Translation
Notice: This document is an excerpt translation of the original Japanese document and is only for reference purposes. In the event of any discrepancy between this translated document and the original Japanese document, the latter shall prevail.
Summary of Non-Consolidated Financial Results
for the Six Months Ended February 28, 2022
(Based on Japanese GAAP)
Company name: | |
Stock exchange listing: | |
Stock code: | 7035 |
Representative: | Rinji Aoki, President and Representative Director |
Contact: | Tomoki Hasumi, Director |
and factory, inc Tokyo
April 14, 2022
URLhttps://andfactory.co.jp/
Phone: +81-3-6712-7646
Scheduled date to file annual securities report: | April 14, 2022 |
Scheduled date to commence dividend payments: | - |
Preparation of supplementary material on quarterly financial results: | Yes |
Holding of annual financial results meeting: | No |
(Amounts less than one million yen are rounded down.) |
1.
Non-Consolidated financial results for the six months ended February 28, 2022
(From September 1, 2021 to February 28, 2022)
(1) Non-consolidated operating results (cumulative)
Percentages indicate year-on-year changes.
Net sales | Operating income | Ordinary profit | Net income | |||||
Six months ended February 28, 2022 Six months ended February 28, 2021 | Millions of yen 1,332 1,479 | % (10.0) (0.3) | Millions of yen 11 (207) | % - - | Millions of yen (95) (274) | % - - | Millions of yen (94) (276) | % - - |
Earnings per share | Diluted earnings per share | |
Six months ended February 28, 2022 Six months ended February 28, 2021 | Yen (9.61) (28.12) | Yen - - |
Notes:
Although dilutive shares exist, diluted earnings per share are not stated as earnings per share were negative.
(2) Non-consolidated financial position
Total assets | Net assets | Equity ratio | |
As of February 28, 2022 As of August 31, 2021 | Millions of yen 5,005 5,376 | Millions of yen 797 888 | % 15.9 16.5 |
2.
Cash dividends
Annual dividends per share | |||||
1st quarter-end | 2nd quarter-end | 3rd quarter-end | Fiscal year-end | Total | |
Year ended August 31, 2021 Year ending August 31, 2022 | Yen - - | Yen 0.00 0.00 | Yen - | Yen 0.00 | Total 0.00 |
Year ending August 31, 2022 (Forecast) | - | 0.00 | 0.00 |
:
Notice concerning Revision of the Financial Forecasts
No
3.
Forecast of non-consolidated financial results for the year ending August 31, 2022
(From September 1, 2021 to August 31, 2022)
Percentages indicate year-on-year changes.
Net sales | Operating income | Ordinary profit | Profit | Earnings per share | |||||
Full year | Millions of yen 3,050 | % 0.2 | Millions of yen 170 | % - | Millions of yen (47) | % - | Millions of yen (40) | % - | Yen (4.06) |
:
Notice concerning Revision of the Financial Forecasts
No
4.
Notes
(1) Application of special accounting treatment for quarterly financial reporting: Yes
Note: For details, please refer to "2. Quarterly Non-Consolidated Financial Statements and Notes (4) Notes to the Quarterly Non-Consolidated Financial Statements (Application of Special Accounting Treatment for Quarterly Financial Reporting)" on page 10 of the attachments to this summary.
(2) Changes in accounting policies, changes in accounting estimates, and restatement of prior period financial statements
Changes in accounting policies due to revisions to accounting standards and other regulations: Yes
Changes in accounting policies due to other reasons: No
Changes in accounting estimates: No
Restatement of prior period financial statements: No
(3) Number of issued shares (common stock)
Total number of issued shares at the end of the period (including treasury shares)
As of February 28, 2022
9,853,520 shares
As of August 31, 2021
9,827,120 shares
Number of treasury shares at the end of the period
As of February 28, 2022
257 shares
As of August 31, 2021
257 shares
Average number of shares during the period (cumulative from the beginning of the fiscal year)
Six months ended February 28, 2022
9,848,449 shares
Six months ended February 28, 2021
9,826,863 shares
Notes: This financial report is exempt from the review.
