Performance Trends of Net Year Group ＜3622＞

1. Overview of the consolidated results for the fiscal year ending March 2025

For the interim period of the fiscal year ending in March 2025, the performance showed a decrease of 11.9% year-on-year in revenue, amounting to 1502 million yen, an operating loss of 59 million yen (compared to a loss of 36 million yen in the same period last year), an ordinary loss of 59 million yen (compared to a loss of 36 million yen in the same period last year), and a net loss of 132 million yen (compared to a loss of 27 million yen in the same period last year). Despite strong orders, the lower order backlog at the end of the previous period at 667 million yen, compared to 909 million yen at the end of March 2023, was cited as a factor in the revenue decline. The gross profit margin improved by 0.2 points compared to the same period last year, and with efforts towards cost control resulting in a 2.8% decrease in sales, general, and administrative expenses, the operating loss remained slightly higher. However, due to a special loss of 90 million yen recorded for the evaluation loss on investment securities, the net loss for the interim period increased by 105 million yen compared to the same period last year. With the decrease in the net assets of the capital business partner company, the full acquisition price was recognized as a valuation loss. Nevertheless, the business partnership continues, and there have been certain achievements, including releasing joint development projects.

Revenue Trends by Global Sectors showed a decrease of 26.7% year-on-year to 465 million yen for NTT Group projects centered around NTT Data due to the completion of large projects. Additionally, revenue decreased for Retail & Restaurant Industry by 13.7% to 492 million yen, for the Service Industry by 12.1% to 239 million yen. To cover these declines, revenue for other industry sectors increased by 34.2% to 304 million yen, but this increase was insufficient to offset the declines.

Looking at the factors affecting the increase and decrease in sales, personnel expenses increased by 5 million yen year-on-year, while other expenses increased by 12 million yen due to the inclusion of development costs for new products. However, payment fees decreased by 13 million yen, and recruitment expenses decreased by 12 million yen each. The number of new graduate hires increased by 1 from the previous year to a total of 9, but recruitment expenses decreased due to a reduction in mid-career hiring. The number of employees at the end of the interim period seems to have slightly increased from 189 at the end of the previous period.

Debt-free management with a self-capital ratio in the 80% range and good financial performance

2. Financial condition and performance indicators.

As of the end of the interim period of the fiscal year ending in March 2025, the total assets decreased by 296 million yen compared to the previous period, amounting to 2892 million yen. The main factors contributing to this decrease include a reduction of 24 million yen in cash and deposits, 251 million yen in accounts receivable and contract assets in current assets, a decrease of 90 million yen in investment securities in fixed assets, and an increase of 18 million yen in deferred tax assets.

Total liabilities decreased by 121 million yen compared to the previous period to 349 million yen. Trade payables decreased by 82 million yen, and bonus reserves decreased by 14 million yen. In addition, total net assets decreased by 174 million yen to 2542 million yen. A mid-term net loss of 132 million yen was recorded, and profit surplus decreased due to a dividend payment of 41 million yen.

Regarding management indicators, the equity ratio is maintained at a high level of 87.9% with debt-free management, and cash and deposits amount to 2136 million yen, ensuring a level that is not problematic considering the business size. The financial situation can be judged to be sound. In the future, the policy is to allocate available funds to growth investments including M&A and alliances, as well as shareholder returns. The target of M&A and alliances will be companies with advanced technologies and human resources in the EC, AI, and big data fields. By supplementing the currently lacking resources through M&A and alliances, it is a strategy to efficiently expand the business.

(Written by FISCO guest analyst, Jo Sato)