LEOPALACE21 CORPORATION
Name of Company Listed: Leopalace21 Corporation Stock Listing: Tokyo Stock Exchange Code Number: 8848 URL: http://eg.leopalace21.com/ Location of Head Office: Tokyo Representative: Position: President and CEO Name: Eisei Miyama
Name of Contact Person: Position: Executive Officer Name: Bunya Miyao Telephone: +81-3-5350-0216
Scheduled Date of Filing of Securities Report (Japanese only): August 11, 2015
Scheduled Date of Commencement of Dividend Payments: - Supplemental Explanatory Material Prepared: Yes
Results Briefing Held: No
(1) Consolidated financial results (Amounts less than one million yen are omitted) (The percentage figures indicate rate of gain or loss compared with the same period last year)
Net sales | Operating profit | Recurring profit | Net income attributable to shareholders of the parent | |||||
Three months ended June 30, 2015 Three months ended June 30, 2014 | Million yen 124,524 115,626 | % 7.7 0.7 | Million yen 4,221 2,394 | % 76.3 19.1 | Million yen 3,918 2,175 | % 80.1 41.1 | Million yen 3,303 2,048 | % 61.3 49.4 |
(Note) Comprehensive income As of June 30, 2015: 3,198 million yen (183.9%); As of June 30, 2014: 1,126 million yen (-70.7%)
Net income per share | Diluted net income per share | |
Three months ended June 30, 2015 Three months ended June 30, 2014 | Yen 12.57 7.79 | Yen ― ― |
(2) Consolidated financial position
Total assets | Net assets | Equity ratio | Equity per share | |
As of June 30, 2015 As of March 31, 2015 | Million yen 306,609 308,274 | Million yen 129,672 126,473 | % 42.3 41.0 | Yen 493.22 481.05 |
(Reference) Shareholders' equity As of June 30, 2015: 129,653 million yen; As of March 31, 2015: 126,455 million yen
2. Dividend StatusDividend per share | |||||
End of Q1 | End of Q2 | End of Q3 | End of Q4 | Annual | |
FY ended March 31, 2015 FY ending March 31, 2016 | Yen ― ― | Yen 0.00 | Yen ― | Yen 0.00 | Yen 0.00 |
FY ended March 31, 2015 FY ending March 31, 2016 | Yen ― ― | ||||
FY ending March 31, 2016 (Estimate) | 0.00 | ― | ― | ― |
(Note) Restatement of most recent dividend forecast: None
Dividend for the end of FY ending March 31, 2016 is yet to be determined.
3. Estimation of Business Results for the Fiscal Year Ending March 31, 2016 (April 1, 2015 through March 31, 2016)(The percentage figures for full year indicate rate of gain or loss compared with the previous FY, while those for the interim period indicate rate of gain or loss compared with the same term in the previous FY)
Net Sales | Operating profit | Recurring profit | Net income attributable to shareholders of the parent | Net income per share | |||||
Six months ending September 30, 2015 FY ending March 31, 2016 | Million yen 253,000 525,000 | % 8.6 8.7 | Million yen 8,000 19,500 | % 31.4 32.1 | Million yen 7,300 18,000 | % 31.6 34.1 | Million yen 6,100 16,000 | % 20.4 10.3 | Yen 23.20 60.87 |
(Note) Restatement of most recent consolidated business results forecast: None
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4. Other
(1) Changes in major subsidiaries during the subject period (change in specific subsidiaries resulting in a change in the scope of consolidation): None
(2) Use of accounting procedures specific to the preparation of quarterly financial statements: Yes
(Note) Refer to P.6 "2. Matters Relating to Summary Information (Notes) (2) Application of Accounting Methods Specific to the Preparation of Quarterly
Consolidated Financial Statements" for details.
(3) Changes in accounting principles, procedures or reporting methods used in preparation of financial statements (changes in important items concerning preparation of financial statements)
(i) Changes in accounting policies accompanying revision of accounting standards, etc.: Yes
(ii) Changes in accounting policies other than (i) above: None
(iii) Changes in accounting estimates: None
(iv) Restatements: None
(Note) Refer to P.6 "2. Matters Relating to Summary Information (Notes) (3) Changes in Accounting Policy, Changes in Accounting Estimates,
and Restatements" for details.