Explanation about appropriate usage of business forecasts and other special notes:
The forecasts above are based on the judgments made on the basis of currently available information. Forecasts therefore include risks and uncertainties.
Actual results may differ significantly from projections due to a variety of factors. For information regarding the assumptions underlying the Company's earnings forecast and cautionary notes concerning the use of the forecast, please refer to "(3) Operating Performance Forecast" on page 4 of the attachments to this summary.
Content of Attachments
1. Qualitative Information on Quarterly Financial Results 2
(1) Analysis of Operating Performance 2
(2) Analysis of Financial Conditions 4
(3) Operating Performance Forecast 4
2. Quarterly Non-Consolidated Financial Statements and Notes 5
(1) Quarterly Non-Consolidated Balance Sheets 5
(2) Quarterly Non-Consolidated Statements of Income 7
(3) Quarterly Non-Consolidated Statements of Cash Flows 8
(4) Notes to the Quarterly Non-Consolidated Financial Statements 10
(Notes Related to the Going Concern Assumption) 10
(Notes in the Events of Significant Changes in Shareholders' Equity) 10
(Application of Special Accounting Treatment for Quarterly Financial Reporting) 10
(Changes in Accounting Policies) 10
(Additional Information) 10
(Segment Information, etc.) 11
1. Qualitative Information on Quarterly Financial Results
(1) Analysis of Operating Performance
The e-book market (the Company's main business category) continued to grow, according to the eBook Marketing Report 2021 by Impress Research Institute. According to this report, the e-book market had a value of ¥482.1 billion in fiscal 2020, up 28.6% from the previous year's figure of ¥375 billion. Comics accounted for 83% of the total, or ¥400.2 billion. The same institute's report for the previous year, the eBook Marketing Report 2020, had forecast that the e-book market would reach a value of ¥444.2 billion in fiscal
2020. The actual figure exceeded this forecast. By fiscal 2025, the institute forecasts that the e-publishing market (including e-books) will grow by approximately 1.4 times larger of fiscal 2020, to ¥674.7 billion.
In this business environment, the Company pursues a mission to make people's lives more fulfilling by bringing a little "something extra" to their daily lives. In the Apps business, the Company has focused mainly on expanding earnings from smartphone manga apps
developed in collaboration with large publishers.
In the Apps business segment, price per advertisement in the Company's mainstay manga apps business trended upward, and the
Company's acquisition of new users slowed down as it cut back on promotional investment. In the entertainment business, fortune-telling performed well, and sales in the Apps business segment were essentially unchanged from the same period of the previous fiscal year. On the other hand, operating income was significantly higher year on year thanks to efficient spending on advertising in the manga apps business.
In the RET business segment, profitability related to the operation of &AND HOSTEL facilities improved significantly as a result of business structure reforms. At the same time, the occupancy rates at these facilities were on the rise thanks to changes in targets and concepts associated with &AND HOSTEL.
In the Other businesses segment, sales decreased year on year because the Company transferred lodging and rental property services during the fiscal year ended August 31, 2021, as part of its efforts to adjust its business portfolio. However, operating income improved due to the Company's withdrawal from unprofitable businesses.
As a result of these activities, in the six months ended February 28, 2022, the Company generated net sales of ¥1,332,199 thousand
(down 10.0% year on year), an operating income of ¥11,090 thousand (operating loss of ¥207,519 thousand in the corresponding period of the previous fiscal year), an ordinary loss of ¥95,606 thousand (ordinary profit of ¥274,322 thousand in the corresponding period of the previous fiscal year), and a net loss of ¥94,622 thousand (net income of ¥276,327 thousand in the corresponding period of the previous fiscal year).
It should be noted that we recategorized our reportable segments effective from the three months ended November 30, 2021.
Accordingly, comparisons and analysis for the six months ended February 28, 2022 are based on the revised segmentation..
