SHO-BOND Holdings (1414): FY2025 Results Summary — 14th Straight Year of Profit Growth as Revenue Dips

This article is based on publicly available IR materials and is not a recommendation to buy or sell any specific securities.

Note: SHO-BOND Holdings’ fiscal year ends on June 30. The company labels the year ended June 30, 2026 as “FY2026” and the year ending June 30, 2027 as “FY2027”; the text and tables below keep the company’s own labels. In the fiscal year ended June 30, 2026, the SHO-BOND Group posted net sales of 89,204 million yen, down 1,507 million yen (-1.7%) year on year — described in the materials as the first decline in revenue in 12 years. Operating profit still edged up to 20,831 million yen (+36 million yen, +0.2%) and profit attributable to owners of parent rose to 15,439 million yen (+378 million yen, +2.5%), marking the 14th consecutive year of profit growth. The company also expects a 17th consecutive year of dividend increases while maintaining a dividend payout ratio of 60%.

Consolidated Results (Full-Year Actual)

Construction orders totaled 71,096 million yen, a decrease of 2,815 million yen (down 3.8%) year on year. The company states the result fell short of its full-year forecast due to the low level of orders from expressway companies. Construction sales totaled 80,296 million yen, a decrease of 2,144 million yen (down 2.6%), while sales of construction materials increased by 636 million yen (up 7.7%) to 8,907 million yen, supported by steady sales of earthquake-resistant products and pipe couplings. The gross profit margin for construction projects was 29.0%, exceeding the 28.3% recorded in FY2025; the company attributes this to maintaining profitability at the time of order placement through selective order acceptance and to securing design changes at a level similar to the previous period. The gross margin on construction materials was 38.2% against 38.5% a year earlier, which the company says reflects a strengthened supply chain through increased collaboration with external partners despite concerns over the Middle East crisis. On a consolidated basis the total gross margin was 29.9% (29.2% in FY2025), the operating margin 23.4% (22.9%) and the net margin 17.3% (16.6%). ROE was 14.6%, against 14.5% in FY2025.

Item (Million Yen)	FY2026 (Result)	FY2025 (Result)	Change	Change (%)
Orders	80,004	82,182	-2,178	-2.7%
Orders — Construction	71,096	73,911	-2,815	-3.8%
Orders — Construction Materials	8,907	8,271	636	7.7%
Order Backlog (end of period)	72,498	81,698	-9,200	-11.3%
Sales	89,204	90,712	-1,507	-1.7%
Sales — Construction	80,296	82,441	-2,144	-2.6%
Sales — Construction Materials	8,907	8,271	636	7.7%
Gross Profit	26,686	26,503	182	0.7%
Selling, General and Administrative Expenses	5,855	5,709	145	2.6%
Operating Profit	20,831	20,794	36	0.2%
Ordinary Profit	21,485	21,139	345	1.6%
Profit before Income Taxes	22,572	21,801	771	3.5%
Total Income Taxes	7,061	6,765	295	–
Profit Attributable to Owners of Parent	15,439	15,061	378	2.5%

Construction Orders, Sales and Order Backlog by Client

SHO-BOND Holdings does not report business segments; instead it breaks down construction orders, sales and order backlog by client. Orders from the Ministry of Land, Infrastructure, Transport & Tourism rose to 13,109 million yen from 8,370 million yen, while orders from local governments fell to 14,299 million yen from 19,030 million yen. Orders from expressway companies declined to 40,449 million yen from 42,491 million yen, with NEXCO EAST down 9,378 million yen to 8,914 million yen, partly offset by NEXCO CENTRAL (12,512 million yen, up 5,209 million yen) and Metropolitan Expressway (4,532 million yen, up 2,725 million yen). Total construction order backlog at the end of the period stood at 72,498 million yen, down 9,200 million yen from 81,698 million yen a year earlier.

Client (Million Yen)	Orders FY2026	Orders FY2025	Construction Sales FY2026	Construction Sales FY2025	Order Backlog (end) FY2026
The Ministry of Land, Infrastructure, Transport & Tourism	13,109	8,370	10,798	12,039	6,950
Local Governments	14,299	19,030	16,318	16,740	9,135
— Tokyo Metropolitan Government	3,257	6,447	4,296	3,678	3,836
Expressway Companies	40,449	42,491	49,391	50,042	54,827
— NEXCO EAST	8,914	18,293	20,074	20,829	17,434
— NEXCO CENTRAL	12,512	7,303	9,008	8,426	11,985
— NEXCO WEST	9,462	7,862	10,628	12,696	8,861
— Metropolitan Expressway	4,532	1,807	2,391	1,715	4,153
— Hanshin Expressway	3,781	5,252	5,379	5,919	8,594
— Others	1,245	1,972	1,909	453	3,798
Private Sector, etc.	3,236	4,018	3,788	3,618	1,584
Total	71,096	73,911	80,296	82,441	72,498

FY2027 Forecast

For FY2027 the company projects net sales of 90,000 million yen, operating profit of 21,000 million yen and profit attributable to owners of parent of 15,500 million yen. It notes that this plan falls short of the target for its medium-term business plan but that it expects to secure profits at a level similar to FY2026. Project contracts (orders) are expected to reach 95,000 million yen, based on an anticipated recovery in orders for seismic reinforcement work at NEXCO East, where order volumes remained low in FY2026. Forecast ROE is approximately 14.4%.

