■Performance Trends
1. Summary of financial results for the fiscal year ending 2024/2
Reso Education's consolidated financial results for the fiscal year ended 2024/2 showed an increase in sales of 32,215 million yen, up 2.3% from the previous fiscal year; 2,586 million yen, up 7.7% in operating income; 2,614 million yen, up 7.0% in ordinary income; and 1,703 million yen, up 14.1% in net income attributable to parent company shareholders. Sales increased for 3 consecutive terms and hit record highs, and each profit also turned to an increase for the first time in 2 fiscal years.
As for sales, an increase in the cram school business, in-school tutoring business, and personality and emotional training camp education business was a factor in the increase in sales. The number of group students at the end of the 2024/2 semester decreased slightly to 26,677, down 1.7% from the end of the previous semester, but in addition to implementing tuition fee increases of 5 to 7% from 2023/3 at “TOMAS” and “Meimonkai,” they were also absorbed by implementing tuition price increases of 20% at summer seminars and 17% from 2023/11.
The cost of sales ratio rose 0.6 points from the previous fiscal year to 73.6%. Although the increase in labor costs due to improved treatment for lecturers was absorbed by an increase in tuition fees, an increase in capital investment costs such as new school openings and expansions became an upward factor. Gross profit remained flat compared to the previous fiscal year due to an increase in the cost ratio, but the fact that SG&A expenses decreased by 176 million yen due to a strategic review of expenses centered on advertising expenses became a factor in the increase in operating profit. In terms of operating income by business segment, although profit declined in the cram school business and the early childhood education business, it was covered by an increase in profit from the tutor dispatch education business and the in-school tutoring business. Furthermore, part of the advisory costs etc. in connection with the Hulic tender offer was recorded as an extraordinary loss of 53 million yen.
Both sales and profits fell short of the initial company plan, but the main reason is that the number of students at “TOMAS,” “Meimonkai,” and “Shinmekai” fell below the plan. The initial plan anticipated a slight increase in the number of students in the entire group compared to the end of the previous semester.
(Author: FISCO Visiting Analyst Joe Sato)