Operating Results for the Fiscal Year Ended October 31, 2017 (FY2017)
During the current consolidated fiscal year (November 1, 2016 to October 31, 2017), corporate earnings and business sentiment improved in Japan as the long-term policy of monetary easing continued. In this environment, the employment and personal income were both strong.
Overseas, economies expanded in Europe and the United States as well as in China and other emerging countries. However, there were concerns about an economic downturn in Japan due to policies of the U.S. government and geopolitical risk, mainly associated with the Korean Peninsula. As a result, there was uncertainty during the fiscal year about the economic environment in Japan and around the world.
In the wedding industry, the number of weddings in Japan in 2016 was 621,000 (Ministry of Health, Labour and Welfare, 2016 Annual Estimate of Vital Statistics), down 14,000 from 2015. Although the number of weddings and receptions is decreasing slowly as the prime wedding age population declines, the guest house wedding market is still generally healthy.
Differentiating wedding services from those of competitors by using distinctive wedding styles and services is becoming increasingly difficult. During the fiscal year, we took many actions in line with the IKK Group’s philosophy of “touching our customers’ hearts.” There were internal and external employee training activities to give our people the personal strengths and customer interaction skills needed to provide personalized wedding services. In addition, we used our own sales support system to analyze operating data and used many initiatives at wedding facilities to attract more customers.
To capture a larger share of Japan’s wedding market, we are working on building an infrastructure capable of quickly meeting the increasingly diverse needs and expectations of customers and using an introduction system for maintaining a cycle in which we receive new customer referrals from current customers. All these actions are aimed at sales and earnings growth.
As a result, net sales increased 1.5% from one year earlier to 18,172 million yen, operating profit decreased 16.3% to 1,821 million yen, ordinary profit decreased 15.7% to 1,825 million yen, and profit attributable to owners of parent decreased 1.6% to 1,319 million yen.
Although the number of weddings at existing locations increased, earnings were affected by expenses for opening new branches and higher personnel expenses. As a result, sales were 17,383 million yen, up 1.0% from one year earlier and operating profit decreased 19.0% to 1,767 million yen.
Sales increased 16.6% from one year earlier to 322 million yen and there was operating profit of 20 million yen compared with a 10 million yen loss one year earlier.
Sales increased 8.6% from one year earlier to 470 million yen and there was operating profit of 30 million yen compared with a 1 million yen profit one year earlier. The occupancy rate was more than 90% at all three nursing-care facilities.