■Summary

D&M Company <189A> is engaged in management support services for businesses related to medical care, nursing care, disability welfare, and Health Care services. The core service is "F&I (Finance & Investment) Services," which involves receivables factoring for medical and nursing fees and leasing for related businesses. The business structure also includes "C&Br (Consulting & Business Renovation) Services" for business, organizational, and operational reform consulting and "HR&OS (Human Resources & Outsourcing) Services" that support BPO and personnel securing.

1. Overview of the First Quarter Results for May 2025 Fiscal Year

The consolidated results for the first quarter of the May 2025 fiscal year, which will be the first business year after the listing in June 2024, are revenue of 441 million yen (up 44.1% year-on-year), gross profit of 209 million yen (up 14.2% year-on-year), operating profit of 87 million yen (up 19.9% year-on-year), ordinary profit of 86 million yen (up 18.1% year-on-year), and quarterly Net income attributable to shareholders of 60 million yen (up 18.8% year-on-year). Compared to the same period of the previous year before listing, revenue has significantly increased, and profits have also remained steady. The progress rate against the performance forecast for the May 2025 fiscal year is 31.8% for revenue, 24.6% for gross profit, 29.1% for operating profit, 28.9% for ordinary profit, and 30.5% for Net income attributable to shareholders, indicating overall favorable progress. For revenue, the core F&I service recorded 188 million yen, a 31.2% increase year-on-year, while C&Br service recorded 193 million yen, a 101.2% increase year-on-year. However, HR&OS service saw a decrease of 10.5% to 59 million yen. C&Br service included large-scale medical devices sales worth 0.1 billion yen, helping to increase revenue. In the F&I service segment, while the number of business partners increased, projects were selectively scrutinized from the perspectives of profitability and credit risk, leading to a decrease in the receivables purchase balance compared to the end of the previous term, but an improvement in the gross profit margin by 2.2 points. In terms of profits, gross profit increased by 35.5% year-on-year due to growth in the F&I service, but the C&Br service faced a decrease of 10.9% due to low-profit large sales projects, resulting in a decrease in gross profit margin by 29.9 points. Although the gross profit of the HR&OS service decreased by 5.8% year-on-year, the gross profit margin improved by 2.9 points. On the cost side, selling, general and administrative expenses increased by 11.4 million yen due to one-time costs associated with the listing.

2. Performance Outlook for the May 2025 Fiscal Year

For the May 2025 fiscal year, consolidated results are expected to be revenue of 1,390 million yen (up 16.9% from the previous year), operating profit of 301 million yen (up 7.4%), ordinary profit of 300 million yen (up 9.3%), and Net income attributable to shareholders of 197 million yen (up 11.6%). The core F&I service is expected to achieve a revenue of 758 million yen, an increase of 20.7%, and is expected to drive overall performance. The C&Br service has plans for large sales projects in the future, expecting revenue of 396 million yen, an increase of 25.5%. The HR&OS service anticipates a decrease in personnel dispatch service revenue, forecasting a 4.0% decrease in revenue to 235 million yen, but plans to compensate by focusing on expanding foreign employment support and outsourcing services due to expected market needs. In terms of profits, the gross profit margin is expected to decline by 2.1 points to 61.4% as a result of enhanced sales in the C&Br service; however, gross profit is expected to increase by 13.1% to 853 million yen. Selling, general and administrative expenses are anticipated to increase by approximately 78 million yen due to rising personnel costs associated with employee hiring and various management expenses related to the listing, leading to an expected increase in operating profit of 7.4%.

3. Growth Strategy

The growth strategy consists of two phases. In the short-term measures "Phase 1," the focus will be on expanding the customer base (platform) through the provision of services centered on factoring. This customer base will be positioned as the company's business platform, and C&Br services and HR&OS services other than factoring will be cross-sold to increase the average revenue per customer. The aim is to expand the customer base for the future and increase current revenue through "increased customer numbers × increased customer revenue." In the subsequent medium- to long-term measures "Phase 2," the established customer base from Phase 1 will be utilized. Based on the trust built through transactions, consulting services will be offered to customers to explore new needs, expand the service menu, and propose further enhancements to customer revenue as solutions.

■Key Points

Support for medical and nursing care service providers in need of management improvement, primarily through the purchasing service of medical fee receivables and others.

In the first quarter of the fiscal period ending May 2025, the C & Br service, which contributed alongside F & I services, has grown significantly with large merchandise projects.

In 2025, the repayment of over 2 trillion yen from the special loans provided by the Independent Administrative Institution Welfare and Medical Service Agency (WAM) is expected to start in earnest, and the demand for funds is anticipated to increase further.

Aiming to expand the customer base based on the receivables purchasing service for future continuous growth.

(Writer: FISCO analyst Tomoichi Murase)