Gakken Holdings (9470) Q3 2024 earnings summary

Executive summary

• Net sales for the nine months ended June 30, 2024, reached ¥138.1B, up 15.7% year-over-year, driven by strong Healthcare, Nursing, Education, and workforce development performance, as well as consolidation of new subsidiaries.

• Operating profit rose 56.0% year-over-year to ¥5.15B, benefiting from increased revenue, textbook revisions, workforce development, and restructuring of unprofitable businesses.

• Net profit attributable to owners increased 62.3% year-over-year to ¥1.87B, reflecting higher operating profit.

• Selected for inclusion in the FTSE Blossom Japan Sector Relative ESG index.

• EPS for the nine months was ¥43.72, up from ¥26.20 in the prior year.

Financial highlights

• EBITDA grew 49.3% year-over-year to ¥8.22B.

• Ordinary profit increased 46.8% year-over-year to ¥5.11B, despite lower equity method profit and reduced FX losses.

• Gross profit increased to ¥37.18B from ¥33.76B year-over-year.

• Equity ratio improved to 39.1% despite a ¥2B share buyback, supported by increased net profit.

• Total assets decreased to ¥132.52B (–2.8%), mainly due to reduced fixed assets and investment securities.

Outlook and guidance

• Full-year forecast (ending September 30, 2024): net sales ¥185B (+12.7% YoY), operating profit ¥6.4B (+3.7%), ordinary profit ¥6.6B (+1.9%), net income attributable to owners ¥2.7B (–15.5%), EPS ¥63.09.

• Continued investment in global and digital growth areas is planned.

• Aggressive pace of new facility openings in Healthcare and Nursing, with 39 new elderly housing and group homes opened by 3Q.

• No change to previously announced guidance; impact from long-term care insurance fee revision deemed negligible.