Business Overview 4. DX Regional Collaboration Project Signpost's DX and Regional Collaboration Project started in March 2022 with the establishment of the DX and Regional Collaboration Division. It aims to provide products and services that contribute to regional collaboration by collaborating with local financial institutions nationwide, utilizing its own DX technology and open innovation. In August 2022, it began working with Oita Made Co., Ltd., which was established with the investment of multiple companies in Oita Prefecture, including Oita Bank, to sell original products made in Oita Prefecture to both domestic and overseas markets and to match local companies and Signpost's products and services in order to promote the revitalization of Oita Prefecture's economy. In addition, in April 2024, it started offering DX support services for medium-sized and small businesses. As the first effort, it supports the creation of DX declaration by (The) Fourth Hokuriku Bank, Ltd. (Niigata City, Niigata Prefecture) to deploy DX declaration support services to the market. Furthermore, it will realize new solutions by commercializing its own technology and open innovation and promote regional collaboration through innovation.
The market demand for home-based recovery and end-of-life care is expanding.
At Flares, the business domain includes everything from home recovery to end-of-life care, providing visiting massage, nursing care, hospice, home care, and home nursing. From the perspective of demographic changes, the elderly population has reached its peak, and as the population of elderly people living alone increases, a high mortality society has arrived, with approximately 400,000 end-of-life care refugees. It is said to exist. It is expected that the number of hospital beds in medical institutions will decrease, while the number of waiting lists for care facilities such as special nursing homes is increasing year by year. Along with the promotion of government initiatives to build a comprehensive regional care system, the importance of home-based care is increasing.
There are many growth-oriented companies entering the market along with the expansion of needs. In the visiting massage industry, the same company leads the industry as No. 1, followed by HITOWA Life Partnership Co., Ltd., which operates under the KEiROW brand. In the nursing care machine industry, Nichii Gakkan Co., Ltd., SOMPO Holdings, Inc., and Tsukui Co., Ltd. are among those that are deployed. The largest player in the nursing care machine industry is Sent Care Holdings Co., Ltd. In the hospice industry, Ambis Holdings, Inc., Sunwells Co., Ltd., Japan Hospice Holdings, Inc., and Sea-U-Sea Hospice Co., Ltd. have entered and expanded their scale.
The massage direct sales business mainly provides insurance-applicable massage services under the medical insurance system. Insurance-applicable massage services are medical business-like activities that an anma massage and shiatsu therapist with a license obtained by passing the national exam for anma massage and shiatsu practitioner performs based on related laws and regulations. Unlike massage services for relaxation purposes, they visit the homes and care facilities of elderly people who are forced to live a recovery life at home or in care facilities because of difficulties in walking due to bedriddenness or other reasons, providing massage services. It is common to provide massage services based on the user's needs, such as pain relief, improvement of paralyzed muscles, improvement of edema such as lymph, improvement of joint contracture, expansion of joint range of motion, etc., based on the agreement of the user's attending physician. As there are restrictions on the distance at which anma massage and shiatsu therapists can visit the user's home from their workplace, the company has developed a strategy to cover a wide area by deploying direct and FC stores nationwide and has a leading position in the industry.
The massage direct sales business has been steadily progressing, but the performance declined in the 2021 fiscal year due to the increase in cases in which service provision in care facilities was constrained by the COVID-19 pandemic. Since the 2022 fiscal year, it has been gradually recovering, and in the 2024 fiscal year, when the classification of new coronavirus infections disease under the Infectious Diseases Control Law was lowered to Class 5, and reopened care facilities, revenue was 3,525 million yen and segment profit was 999 million yen, returning to pre-COVID-19 levels.
In the KPI for the massage direct sales business in March 2024, the cumulative number of users was 99,344 (an increase of 10,579 from the previous period), the monthly utilization rate per user was 7.3 times (down from 7.4 times in the previous period), and the daily treatment rate per therapist was 10.3 times (an increase of 0.5 times from the previous period). These indicators are all moving smoothly, and productivity is increasing as the number of users increases.
