Shareholder return strategy: No. 1<3562> changed its shareholder return policy along with the publication of the new mid-term management plan "Evolution 2027" and showed the direction of significantly strengthening shareholder return. So far, we have aimed for stable dividends (30% dividend payout ratio as a guide), but in the future, we plan to implement stable and continuous shareholder dividends based on a policy of aiming for a 30% dividend payout ratio, regardless of changes in annual performance. A notable feature is that we have set a minimum dividend of the previous year's annual dividend per share and will continue to increase dividends, which is a significant enhancement of shareholder return and can also be evaluated as a expression of confidence in profit growth. Moreover, we have a policy of "flexibly implementing under financial discipline" for acquiring our own shares, showing a more proactive stance.* *Considering the gap between our own perception of the stock price and the market evaluation, ROE, capital efficiency, and CF level, we have a policy of implementing it flexibly. Dividends for the fiscal year ending February 2024 will increase by 1 yen from the previous year, as expected at the beginning of the period, to 33 yen per share (mid-term dividend of 16.5 yen and year-end dividend of 16.5 yen). We also acquired 340,000 shares of our own stock (with a purchase price of 397 million yen). Despite the anticipated decline in profits for the fiscal year ending February 2025, we are expected to follow the policy of increasing dividends every period and issue a dividend of 1 yen per share (a commemorative dividend for the 35th anniversary of our founding), with an expected increase of 2 yen from the previous year to 35 yen per share (mid-term dividend of 17.5 yen and year-end dividend of 17.5 yen).

SOLIZE <5871> is implementing dividends as a shareholder return strategy. As a basic policy for dividends, it positions returning profits to shareholders as one of the most important management issues, ensuring internal reserves for future business expansion while stably distributing dividends. Based on this basic policy, it adopts the shareholder capital dividend rate (DOE: Dividend on equity ratio), setting the annual dividend amount at around 2.5% of the consolidated net assets at the end of the previous period, with no impact on dividends due to profit fluctuations.

For the fiscal year ending December 2023, a dividend of ¥44.0 per share was implemented, with a dividend payout ratio of 34.9%. For the fiscal year ending December 2024, despite a forecasted decrease in profits, there are no changes from the initial dividend forecast, and a dividend of ¥47.0 per share is expected based on the shareholder capital dividend rate, anticipating an increase of ¥3.0 per share from the previous period. As a result, the dividend payout ratio is expected to rise to 130.6%, significantly surpassing the average for services industry listed on the Prime Standard & Growth market of 38.8% and the overall industry average of 32.6% in March 2024. Regardless of performance outlook, we see the management's commitment to steadily increasing dividends in line with the growth of consolidated net assets as commendable. In particular, the fiscal year ending December 2024 is a period for proactive investments, with the potential for returns on investments contributing to an attractive dividend yield. Furthermore, as significant capital investments are not necessary for the company, and cash and deposits accumulate in line with profits, concerns about shareholder return capacity are minimal.

(Written by FISCO guest analyst Nozomi Kokushige).