Performance trend of Soft 99 Corporation <4464>
(3) Service business
Sales of service business increased by 1.1% YoY to 551.6 million yen while operating profit decreased by 19.2% YoY to 18.3 million yen. The decrease in profit was due to changes in the sales composition ratio and recording of losses from inventory disposal in the household goods planning and sales business, resulting in a decline in gross profit margin from 24.8% to 23.5% YoY. In terms of sales trends by business, the automobile maintenance and panel beating business reached a record high of 269.8 million yen, a 7.4% YoY increase and the highest in five years. Despite a slight decrease in the number of cars repaired, stable supply of parts for repairs and smooth progress in the release of damaged cars, coupled with the raise of hourly labor cost for imported cars by 1.3 times in October 2023, led to an increase in revenue. Services for car decoration also showed a strong performance, with construction and sales of protection films thriving due to recovery in new car sales. The automobile driving school business increased by 0.7% YoY to 102.1 million yen, as demand for vocational licenses and corporate training increased. Sales in the household goods planning and sales business declined by 6.9% YoY to 179.6 million yen, due to the continued backlash of Corona's special demand.
(4) Real estate-related business Sales of real estate-related business increased by 8.4% YoY to 154.2 million yen, while operating profit increased by 49.2% YoY to 37.5 million yen, continuing to see an increase in revenue and profit. Sales reached the highest in 8 years and operating profit reached the highest in 11 years. The improvement in operating rates for stores in the hot bath business due to the end of Corona was a factor contributing to increase in revenue and profit. In terms of sales trends by business, hot bath business saw its third consecutive quarterly increase, with an increase of 12.6% YoY. The increase in the number of visitors due to the resumption of various promotional events, coupled with an increase in food and beverage sales, contributed to the increase in revenue per person. The real estate rental business decreased by 0.7% YoY due to the cancellation of some office leases of the owned properties. The preventive care support business saw a slight increase in revenue by 1.1% YoY due to an increase in the number of users with the end of Corona.
(4) Real estate related businesses.
In the real estate related business, the revenue was 1,542 million yen, an 8.4% increase from the previous period, and operating profit was 375 million yen, a 49.2% increase from the previous period, continued to increase sales and profits, and revenue was the highest in 8 periods and operating income was the highest in 11 periods. As the COVID-19 crisis subsided, the operational rate of stores in the hot spring business improved, which became a factor in increasing sales and profits.
In terms of sales trends by business, the hot spring business increased 12.6% compared to the previous period, and has been growing for three consecutive periods. In addition to the increase in visitors due to the resumption of various customer attraction events, the increase in food and beverage use has also become a factor in sales growth by increasing sales per unit. In addition, the real estate rental business decreased by 0.7% due to the occurrence of some office vacancies in the owned properties. The care prevention support business also had a slight increase in revenue by 1.1% due to the increase in the number of users with the end of the COVID-19 crisis.
(Written by FISCO guest analyst, Jo Sato)