(3) Total number of outstanding shares (common stock)
(i) Total number of outstanding shares at term end (including treasury stock)
As of June 30, 2015: 267,443,915 shares, As of March 31, 2015: 267,443,915 shares
(ii) Total treasury stock at term end
As of June 30, 2015: 4,569,430 shares, As of March 31, 2015: 4,569,430 shares
(iii) Average number of outstanding shares during the period
As of June 30, 2015: 262,874,485 shares, As of June 30, 2014: 262,874,705 shares
*Indication regarding the status of auditing:
These financial statements are not subject to auditing under the Financial Instruments and Exchange Act.
*Explanation on the proper use of the business forecasts, and other special notices: (Note on the business forecasts and other forward-looking statements)
The business forecasts and other forward-looking statements contained in this report are based on information currently available to the
Company and on certain assumptions that Leopalace21 has judged to be reasonable. Readers should be aware that a variety of factors might cause actual results to differ significantly from these forecasts.
For assumptions of business forecasts and notes on the proper use of these forecasts, see P.5 "1. Business Results (3) Explanation
Concerning Business Forecasts and Other Forward-looking Statements."
(Method for the acquisition of supplemental explanatory material)
Supplemental Explanatory Material on quarterly financial statements is scheduled to be posted on the Company's web site on August 7,
2015.
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【Table of Contents】
1. Business Results ...................................................................................................................................................... 4(1) Analysis of Business Results....................................................................................................................................................4 (2) Analysis of Consolidated Financial Position .............................................................................................................................5 (3) Explanation Concerning Business Forecasts and Other Forward-looking Statements ............................................................5
2. Matters Relating to Summary Information (Notes) ................................................................................................. 6(1) Changes in Significant Subsidiaries During the First Quarter under Review............................................................................6 (2) Application of Accounting Methods Specific to the Preparation of Quarterly Consolidated Financial Statements....................6 (3) Changes in Accounting Policy, Changes in Accounting Estimates, and Restatements ............................................................6
3. Consolidated Financial Statements ......................................................................................................................... 7(1) Consolidated Balance Sheets ..................................................................................................................................................7 (2) Consolidated Statements of Operations and Consolidated Statements of Comprehensive Income ........................................9
Consolidated Statements of Operations...................................................................................................................................................... 9
Consolidated Statements of Comprehensive Income ............................................................................................................................... 10 (3) Notes Regarding Consolidated Financial Statements ............................................................................................................ 11 (Notes Regarding the Premise of the Company as a Going Concern)...................................................................................................... 11
(Note Regarding Significant Changes in Shareholders' Equity) ................................................................................................................ 11
(Segment Information) ............................................................................................................................................................................... 12
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1. Business Results (1) Analysis of Business Results(Million yen)
Net sales | Operating profit | Recurring profit | Net income attributable to shareholders of the parent | |
Three months ended June 30, 2015 | 124,524 | 4,221 | 3,918 | 3,303 |
Three months ended June 30, 2014 | 115,626 | 2,394 | 2,175 | 2,048 |
Difference | 8,898 | 1,826 | 1,742 | 1,225 |
During the subject three months, the domestic economy showed gradual progression, such as signs of recovery in individual consumption, due to an improvement in corporate earnings, employment, and income.
In the rental housing industry, negative effects of the rush demand from the increase in consumption tax began to fade, and as apartment construction continues to be an ideal inheritance tax-reduction strategy, new housing starts of leased units trended at a steady pace. On the other hand, as the number of vacant houses increases due to oversupply, achieving stable occupancy rates requires constructing apartments in areas with high demand, as well as providing high-quality housing and services are required.
Under these conditions, the Leopalace21 Group (the "Group") aims to achieve targets of the Medium-term Management Plan "EXPANDING VALUE," which is in its second year, by building a solid management structure focusing on the core businesses, made up of Leasing and Construction. In addition, the Group aims to establish new businesses that will contribute to future growth.
As a result, net sales for the first quarter were ¥124,524 million (up 7.7% year-on-year). Operating profit was ¥4,221 million (up
76.3% year-on-year), recurring profit was ¥3,918 million (up 80.1% year-on-year), and net income attributable to shareholders of the parent was ¥3,303 million (up 61.3% year-on-year).