Item (Million Yen)	FY2027 (Forecast)	FY2026 (Result)	Change	Change (%)
Orders	95,000	80,004	14,995	18.7%
Orders — Construction	85,500	71,096	14,403	20.3%
Orders — Construction Materials	9,500	8,907	592	6.6%
Order Backlog (end of period)	77,498	72,498	5,000	6.9%
Sales	90,000	89,204	795	0.9%
Sales — Construction	80,500	80,296	203	0.3%
Sales — Construction Materials	9,500	8,907	592	6.6%
Gross Profit	27,000	26,686	313	1.2%
Selling, General and Administrative Expenses	6,000	5,855	144	2.5%
Operating Profit	21,000	20,831	168	0.8%
Ordinary Profit	21,600	21,485	114	0.5%
Profit Attributable to Owners of Parent	15,500	15,439	60	0.4%

Balance Sheet and Cash Flows

Total assets stood at 129.9 billion yen as of June 30, 2026, against 129.2 billion yen a year earlier, with net assets of 108.4 billion yen (106.4 billion yen). Cash and deposits decreased by 6.8 billion yen to 25.8 billion yen, reflecting operating activities of +19.3 billion yen and sales of investment securities of +1.6 billion yen against purchases of securities of -11.5 billion yen, dividends paid of -9.8 billion yen, purchase of own shares of -5.0 billion yen and purchase of non-current assets of -1.3 billion yen. Notes receivable, accounts receivable from completed construction contracts and other fell 6.0 billion yen to 59.5 billion yen. Retained earnings rose 5.6 billion yen to 86.1 billion yen, and treasury shares increased by 5.0 billion yen to -17.2 billion yen. For FY2026, cash flows from operating activities were 19.33 billion yen and cash flows from investing activities were 0.24 billion yen, giving free cash flows of 19.57 billion yen, while cash flows from financing activities were -14.87 billion yen.

Shareholder Returns

The annual dividend for FY2026 was 45.75 yen per share (interim 20.50 yen, year-end 25.25 yen), against 43.875 yen for FY2025, with a dividend payout ratio of 60.1% and a total return ratio of 92.1%. Purchases of treasury shares amounted to 5.00 billion yen. For FY2027 the company forecasts an annual dividend of 46.50 yen per share (interim 21.00 yen, year-end 25.50 yen), a payout ratio of 60.1%, a total return ratio of 91.8% and a further 5.00 billion yen of treasury share purchases. Note that the company conducted a four-for-one stock split of its common shares effective January 1, 2026, and the dividend-per-share figures are adjusted as if the stock split had been executed at the beginning of each fiscal period presented.

Item	FY2026 (2026 Jun.)	FY2025 (2025 Jun.)	FY2027 (Forecast)
Interim Dividend	¥20.50	¥16.00	¥21.00
Year-end Dividend	¥25.25	¥27.875	¥25.50
Total Dividend per Share	¥45.75	¥43.875	¥46.50
Dividend Payout Ratio	60.1%	60.1%	60.1%
Total Return Ratio	92.1%	93.0%	91.8%
Purchase of Treasury Shares (Billion Yen)	5.00	5.00	5.00

Medium-Term Business Plan and Topics

Under Medium-term Business Plan 2027, disclosed on August 9, 2024, the basic policy is “Enhancing corporate value in pursuit of economic efficiency and social progress.” The plan targets sales of 100.0 billion yen, operating profit of 22.0 billion yen, profit attributable to owners of parent of 15.6 billion yen and ROE of approximately 14.5% for FY2027, with a dividend payout ratio of 60% and a total return ratio of 90%. On capital policy, the company shows a reduction of cross-shareholdings of 25 billion yen on a two-year total basis and a further 5 billion yen for FY2027, against a plan of 30 billion yen on a three-year total basis; the cross-shareholdings price has been calculated based on the respective stock prices at the end of June 2024.

On business strategy, a demonstration project for the institutionalization and market development of bridge rehabilitation technologies in India was selected for the Ministry of Economy, Trade and Industry’s “Global South Future-Oriented Co-creation Project Subsidy (Small-Scale Demonstration).” A joint proposal involving main subsidiary SHO-BOND CORPORATION was selected for MLIT’s FY2026 “Private Sector Proposal-Based Public-Private Partnership Modeling Project.” Through stronger sales activity and collaboration with MITSUI & CO., both project contracts and sales outside of the road construction sector increased by more than 20% compared to the previous period. On the human capital side, the number of employees reached 1,068 as of the end of June 2026, wage increases of 3% or more were implemented for the fifth consecutive year, and the employee turnover rate for FY2026 remained low at 2.4%. The company also set a greenhouse gas reduction target for FY2030 (ending June 2031) and obtained SBT certification from the SBT Initiative (SBTi) on July 6, 2026.

This article is an analysis based on publicly available information and is not a recommendation to buy or sell any specific securities. Investment decisions are your own responsibility.