021/2 fiscal year, sales declined drastically due to the effects of the COVID-19 pandemic, and efforts have also been made to close unprofitable stores. Business performance followed a recovery trend with the end of the COVID-19 pandemic, and current business performance has returned to the level before the COVID-19 pandemic.

On the financial side, the capital adequacy ratio at the end of the 2015/9 fiscal year rose to 76.8% due to a public offering (approximately 12.7 billion yen) associated with the new listing on the 2nd section of the Tokyo Stock Exchange in 2014/12, and has remained at a level of approximately 70% since then. In the fiscal year ending 2021/2, net loss was recorded due to the effects of the COVID-19 pandemic, and although the equity ratio temporarily declined due to the implementation of working capital loans (approximately 9 billion yen), it recovered to 77.3% at the end of the 2022/2 fiscal year to the level before the COVID-19 pandemic. In the 2024/2 fiscal year, the capital adequacy ratio declined to 58.2% due to the acquisition of treasury shares for the purpose of conforming to listing maintenance standards (tradable share ratio), etc., but capital efficiency (ROE) has improved drastically to 17.1%, and the financial balance can be evaluated as being extremely excellent.

(Written by FISCO Visiting Analyst Ikuo Shibata)