■Future prospects for Bridge International ＜7039＞

● Earnings Forecast for the Fiscal Year Ending December 2024

The financial results for the fiscal year ending 2024/12 are expected to increase in sales of 8,842 million yen (up 26.0% from the previous fiscal year), operating income of 947 million yen (up 3.7% from the same period), ordinary income of 947 million yen (up 3.4% from the same period), and net income attributable to parent company shareholders of 616 million yen (down 4.2% from the same period), but final profit is expected to decline in the previous fiscal year due to an increase due to the application of the “human resource securing promotion tax system.” As for sales, there is also a sales channel expansion effect through M&A based on the C&S business expansion strategy, and we expect a 26.0% increase from the previous fiscal year and 2-digit growth. I get the impression that the profit side is weak compared to the sales increase forecast, but it is expected that the operating profit margin will still be secured in the 10% range due to making necessary growth investments, such as human resource investment to strengthen the system, marketing investment for service recognition, internal system investment to improve work efficiency, etc.

By segment, the inside sales outsourcing business is expected to have sales of 4,469 million yen (up 4.1% from the previous fiscal year) and segment profit of 554 million yen (down 14.1% from the same period). Based on the growth strategy, sales are expected to continue to grow steadily due to the development of sales activities centered on focus areas such as IT, finance, communication/media, etc., where the company has strong skills and know-how, but in terms of profit, profit is expected to decline due to an increase in labor costs due to human resource investment such as recruitment of highly specialized human resources. The C&S business is expected to turn into a surplus with sales of 1,953 million yen (up 247.5% from the same period) and segment profit of 52 million yen (loss of 23 million yen in the previous fiscal year). In addition to expanding the business scale through M&A, it is expected that the two companies newly joined the group will contribute to performance through synergy, such as know-how, etc. possessed by each of the two companies newly added to the group and their existing businesses. Furthermore, cost reduction is promoted by reducing outsourcing and promoting in-house production, and we aim to improve profitability. The training business anticipates sales of 2,420 million yen (up 11.6% from the same period) and segment profit of 340 million yen (up 16.8% from the same period). Sales were factored in the fact that contracts for new employee training to be carried out after the 2nd quarter were smoothly obtained, and an increase in the number of IT and DX related participants in public training. On the profit side, we will implement price increases for new employee training and aim to improve profit margins. The segment profit margin for the previous fiscal year was 13.5%, but the current fiscal year is forecast to be 14.1%.

(Author: FISCO Analyst Tomokazu Murase)