Shareholder return strategy: No. 1<3562> changed its shareholder return policy along with the publication of the new mid-term management plan "Evolution 2027" and showed the direction of significantly strengthening shareholder return. So far, we have aimed for stable dividends (30% dividend payout ratio as a guide), but in the future, we plan to implement stable and continuous shareholder dividends based on a policy of aiming for a 30% dividend payout ratio, regardless of changes in annual performance. A notable feature is that we have set a minimum dividend of the previous year's annual dividend per share and will continue to increase dividends, which is a significant enhancement of shareholder return and can also be evaluated as a expression of confidence in profit growth. Moreover, we have a policy of "flexibly implementing under financial discipline" for acquiring our own shares, showing a more proactive stance.* *Considering the gap between our own perception of the stock price and the market evaluation, ROE, capital efficiency, and CF level, we have a policy of implementing it flexibly. Dividends for the fiscal year ending February 2024 will increase by 1 yen from the previous year, as expected at the beginning of the period, to 33 yen per share (mid-term dividend of 16.5 yen and year-end dividend of 16.5 yen). We also acquired 340,000 shares of our own stock (with a purchase price of 397 million yen). Despite the anticipated decline in profits for the fiscal year ending February 2025, we are expected to follow the policy of increasing dividends every period and issue a dividend of 1 yen per share (a commemorative dividend for the 35th anniversary of our founding), with an expected increase of 2 yen from the previous year to 35 yen per share (mid-term dividend of 17.5 yen and year-end dividend of 17.5 yen).
One of the important management issues that Needs Well <3992> positions is profit redistribution, and the basic policy is to continue to provide stable dividends while securing necessary internal reserves for future business development and strengthening the management structure. In March 2024, the company revised its dividend estimate (increased) and decided to raise the dividend payout ratio from the previous 30% to 35% as part of its efforts to strengthen its commitment to returning profits to shareholders in April 2024. This measure reflects the company's confidence in its financial soundness and growth, and aims to enhance shareholder value.
In addition, the company is also focusing on improving employee welfare and satisfaction, and has allocated restricted stock compensation with transfer restrictions to 521 employees free of charge. In addition, in April 2024, regular salary increases were implemented with an average increase rate of 3.6% and a maximum increase rate of 25%, and the starting salary for new employees in fiscal year 2024 was also raised. These personnel measures are aimed at enhancing employee motivation and loyalty to the company.
Furthermore, the company has decided to implement a stock split at the extraordinary board of directors meeting held on May 13, 2024. The purpose of this stock split is to achieve a price that is more affordable for a wider range of investors by lowering the amount per investment unit. It is expected to increase the liquidity of the company's shares, increase trading volume, and expand the investor base. Specifically, it is planned to split the common stock held at a ratio of 2 shares per each share owned based on the final shareholder register recorded on May 31, 2024, the record date. Concerning dividends, the new estimated dividends, taking into account the stock split, were revised to 9 yen (18 yen before the split) for each period at the end of and annual periods. The expected dividend payout ratio is calculated to be 35.1%. This series of measures will contribute to strengthening the company's market competitiveness and enhancing shareholder value, and can be said to contribute to long-term corporate growth.
(Reported by FISCO guest analyst Hiroshi Nakayama)