Nihon M&A Center (2127) Q1 2025 earnings summary

Executive summary

• Q1 FY2024 sales were ¥7,638 million, down 7.4% year-over-year, with ordinary profit at ¥1,546 million, down 5.7% year-over-year, and transactions closed fell to 191.

• Average M&A sales per transaction rose 15.1% year-over-year to ¥38.5 million, and new sell-side mandates increased 14.6% to 321, indicating future growth potential.

• Strategic investments in direct marketing, human resources, and digital transformation are expected to drive mid- and long-term growth.

• Organizational restructuring included appointing 14 new general managers and over 40 group leaders.

• The company maintains a strong market position, recognized by Guinness World Records for transaction volume and aiming to be the top global integrated M&A company.

Financial highlights

• Gross profit margin was 49.4%, a slight decrease of 0.6pt year-over-year, while ordinary profit margin improved to 20.2% from 19.9%.

• Net profit for Q1 was ¥884 million, down 3.2% year-over-year, and profit attributable to owners of parent dropped 6.0% to ¥869 million.

• Cost of sales and SG&A declined by 9.8%, while advertising and promotion costs rose 5.3%.

• Total assets at quarter-end were ¥51,217 million, with net assets of ¥41,326 million and capital adequacy ratio at 80.5%.

• Dividend per share for Q1 was ¥11.00, with a full-year forecast of ¥29.00 and a payout ratio of 83.6%.

Outlook and guidance

• Full-year FY2024/FY2025 sales forecast is ¥48,900 million (+10.6%/10.8%), with ordinary profit of ¥17,000 million (+2.9%) and operating profit projected at ¥19,500 million (+1.7%).

• Profit and sales are expected to be weighted toward H2, reflecting the impact of new management and marketing initiatives.

• Mid-term plan targets ordinary profit of ¥30.5 billion by FY2027.

• Confidence in achieving H1 targets is high, though not guaranteed.

• Basic earnings per share for the year is expected to be ¥34.68.