In the massage FC business, based on the FC alliance agreement between the company and FC franchisees, franchisees provide insurance-applicable massage services. When a new franchisee is established, the company surveys the market in the desired area of establishment and provides advice on specific business locations, as well as explaining regulations and transaction practices related to business operations, providing various kinds of support for establishment. Even after opening, continuous advice is provided on business operation issues, management policies, relationship building with care managers and attending physicians, and massage training for anma massage and shiatsu therapists employed by franchisees. The number of massage FC stores has increased rapidly by over 200 stores in the 2021 fiscal year and has steadily increased since then. In the March 2024 fiscal year, the net increase will be 29 stores, and the scale will be 3.8 times that of direct stores. The increase can be attributed to increased awareness due to the introduction of the business on TV programs and the strengthening of sales activities targeting corporations.
The market demand for home-based recovery and end-of-life care is expanding.
At Flares, the business domain includes everything from home recovery to end-of-life care, providing visiting massage, nursing care, hospice, home care, and home nursing. From the perspective of demographic changes, the elderly population has reached its peak, and as the population of elderly people living alone increases, a high mortality society has arrived, with approximately 400,000 end-of-life care refugees. It is said to exist. It is expected that the number of hospital beds in medical institutions will decrease, while the number of waiting lists for care facilities such as special nursing homes is increasing year by year. Along with the promotion of government initiatives to build a comprehensive regional care system, the importance of home-based care is increasing.
The massage FC business provides insurance-applicable massage services at franchise stores based on an FC alliance agreement between the company and FC franchisees. When a new franchisee is established, the company surveys the market in the desired area of establishment and provides advice on specific business locations, as well as explaining regulations and transaction practices related to business operations, providing various kinds of support for establishment. Even after opening, continuous advice is provided on business operation issues, management policies, relationship building with care managers and attending physicians, and massage training for anma massage and shiatsu therapists employed by franchisees. The number of massage FC stores has increased rapidly by over 200 stores in the 2021 fiscal year and has steadily increased since then. In the March 2024 fiscal year, the net increase will be 29 stores, and the scale will be 3.8 times that of direct stores. The increase can be attributed to increased awareness due to the introduction of the business on TV programs and the strengthening of sales activities targeting corporations.
Despite the COVID-19 pandemic, the sales and segment profits of the massage FC business have been expanding smoothly since March 2021. As well as the growth stemming from the increase in the number of franchise stores so far, there is room for growth from further enhancement of headquarter support which can increase the number of users.
4. Facility-Based Care Services Business
In the facility-based care services business, it operates eight Kan-ta-ki facilities and three hospices (as of the end of March 2024). Kan-ta-ki is a service that supports recuperation at home for those with a high level of medical dependence, those who are in unstable condition immediately after discharge, and those who wish to receive in-home care and services. The facility is characterized by providing four services: home nursing care, home care, day services, and short-stay services in one facility. The hospice is a facility-type service that provides safe and secure care 24/7 by nurses and care workers for patients who receive chronic-phase or end-of-life medical care, such as those with terminal cancer or who rely on ventilators for breathing, or with specific diseases such as neurodegenerative diseases, etc. It also has a visiting nursing care station and visiting care station attached to a housing-type paid elderly care home or a service-type elderly care home, and the previous three locations have a small-scale structure with 20 to 28 beds, characterized by detailed care. Both businesses are being developed using the medical insurance and long-term care insurance systems.
In KPI for facility-based care services business, the occupancy rate is being monitored on a monthly basis. Although the occupancy rate of the hospice decreased at the time of opening new stores, it recovered the following month and recorded a high occupancy rate of over 90%. This is thought to be influenced by the accuracy of location selection, the ability to provide detailed care with a small-scale structure of 20 to 28 beds, and the use of acupuncture and massage therapy unique to a massage company for palliative care. The occupancy rate of Kan-ta-ki is in the 70% range and, although not as much as the hospice, it is moving at a level where it can secure profits and losses. Similarly to the hospice, a decrease in the occupancy rate is observed in the month of opening new stores, but it recovers the following month.
(Written by FISCO Guest Analyst, Hideo Kakuta)