Summary: RIZAP Group<2928>The comprehensive enterprise, which is committed to proving that "people can change" as its unique management philosophy, develops a variety of businesses in the three areas of health creation, health care / beauty, lifestyle, and investment. Under the vision of "Global No.1 in the self-investment industry", it has achieved remarkable growth by actively utilizing M&A under the holding company structure and has grown to include 68 group companies, including 5 listed subsidiaries, and 4,606 consolidated employees. Listed on the Sapporo Stock Exchange's Ambitious Market in 2006, it formulated a medium-term management plan in September 2022, but revised it in February 2024 to achieve an operating profit of ¥400 million (fiscal year ending March 2027) by aggressively expanding the new business "chocoZAP". The fiscal 2024 performance was sales revenue of ¥16,629.8 million (+7.6% YoY), operating loss of ¥594 million (compared to a loss of ¥4948 million in the same period of the previous year), pre-tax loss of ¥4524 million (compared to a loss of ¥7,031 million in the same period of the previous year), and net loss attributable to the owners of the parent of ¥4,300 million (compared to a loss of ¥12,673 million in the same period of the previous year). Due to the black ink conversion of the chocoZAP business, it achieved a black ink of ¥417.5 million on an operating profit basis in the fourth quarter alone. As for sales revenue, the RIZAP-related business (including the chocoZAP business) significantly increased its revenue (+¥201 million) by focusing on expanding the convenience gym "chocoZAP". In existing businesses, there was an increase in revenue, including Antiroza Co., Ltd. (+¥419.8 million), while there was a decrease in revenue due to store structure reform in REXT Co., Ltd., etc. (-¥599.8 million) and the impact of selling the Sikata business under the subsidiary BRUNO<3140>at the end of the previous year (-¥511.1 million). As for operating loss, the group as a whole improved due to the transition of the chocoZAP business to the investment recovery period and the success of business portfolio reform such as REXT.
Papahatsu<9388> operates as a "consultant company" for real estate management companies, monthly apartment management companies, house manufacturers, real estate distribution companies, etc., mainly in large metropolitan areas, providing support services. The breakdown of support services includes "management company support business" which conducts regular inspections of the managed properties of clients, "interior total support business" that deploys its own distribution network to transport, unpack, assemble and set up large commercial products such as furniture and household appliances in two-person teams, and "other" businesses such as real estate rental and container storage rental. Due to the lowering of the caution level of the spread of Covid-19 and the subsequent normalization of societal activities, the main business, the "management company support business," has been smoothly expanding and is on a trajectory of growth. In the February 2024 fiscal year, the factors that contributed to the good performance were the "regular building patrol service" and the "monthly apartment support service."
1. Overview of performance for the fiscal year ending February 2024
In the February 2024 fiscal year, sales revenue increased by 12.1% from the previous year to 449.1 million yen, operating profit increased by 14.9% to 33.7 million yen, ordinary profit increased by 16.2% to 341 million yen, and net income increased by 16.2% to 235 million yen. The number of buildings patrolled in the "management company support business" has increased. Also, due to corporate travel resuming, the number of commissions for the set-up and post-eviction cleaning of furniture and household appliances increased for both existing and new clients in the "monthly apartment support service." The"interior total support business" has not yet returned to the levels of demand prior to the Covid-19 pandemic.
Performance Outlook for Fiscal Year Ending February 2025.
In the February 2025 fiscal year, sales revenue is expected to increase by 11.4% from the previous year to 500.4 million yen, operating profit is expected to increase by 5.4% to 35.5 million yen, ordinary profit is expected to decrease by 3.2% to 330 million yen, and net income is expected to decrease by 8.5% to 215 million yen. In the "management company support business," the company aims to gain more clients by combining the efficient utilization of DX and practicality while advancing personnel training and hiring. Especially in the "monthly apartment support service," it is expected that the number of commissions for set-up and post-eviction cleaning will increase due to the expected increase in foreign tourists. The "interior total support business" is expected to gradually recover as the Covid-19 situation improves, and the company plans to grow its business by developing new services.
The company places the highest value on "human resources" because it believes that they are the most important management resource and considers education to be a shared effort that is expressed as "mutual growth." This represents an attitude in which the company and employees learn together rather than imposing education on employees.
3. Growth Strategy
Papahatsu aims to expand its revenue base for the mainstay "management company support business" and increase sales revenue and operating profit while providing services to a wide range of customers without being confined to business areas. Therefore, the company is tackling challenges such as "securing and nurturing human resources," "improving existing services," and "developing new markets." The management indicators for the medium-term business plan remain unchanged, and the company expects sales revenue of 550 million yen and operating profit of 400 million yen in the February 2026 fiscal year.
■Key Points
The February 2024 fiscal year has seen steady expansion and increased revenue and profit.
In the February 2025 fiscal year, the demand for the "management company support business" is expected to continue expanding, and the "interior total support business" is expected to gradually recover.
The management indicators for the medium-term business plan remain unchanged, and the company expects sales revenue of 550 million yen and operating profit of 400 million yen in the February 2026 fiscal year.
(Reported by FISCO guest analyst Hiroshi Nakayama)