(1) Apps business
The Company has observed strong performance from existing manga apps, such as Manga UP!, Manga Park, and Manga Mee, since their launch. This strong performance continued during the six months ended February 28, 2022, thanks to the extended availability of popular content and the addition of new titles.
Earnings contribution also came from the steady increases in monthly active users (MAUs*1) at Young Jump, a manga app jointly developed with SHUEISHA Inc. (released April 2020), and Mecha Comic's Mainichi Rensai, a manga app jointly developed with Amutus Corporation (released May 2020).
At the same time, the COVID-19 pandemic's impact on the overall advertising market took a turn for the worse, and advertising revenue declined amid a downward trend in ARPU*2 from in-app ads.
As a result, in the six months ended February 28, 2022, sales in the Apps business were ¥1,259,092 thousand (down 5.5% year on year). Segment profit came to ¥233,413 thousand (up 61.2% year on year).
*1 The number of people who use an app at least once in a month *2 The average amount of revenue generated per person
Of the smartphone apps the Company operates in the Apps business, the following table outlines average MAUs by quarter for the manga apps.
(Thousands of people)
Date | Average MAUs | Date | Average MAUs |
May 31, 2017 | 310 | November 30, 2019 | 6,410 |
August 31, 2017 | 650 | February 29, 2020 | 7,200 |
November 30, 2017 | 1,080 | May 31, 2020 | 9,060 |
February 28, 2018 | 1,500 | August 31, 2020 | 9,940 |
May 31, 2018 | 2,040 | November 30, 2020 | 10,260 |
August 31, 2018 | 2,380 | February 28, 2021 | 10,540 |
November 30, 2018 | 2,790 | May 31, 2021 | 10,560 |
February 28, 2019 | 3,620 | August 31, 2021 | 11,010 |
May 31, 2019 | 4,300 | November 30, 2021 | 10,460 |
August 31, 2019 | 5,320 | February 28, 2022 | 10,440 |
Note: the average MAUs shown above are quarterly averages.
(2) RET business
In the six months ended February 28, 2022, occupancy rates trended toward recovery for &AND HOSTEL, the Company's mainstay brand of smart hostels (lodging facilities offering experiences made possible through IoT).These positive results compared with the fiscal year ended August 31, 2020, when performance was substantially affected by the COVID-19 pandemic, were a result of changing targets and concepts at some stores and promoting the acquisition of new customer bases, the occupancy rate has been on a recovery trend. However, although the average spend per customer is on a recovery trend, it is still at a low level, and the operating revenue of each store remained flat compared to the same period of the previous year.
The Company made adjustments to agreements associated with a portion of the &AND HOSTEL locations during the fiscal year ended August 31, 2021, and these adjustments resulted in a decrease in rents and other fixed costs stemming from loss-generating locations. Accordingly, losses in the &AND HOSTEL business declined year on year.
Meanwhile, the Company generated real estate-related sales, reporting cases of revenue generated through brokerage fees associated with property sales and an ongoing stream of rental revenue from properties.
Consequently, in the six months ended February 28, 2022, sales in the RET business came to ¥67,615 thousand (up 1.5% year on year), with segment losses of ¥34,290 thousand (loss of ¥101,843 thousand in the previous year).
(3) Other businesses
Sales in the Other businesses segment declined year on year because the Company transferred service operations in the lodging and rental property fields, which were included under the IoT business segment until the fiscal year ended August 31, 2021, to other organizations. However, operating income increased as the Company withdrew from unprofitable businesses.
Meanwhile, the Company continued its ongoing review of plans within the field of entertainment that utilize new technologies not being applied in other business segments.
In the first six months ended February 28, 2022, Other businesses reported sales of ¥5,491 thousand (down 93.2% year on year) and segment losses of ¥13,866 thousand (loss of ¥47,580 thousand in the previous year).
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and factory Inc. published this content on 22 April 2022 and is solely responsible for the information contained therein. Distributed by Public, unedited and unaltered, on 22 April 2022 07:17:10 UTC.