The Group's Construction Business has many building construction contracts stipulating completion in the fourth quarter, which is when demand for apartments is highest. In the Leasing Business, the number of apartments under management will increase as apartments are completed, so seasonal fluctuations put a preponderance of earnings into the fourth quarter.
(Actual figures by segment)
(Million yen)
Net sales | Operating profit | |||||
Three months ended June 30, 2015 | Three months ended June 30, 2014 | Difference | Three months ended June 30, 2015 | Three months ended June 30, 2014 | Difference | |
Leasing Business | 102,008 | 98,530 | 3,478 | 5,544 | 4,090 | 1,454 |
Construction Business | 15,423 | 11,457 | 3,966 | (463) | (882) | 418 |
Elderly Care Business | 2,677 | 2,599 | 78 | (277) | (132) | (145) |
Hotels & Resort Business | 3,159 | 2,386 | 773 | 96 | 196 | (99) |
Others | 1,254 | 652 | 602 | 286 | 158 | 128 |
Adjustments | ― | ― | ― | (965) | (1,036) | 70 |
Total | 124,524 | 115,626 | 8,898 | 4,221 | 2,394 | 1,826 |
(i) Leasing Business
The occupancy rate at the end of the first quarter was 87.59% (up 1.63 points from the end of the same quarter last year) and the
average occupancy rate for the period was 87.70% (up 1.70 points year-on-year).
In the Leasing Business, to establish stable profits led by occupancy improvement, the Group implemented measures such as tenant recruitment utilizing direct leasing offices, franchises, and local real estate brokers, as well as expanding tenant services including "Room Customize" and security system installations. In addition, the Group further strengthened sales against corporate and foreign customers as well as reduced costs by reviewing routine property management tasks.
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The number of units under management at the end of the first quarter was 557,000 (increasing 2,000 from the end of the last fiscal year), the number of direct offices was 187 (decreasing 1 from the end of the last fiscal year), and the number of franchise offices was 135 (decreasing 6 from the end of the last fiscal year).
As a result of the above, net sales amounted to ¥102,008 million (up 3.5% year-on-year), and operating profit was ¥5,544 million
(up 35.6% year-on-year).
(ii) Construction Business
Orders received during the first quarter were ¥20,758 million (up 10.6% year-on-year) and the orders received outstanding stood at
¥66,862 million (up 43.0% from the end of the same quarter last year).
In the Construction Business, the Group aimed to improve profitability by focusing apartment supply in the three metropolitan areas where solid leasing demand is anticipated, as well as providing earthquake-resistant products with better sound insulation. In addition, the Group expanded construction variations such as elderly care facilities, stores, and built-to-order houses to meet various land usage needs, and has begun restructuring its project systems.
As a result, net sales came to ¥15,423 million (up 34.6% year-on-year), and operating loss was ¥463 million (down 47.5%
year-on-year).
(iii) Elderly Care Business
Net sales were ¥2,677 million (up 3.0% year-on-year), and operating loss was ¥277 million (up 110.5% year-on-year). In the
Elderly Care Business, which was positioned as growth strategy area in the Medium-term Management Plan, the Group will open new facilities in collaboration with the Construction Business.
(iv) Hotels & Resort Business
Net sales of the resort facilities in Guam and hotels in Japan were ¥3,159 million (up 32.4% year-on-year), and operating profit was ¥96 million (down 50.6% year-on-year).
(v) Other Businesses
In Other Businesses such as the small-claims and short-term insurance business, the solar power generation business, and the
finance business, net sales were ¥1,254 million (up 92.3% year-on-year), and operating profit was ¥286 million (up 81.1%
year-on-year).
(i) Position of Assets, Liabilities, and Net assets
(Million yen)
Assets | Liabilities | Net assets | |
As of June 30, 2015 | 306,609 | 176,936 | 129,672 |
As of March 31, 2015 | 308,274 | 181,801 | 126,473 |
Difference | (1,665) | (4,864) | 3,198 |
Total assets at the end of the first quarter decreased ¥1,665 million from the end of the previous fiscal year, to ¥306,609 million. This was mainly attributable to a decrease of ¥808 million in cash and cash equivalents, ¥779 million in trade receivables, and ¥758 million in buildings and structures, despite an increase of ¥1,704 million in machinery, equipment, and vehicles related to solar power generation business.
