Central Security Patrols Co (9740) Q2 2024 earnings summary

Executive summary

• H1 FY2024 revenue and operating profit rose YoY, with G7 Hiroshima Summit-related security work contributing to growth; net income reached a record, supported by a policy-share sale.

• H1 revenue was below the June 30 forecast, while each profit measure exceeded forecast.

Financial highlights

• Revenue ¥33,700 million, up 5.9% YoY; operating income ¥2,227 million, up 15.0%; operating margin 6.6%, up 0.5 percentage points.

• Ordinary income ¥2,336 million, up 8.0% YoY; net income attributable to owners of parent ¥4,461 million, up 256.1%; EPS ¥305.77, up ¥219.90.

• Net income included gains from the sale of policy-held shares, including shares in Relia; net income reached a record high.

Outlook and guidance

• FY2026/2 medium-term targets: revenue ¥80,000 million, operating income ¥6,800 million and operating margin 8.5%.

• Growth initiatives include expanding image-analysis services and machine security through M&A, winning equipment installation projects, raising prices on existing onsite contracts and improving productivity to contain SG&A.

• JR East-related revenue is expected to recover in FY2024/2, supported by the summit and other events, after a prior-year decline following the Olympics and Paralympics.