■ KeyHolder <4712> Performance Trends

4. About Topos Enterprise

The company plans to subsidiarize Topos Enterprise in October 2024 and expand its business area to warehousing and transportation. In October 2023, Topos Enterprise, which had guaranteed a part of Gaia's financial debt, applied for civil rehabilitation law due to Gaia's application for civil rehabilitation law as the operator of a pachinko hall. In order to continue its business, Topos Enterprise is attempting to reconstruct its business through civil rehabilitation proceedings. In this situation, the company carefully conducted due diligence on Topos Enterprise under the close introduction of J-Trust and considered the future potential of incorporating Topos Enterprise's resources such as the expansion of the warehousing and transportation business that Topos Enterprise is engaged in, and the logistics warehouse's vast space and mobility provided by transportation vehicles in the comprehensive entertainment business and video production business. As a result, the company concluded that the expansion of the business area to the warehousing and transportation business, the creation of casting opportunities for the company's IP utilizing the wide pipe owned by Topos Enterprise, backup for events such as live performances and performances in the logistics aspect, the possibility of using it as a large studio in short supply, and the future value of owned real estate will boost the company's growth. In response to this conclusion, J-Trust designated the company as the final sponsor for Topos Enterprise's civil rehabilitation proceedings and entered into a sponsorship agreement between the company and Topos Enterprise.

* J-Trust has signed a basic agreement with Gaia, designating J-Trust, J-Trust's affiliated companies, or partner companies designated by J-Trust as sponsor candidates for the Gaia Group, and continues the business of the Gaia Group while proceeding with the rehabilitation proceedings.

Topos Enterprise operates in logistics, amusement solution, wholesale, hotel business (one artificial hot spring near Sendai station west exit and POSU), and convenience store business (three mini-stop stores). The main business is the logistics business, specializing in the storage and transportation of gaming machines centered on transactions with the group company Gaia. In the logistics business, it has its own fleet of 113 vehicles and a nationwide network through cooperative companies, and handles 150,000 gaming machines in the storage business. In the amusement solution, it has built a thorough inventory management and monitoring system, and in the wholesale business, it handles a wide range of prizes for amusement halls, mail-order products, and products for the retail industry. The performance was originally a profit-oriented structure, but with Gaia's application for civil rehabilitation law, it seems that the sales for the fiscal year ending May 2024 were 7,338 million yen, with an operating loss of 283 million yen and a net loss of 1,516 million yen. However, the company is currently working on reviewing its business, selling assets, and cost containment, and is expected to recover its performance to sales of 7,781 million yen, operating profit of 193 million yen, and net income of 115 million yen for the fiscal year ending May 2025. The background behind this performance recovery is the efforts with companies other than Gaia, which accounts for more than 60% of the sales. It seems that most companies continue their transactions even if they apply for civil rehabilitation law. Therefore, the company plans to further expand its business base and aims for sales of 800 million yen and operating profit of 200 million yen for the fiscal year ending May 2026.

(Author: FISCO guest analyst Nobumitsu Miyata)