Total liabilities decreased ¥4,864 million from the end of the previous fiscal year, to ¥176,936 million. This primarily reflected a decrease of ¥4,311 million in accounts payable for complete projects, ¥4,846 million in unpaid expenses, and ¥4,584 million in long and short term advances received, despite an increase of ¥7,825 million in long-term debt.
Net assets increased ¥3,198 million from the end of the previous fiscal year, to ¥129,672 million, chiefly due to a recording of
¥3,303 million in net income attributable to shareholders of the parent. The ratio of shareholders' equity to assets rose 1.3 points from the end of the previous fiscal year, to 42.3%.
Business forecasts announced in the consolidated financial statements published on May 11, 2015 remain unchanged.
Please note that business forecasts and other forward-looking statements contained in this report are based on information currently available to the Group as of the publication of this statement, and actual results may differ due to a variety of factors.
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2. Matters Relating to Summary Information (Notes) (1) Changes in Significant Subsidiaries During the First Quarter under ReviewNot applicable
(2) Application of Accounting Methods Specific to the Preparation of Quarterly Consolidated Financial StatementsTax expenses are calculated by multiplying net income before income taxes by a reasonably estimated effective tax rate, after applying the tax effect accounting to net income before income taxes for the consolidated fiscal year that includes the first quarter.
(3) Changes in Accounting Policy, Changes in Accounting Estimates, and Restatements
(Changes in accounting policies)
(Application of accounting policies related to business combinations)
Starting in the first quarter of the consolidated fiscal year, the Accounting Standard for Business Combinations (ASBJ Statement No. 21 on September 13, 2013; hereinafter referred to as the "Business Combinations Accounting Standard"), the Accounting Standard for Consolidated Financial Statements (ASBJ Statement No. 22 on September 13, 2013; hereinafter referred to as the
"Consolidated Accounting Standard"), the Accounting Standard for Business Divestiture (ASBJ Statement No. 7 on September 13,
2013; hereinafter referred to as the "Business Divestiture Accounting Standard"), and other standards, Leopalace21 Corporation (the "Company") changed accounting methods to those recording differences from fluctuations in equity that the Company holds in subsidiaries, for which the Company continues to control as capital surplus, and recording acquisition-related expenses as expenses
for a consolidated fiscal year when the relevant expenses incur. The Company also changed accounting methods to those reflecting a review of the distribution amount of acquisition costs following the finalization of preliminary accounting processing for business combinations that are carried out after the beginning of the first quarter of the consolidated fiscal year to quarterly consolidated financial statements for the consolidated quarterly accounting period to which the business combination belongs. Moreover, the
Company changed the presentation, such as quarterly net income, and the presentation of minority interests to non-controlling interests. To reflect changes in the relevant presentation, the Company reclassified quarterly consolidated financial statements for the first quarter of the previous consolidated fiscal year and consolidated financial statements for the previous consolidated fiscal year.
The Company applies the Business Combinations Accounting Standard and other standards in compliance with the transitional
handling as set forth in Paragraph 58-2 (4) of the Business Combinations Accounting Standard, Paragraph 44-5 (4) of the Consolidated Accounting Standard and Paragraph 57-4 (4) of the Business Divestiture Accounting Standard, and it applied these standards from the beginning of the first quarter of the consolidated fiscal year and will continue to apply them in the future.
There is no impact on profits and losses from the changes described above.
