Recap of Mid-term Plan
"Seamless Growth 2020"

Text Size
  • A
  • A

"Seamless Growth 2020"(December 1, 2017 - November 30, 2020)

The Tosei Group has developed "Seamless Growth 2020", its medium-term management plan for the period from December 1, 2017 to November 30, 2020. We strive to establish new income-generating business, while targeting further growth of the five existing businesses and increases in their operating profit, and aiming for sustainable growth and expansion of business scale.

Fundamental Policy

Growth Strategy

Achieve further growth in the existing five businesses

Establish new profit-making businesses in addition to the existing five businesses

Strengthen the Business Base

Improve financial conditions to support the expansion of business scale

Strengthen optimum corporate governance

Increase employee satisfaction, strengthen organizational capabilities and improve productivity

Enhance Tosei's brand value

Performance Indicator Guidance

Profit Growth(consolidated)

Revenue for the final fiscal year(November 30, 2020)
¥100 billion
(FY2017 1.7 times

Profit before tax for the final fiscal year(November 30, 2020)
¥12 billion
(FY2017 1.3 times

Average profit growth rate of the three years
10% or more

Average ROE of the three years
12% or more

Financial Soundness

Expansion of the ratio of Stable Businesses

(Gross profit Margin:achieve 50/50 weight balance between Trading Business and Stable Business*)

*Established Hotel Business as a new segment in FY2019.Of the six existing business segments, the Revitalization Business and the Development Business are defined as the “trading business” and the Rental Business, the Fund and Consulting Business, the Property Management Business and Hotel Business are defined as the “stable business.” Underthis plan, gross profit of the trading business excludes selling expenses pertaining to property trading.

Past achievements and Forcast

 Results for FY2018

In the Revitalization Business, the Group made steady progress in selling assets such as income-generating office buildings and apartments, while in the Development Business, the Group pushed ahead with sales of condominiums and detached houses. In addition, other than usual acquisition methods, the Group also utilized an acquisition method of M&A, proactively acquiring income-generating properties and land for development as future sources of income. As a result, consolidated revenue for the fiscal year under review totaled ¥61,543 million (up 6.6% year on year), operating profit was ¥10,875 million (up 10.6%), profit before tax was ¥10,171 million (up 12.4%), and profit for the year was ¥6,852 million (up 11.3%).

 Results for FY2019

Earnings growth was otherwise substantial with operating profit up by 16.7% year on year to ¥12,690 million, profit before tax up by 18.9% year on year to ¥12,090 million, and profit for the year up by 23.3% to ¥8,447 million. The gains are attributable to factors such that: the Revitalization Business made progress in selling off high-margin properties; the Development Business completed and sold off large, high-margin condominiums; and, the Fund and Consulting Business increased asset management fees reflecting growth in assets under management, and boosted revenues generated by business fees for property acquisitions and dispositions of funds under management. In terms of earnings, the Company was one year ahead of schedule in achieving its ¥12 billion target for consolidated profit before tax in the final fiscal year of its “Seamless Growth 2020” medium-term management plan currently in progress.

 Performance Forecast for FY2020 (As of May 31,2020)

With the persistence of the COVID-19 epidemic, investors who until recently were keenly involved in real estate investment are exhibiting an increasingly cautious attitude, and changes have also been evident in the attitude of loan assessments at some financial institutions. Tosei has decided to postpone sales of some properties in the Revitalization Business and Development Business, originally planned for sale during the second half of the fiscal year ending November 30, 2020, until the next fiscal year or later. The Company considers it appropriate to make these sales at a time when the market has regained some degree of liquidity. As a result, the Company revised its full-year revenue forecast to ¥64,897 million, down ¥15,456 million from the previous forecast. Furthermore, due to the valuation loss of ¥7,680 million recorded for the three months ended May 31, 2020, the Company revised the full-year operating profit forecast to ¥4,680 million, down ¥9,056 million from the previous forecast, the full-year profit before tax forecast to ¥4,070 million, down ¥8,976 million from the previous forecast, and the full-year profit for the year forecast to ¥2,411 million, down ¥6,396 million from the previous forecast.

(¥ million)

(2Q forecast)
% % % %
Revenues 57,754 100.0 61,543 100.0 60,727 100.0 64,897 100.0
Operating profit 9,833 17.0 10,875 17.7 12,690 20.9 4,680 7.2
Profit before tax 9,049 15.7 10,171 16.5 12,090 19.9 4,070 6.3
Profit for the year 6,155 10.7 6,852 11.1 8,447 13.9 2,411 3.7