Performance Trend 1. Overview of performance for FY3/2024 Consolidated performance for FY3/2024 of G-7 Holdings <7508> was 192,992 million yen in increased operating income of 9.1% over the previous year, and increased ordinary income of 7.4% to 7,318 million yen, and attributed to the parent company's net income of 5,175 million yen, an increase of 35.3% over the previous year. Sales were driven by the Business Supermarket Business and the Meat Business, and continued to set a new record high, exceeding the company's plan by 4.3%. However, in terms of profits, the automobile-related business was affected by a decrease in profits due to poor sales of winter tires due to a warm winter, and could not reach the company's plan, it turned to a profit increase for the second time due to the growth of other businesses centered on the Business Supermarket business. The sales cost ratio has increased by 0.8 points over the previous year due to changes in the sales composition ratio; however, the selling, general and administrative expense ratio decreased by 0.7 points due to the effect of increased earnings, and the operating margin decreased by 0.1 points to 3.6%. The main reasons for the increase/decrease of selling, general and administrative expenses were a decrease of 600 million yen in energy costs due to subsidies from rising electricity prices, and an increase of 1 billion yen in labor costs due to improvements in employee treatment and increased education costs. In addition to this, depreciation expenses increased by nearly 600 million yen due to rising construction material costs and rising costs of opening stores etc. The EBITDA margin has increased by 0.1 points from the previous year. Also, the reason for the large increase in the net income of the parent company's shareholders attributable to the current period is due to the elimination of 500 million yen in retirement benefits paid to executives that were recorded as special losses in the previous year, a decrease of 455 million yen in impairment losses, and a gain of 127 million yen on the sale of investment securities in FY3/2024.
Overview of consolidated performance for fiscal year ending March 2024.
ODK Solutions <3839> consolidated performance for the fiscal year ending March 2024: Operating revenue was ¥5,867 million, up 5.4% compared to the fiscal year ending March 2023. Operating profit increased by 36.1% to ¥572 million, ordinary profit grew by 34.4% to ¥604 million, and net income attributable to the parent company's shareholders rose by 12.8% to ¥266 million. All businesses increased revenue and progressed smoothly, and the overall profit increase was significant. Despite the increase in research and development expenses related to the social implementation of next-generation services, an agreement was reached with existing customers on pricing rationalization negotiations for educational services, there was a decrease in retirement benefit expenses, and these factors contributed to costs. Additionally, due to a conservative estimate of changes in the environment surrounding university entrance examinations, a special loss was recognized for impairment loss of the AI-based evaluation system, resulting in an increase of ¥143 million in impairment loss (¥50 million recognized in the previous fiscal year and ¥193 million recognized in the current fiscal year).
Sales by business division: Educational business (¥3,671 million, up 5.5% YoY) increased due to receiving BPO entrustment for the entrance exams of major private universities in Kanto and partly realizing price rationalization negotiations with existing customers. Securities and houfuri business (¥1,106 million, up 5.4% YoY) increased mainly due to increased sales of "WITH-X(R)" related to the securities industry and increased demand due to system revisions such as the new NISA. General business (¥738 million, up 3.4% YoY) completed the delivery of medical use tablets, but the increase in development needs for clinical examination systems covered this. Other business (¥351 million, up 8.3% YoY) was led by the increase in sales of Potus' "Career Port". The breakdown of sales by business is system operation: ¥5,539 million, system development and maintenance: ¥268 million, and machinery sales: ¥59 million.
Breakdown of the ¥148 million increase in operating expenses: Payment fees increased ¥49 million mainly due to increased sales in the education business, machinery rental fees increased ¥15 million, labor costs increased ¥54 million mainly due to increased depreciation due to improvements in the UCARO(R) function, and sales management costs increased ¥30 million mainly due to an increase in research and development expenses related to "Updemy(R)".
Financial situation:
Total assets at the end of the fiscal year ending March 2024 increased by ¥156 million compared to the end of the fiscal year ending March 2023, to ¥8,694 million. Software temporary accounts decreased by ¥87 million, while accounts receivable increased by ¥238 million. Total liabilities decreased by ¥101 million to ¥2,639 million. Unpaid corporate taxes increased by ¥64 million, and unpaid consumption taxes increased by ¥59 million, but interest-bearing liabilities (short- and long-term borrowings) decreased by ¥316 million. Net assets increased by ¥257 million to ¥6,055 million. Retained earnings increased by ¥185 million, and the difference in evaluation of other securities increased by ¥72 million. As a result, the self-capital ratio rose by 1.7 points to 69.6%. The self-capital ratio is at a high level, and there are no concerns about the cash flow situation, so we evaluate the financial soundness of the company as good.
(Authored by FISCO guest analyst Masanobu Mizuta)