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3. Consolidated Financial Statements (1) Consolidated Balance Sheets(Million yen)
June 30, 2015 | March 31, 2015 | |
|
Current assets
Cash and cash equivalents Trade receivables Accounts receivable for completed projects Operating loans Securities Real estate for sale Payment for construction in progress Raw materials and supplies Prepaid expenses Deferred tax assets Other accounts receivable Others Allowance for doubtful accounts | 74,412 5,475 1,689 1,069 701 21 889 612 3,384 4,469 2,843 4,031 (227) | 75,221 6,254 1,714 1,135 831 21 647 609 3,656 4,447 3,013 4,907 (199) |
Total current assets | 99,372 | 102,263 |
Non-current assets Property, plant, and equipment Buildings and structures Machinery, equipment, and vehicles Land Leased assets Construction in progress Others | 59,140 16,819 83,429 8,898 387 2,131 | 59,899 15,115 83,289 7,880 992 2,253 |
Total property, plant, and equipment | 170,807 | 169,430 |
Intangible fixed assets Goodwill Others | 1,656 7,101 | 1,684 7,210 |
Total intangible fixed assets | 8,758 | 8,894 |
Investments and other assets Investment securities Long-term loans Bad debts Long-term prepaid expenses Deferred tax assets Others Allowance for doubtful accounts | 6,953 535 1,307 3,432 14,705 2,791 (2,170) | 6,832 540 1,297 3,416 14,654 2,905 (2,085) |
Total investments and other assets | 27,555 | 27,561 |
Total non-current assets | 207,121 | 205,887 |
Deferred assets | 114 | 123 |
Total assets | 306,609 | 308,274 |
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(Million yen)
June 30, 2015 | March 31, 2015 | |
|
Current liabilities
Accounts payable Accounts payable for completed projects Short-term borrowings Bonds due within one year Lease obligations Accounts payable-other Accrued expenses Accrued income taxes Advances received Customer advances for projects in progress Reversal of allowance for employees' bonuses Reserve for warranty obligations on completed projects Reserve for fulfillment of guarantees Others | 2,717 9,737 23,596 1,460 2,660 13,620 156 699 37,748 6,676 1,312 438 690 3,887 | 2,803 14,049 23,065 1,460 2,355 18,466 13 944 40,781 6,930 － 404 700 4,546 |
Total current liabilities | 105,402 | 116,521 |
Non-current liabilities Bonds Long-term debt Lease obligations Long-term advances received Lease/guarantee deposits received Deferred tax liabilities Reserve for apartment vacancy loss Liability for retirement benefit Others | 3,510 15,021 7,287 20,647 7,838 253 4,913 9,538 2,524 | 3,960 7,196 6,450 22,198 8,019 253 5,280 9,351 2,569 |
Total non-current liabilities | 71,534 | 65,279 |
Total liabilities | 176,936 | 181,801 |
|
Shareholders' equity
Common stock Capital surplus Retained earnings Treasury stock | 75,282 45,235 9,997 (3,660) | 75,282 51,501 427 (3,660) |
Total shareholders' equity | 126,854 | 123,550 |
Accumulated other comprehensive income Net unrealized gains on "other securities" Foreign currency translation adjustments Remeasurements of defined benefit plans | 362 3,402 (965) | 379 3,545 (1,021) |
Total accumulated other comprehensive income | 2,799 | 2,904 |
Share subscription rights Non-controlling interests | 18 0 | 18 0 |
Total net assets | 129,672 | 126,473 |
Total liabilities and net assets | 306,609 | 308,274 |
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(2) Consolidated Statements of Operations and Consolidated Statements of Comprehensive IncomeConsolidated Statements of Operations
(Million yen)
Three months ended June 30, 2015 (Apr. 2015-Jun. 2015) | Three months ended June 30, 2014 (Apr. 2014-Jun. 2014) | |
Net sales | 124,524 | 115,626 |
Cost of sales | 103,965 | 98,574 |
Gross profit | 20,558 | 17,051 |
Selling, general, and administrative expenses | 16,337 | 14,657 |
Operating profit | 4,221 | 2,394 |
Non-operating profit Interest income Dividend income Refund of fixed asset tax Others | 7 51 － 37 | 8 62 99 41 |
Total non-operating profit | 97 | 211 |
Non-operating expenses Interest expenses Commission fee Others | 284 75 41 | 289 111 29 |
Total non-operating expenses | 401 | 430 |
Recurring profit | 3,918 | 2,175 |
Extraordinary profit Gain on sales of property, plant and equipment | 3 | － |
Total extraordinary profit | 3 | － |
Extraordinary losses Loss on disposal of property, plant and equipment Loss on evaluation of investment securities Impairment loss | 8 19 101 | 29 － 70 |
Total extraordinary losses | 129 | 100 |
Income before taxes and other adjustments | 3,791 | 2,075 |
Income taxes | 487 | 31 |
Net income | 3,304 | 2,043 |
Net income attributable to non-controlling interests | 0 | (4) |
Net income attributable to shareholders of the parent | 3,303 | 2,048 |
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Consolidated Statements of Comprehensive Income
(Million yen)
Three months ended June 30, 2015 (Apr. 2015-Jun. 2015) | Three months ended June 30, 2014 (Apr. 2014-Jun. 2014) | |
Net income Other comprehensive income Net unrealized gains on "other securities" Translation adjustments Remeasurements of defined benefit plans Share of other comprehensive income of associates | 3,304 (17) (142) 55 (0) | 2,043 (9) (947) 40 (0) |
Total other comprehensive income | (105) | (916) |
Comprehensive income | 3,198 | 1,126 |
(Breakdown) Comprehensive income attributable to shareholders of the parent Comprehensive income attributable to non-controlling interests | 3,198 0 | 1,131 (4) |
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(3) Notes Regarding Consolidated Financial Statements
(Notes Regarding the Premise of the Company as a Going Concern) There are no relevant items.
