Performance Trend 1. Overview of performance for FY3/2024 Consolidated performance for FY3/2024 of G-7 Holdings <7508> was 192,992 million yen in increased operating income of 9.1% over the previous year, and increased ordinary income of 7.4% to 7,318 million yen, and attributed to the parent company's net income of 5,175 million yen, an increase of 35.3% over the previous year. Sales were driven by the Business Supermarket Business and the Meat Business, and continued to set a new record high, exceeding the company's plan by 4.3%. However, in terms of profits, the automobile-related business was affected by a decrease in profits due to poor sales of winter tires due to a warm winter, and could not reach the company's plan, it turned to a profit increase for the second time due to the growth of other businesses centered on the Business Supermarket business. The sales cost ratio has increased by 0.8 points over the previous year due to changes in the sales composition ratio; however, the selling, general and administrative expense ratio decreased by 0.7 points due to the effect of increased earnings, and the operating margin decreased by 0.1 points to 3.6%. The main reasons for the increase/decrease of selling, general and administrative expenses were a decrease of 600 million yen in energy costs due to subsidies from rising electricity prices, and an increase of 1 billion yen in labor costs due to improvements in employee treatment and increased education costs. In addition to this, depreciation expenses increased by nearly 600 million yen due to rising construction material costs and rising costs of opening stores etc. The EBITDA margin has increased by 0.1 points from the previous year. Also, the reason for the large increase in the net income of the parent company's shareholders attributable to the current period is due to the elimination of 500 million yen in retirement benefits paid to executives that were recorded as special losses in the previous year, a decrease of 455 million yen in impairment losses, and a gain of 127 million yen on the sale of investment securities in FY3/2024.
2. Financial situation. When looking at the financial situation of Inaboholdings <7539> as of the end of the second quarter of the fiscal year ending September 2024, the current assets increased by 1,954 million yen compared to the previous period end, reaching 32,121 million yen. In major subjects, cash and deposits decreased by 33 million yen, while the receivables from bills and unfinished construction work and other unearned income increased by 1,946 million yen, and construction costs of incomplete construction increased by 28 million yen. Fixed assets decreased by 700 million yen to 13,134 million yen. The breakdown is that tangible fixed assets decreased by 30 million yen to 6,575 million yen, intangible fixed assets increased by 231 million yen to 449 million yen (including goodwill increased by 223 million yen), and investment and other assets decreased by 901 million yen to 6,109 million yen. As a result of these, the total assets increased by 1,253 million yen to 45,255 million yen.
As of the end of March 2024, Polaris Holdings (3010) total assets increased by ¥1445 million from the previous period to ¥23,208 million. Current assets decreased by ¥4,906 million, which was mainly due to the sale of investment properties for ¥5,857 million. Fixed assets increased by ¥3,461 million, mainly due to an increase in tangible fixed assets such as buildings and structures. Cash and deposits were ¥3,384 million, maintaining a certain level for future M&A and investments.
Total liabilities decreased by ¥5,419 million from the previous period to ¥16,323 million. This was mainly due to a decrease in long-term borrowings (including those due within one year) of ¥4,682 million and a decrease in corporate bonds of ¥918 million. Total net assets increased by ¥3,974 million to ¥6,884 million. This was mainly due to an increase in retained earnings resulting from net income attributable to the parent company shareholders of ¥4,072 million.
In terms of financial indicators, the self-capital ratio was 29.7% (compared to 11.8% in the previous period), and the financial base was strengthened. This was mainly due to repayment of related borrowings through the sale of investment properties and growth in net income.
(Written by FISCO Guest Analyst, Hideo Kakuta)