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.
3. Financial Condition and Management Indicators
The total assets of NSW＜9739＞ for the fiscal year ending March 2024 increased by JPY 3,475 million from the previous fiscal year-end to JPY 44,138 million. This is mainly due to increases in cash and deposits, trade receivables and contract assets, and investment securities. Total liabilities increased by JPY 180 million to JPY 10,964 million. This was mainly due to increases in unpaid consumption tax, expenses payable, and decreases in unpaid corporate tax. Total net assets increased by JPY 3,295 million to JPY 33,174 million due to recording of net income attributable to the parent company's shareholders.
As a result, the current ratio (current assets/current liabilities) increased by 40.0 points from the previous fiscal year-end to 424.6%, indicating extremely high short-term payment capacity. Conversely, the fixed ratio (fixed assets/shareholders' equity) decreased by 3.5 points to 29.9%. Acquisition of fixed assets (property, plant, and equipment investments) is sufficiently covered by shareholder capital without any repayment deadline, and the company continues to operate without debt. The shareholders' equity ratio increased by 1.7 points to 75.2%, significantly surpassing the Tokyo Stock Exchange Prime Market's average of 30.6% in the "information and communications" industry at the end of March 2023, indicating extremely high financial soundness. Similarly, ROE is 13.6% and ROA is 14.0%, significantly higher than the Prime Market's "information and communications" industry averages of 7.2% and 4.1%, respectively, indicating extremely high profitability.
At the end of the fiscal year ending March 2024, the balance of cash and cash equivalents decreased by JPY 4,540 million from the previous fiscal year-end to JPY 10,812 million due to spending on time deposit deposits.
Looking at the situation of each cash flow, funds obtained from operating activities amounted to JPY 505.1 million (an increase of JPY 305.3 million from the previous year). This is mainly due to the increase in non-financial factors such as depreciation and the decrease in inventories in response to recording of pre-tax net income for the current period and the payment of corporate taxes among the factors causing decrease. On the other hand, funds used in investing activities amounted to JPY 870.3 million (an increase of JPY 769.2 million in expenditures). This is primarily due to income from the sale of tangible fixed assets among the factors causing increase and expenditures arising from time deposit deposits and the acquisition of investment securities causing decrease. In addition, funds used in financing activities amounted to JPY 89.4 million (an increase of JPY 7.5 million in expenditures). This is mainly due to payment of dividends.
(Written by FISCO guest analyst Nozomi Kokushige).