(Note Regarding Significant Changes in Shareholders' Equity)
At the Annual Meeting of Shareholders held on June 26, 2015, the Company resolved that, in accordance with the provisions set forth in Paragraph 1 of Article 448 of the Companies Act, the amount of legal capital surplus was reduced and the same amount as the reduced amount was transferred to the other capital surplus, and, in accordance with provisions set forth in Article 452 of the
Companies Act, after the relevant transfer, all the other capital surplus was appropriated to offset a loss in retained earnings brought forward.
As a result, in the first quarter of the consolidated fiscal year, the capital surplus declined ¥6,266 million and retained earnings increased by the same amount.
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(Segment Information)
Three months ended June 30, 2015 (April 1, 2015 through June 30, 2015)(Million yen)
Reportable Segment | Others (Note 1) | Total | Adjustments (Note 2) | Consolidated Total (Note 3) | |||||
Leasing Business | Construction Business | Elderly Care Business | Hotels & Resort Business | Segment Total | Others (Note 1) | Total | Adjustments (Note 2) | Consolidated Total (Note 3) | |
Net sales (1) Sales to customers (2) Inter-segment sales and transfers | 102,008 191 | 15,423 1,752 | 2,677 － | 3,159 942 | 123,269 2,885 | 1,254 38 | 124,524 2,924 | － (2,924) | 124,524 － |
Total | 102,200 | 17,176 | 2,677 | 4,101 | 126,155 | 1,293 | 127,448 | (2,924) | 124,524 |
Segment earnings (or loss) | 5,544 | (463) | (277) | 96 | 4,900 | 286 | 5,186 | (965) | 4,221 |
(Million yen)
Reportable Segment | Others (Note 1) | Total | Adjustments (Note 2) | Consolidated Total (Note 3) | |||||
Leasing Business | Construction Business | Elderly Care Business | Hotels & Resort Business | Segment Total | Others (Note 1) | Total | Adjustments (Note 2) | Consolidated Total (Note 3) | |
Net sales (1) Sales to customers (2) Inter-segment sales and transfers | 98,530 123 | 11,457 3,155 | 2,599 － | 2,386 707 | 114,973 3,986 | 652 31 | 115,626 4,018 | － (4,018) | 115,626 － |
Total | 98,653 | 14,613 | 2,599 | 3,093 | 118,960 | 683 | 119,644 | (4,018) | 115,626 |
Segment earnings (or loss) | 4,090 | (882) | (132) | 196 | 3,272 | 158 | 3,430 | (1,036) | 2,394 |
Note 1: "Others" classification consists of the business segment not included in reportable segments, and comprises such businesses as the small-claims and short-term insurance business, solar power generation business and financing businesses.
Note 2: Breakdown of adjustments is as follows.
Segment earnings (or loss) (Million yen)
Three months ended June 30, 2015 | Three months ended June 30, 2014 | |
Inter-segment eliminations Corporate expenses* | (185) (779) | (307) (728) |
Total | (965) | (1,036) |
*Corporate expenses consist mainly of general administrative expenses for administrative departments that are not part of reportable segments.
Note 3: Segment profit (loss) is adjusted to the operating profit on the Consolidated Statements of Operations
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