Performance Trends of Interspace <2122>

3. Financial Condition and Management Indicators

Total assets at the end of the second quarter of fiscal year September 2024 increased by ¥ 645 million compared to the end of the previous period to ¥ 11,739 million. Looking at the main factors of increase and decrease, in current assets, cash and deposits increased by ¥ 97 million, while accounts receivable and contract assets increased by ¥ 540 million, respectively. In fixed assets, tangible fixed assets increased by ¥ 8 million, intangible fixed assets increased by ¥ 12 million, and investment and other assets increased by ¥ 28 million, respectively. Of the increase in intangible fixed assets, goodwill decreased by ¥ 114 million from an increase of ¥ 14 million.

Total liabilities increased by ¥ 562 million from the end of the previous period to ¥ 5,876 million. This was due to an increase in trade payables of ¥ 381 million and unpaid corporate taxes of ¥ 116 million in current liabilities. In addition, total net assets increased by ¥ 82 million to ¥ 5,863 million. This was due to the recording of quarterly net profit of ¥ 250 million primarily attributable to the parent company's shareholders and an increase of ¥ 93 million in retained earnings due to a dividend of ¥ 156 million.

Looking at management indicators, although the return on equity has slightly decreased from 52.1% at the end of the previous period to 49.9%, the financial soundness is considered high because it is debt-free and the cash on hand is abundant at ¥ 5.7 billion given the scale of the business. As for the use of accumulated cash, we intend to use it for investment in growth businesses, including M&A, and for return to shareholders. As for M&A, we are considering companies or businesses in the media business that can expect synergies, and companies or businesses in the performance marketing business that can expect cross-selling.

(Written by FISCO guest analyst, Jo Sato)