JP-HOLDINGS (2749): FY2025 Results Summary — Record Highs Lift Operating Margin to 15.1%

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

Note: JP-HOLDINGS, INC. labels this fiscal year “FY 3/26” (the fiscal year ended March 31, 2026); on this site it is classified as FY2025, and the labels used in the text and tables below follow the company’s materials.

JP-HOLDINGS, INC. (Prime Market, 2749), the operator of the Japan Nursery Service group of nursery schools, school clubs and children’s houses, reported record highs for both sales and profit in FY 3/26. Net sales rose 5.3% year on year to 43,325 million yen and operating income rose 12.5% to 6,533 million yen, lifting the operating income margin to 15.1%. The company states that the operating income target set for FY 3/28, the final year of its Medium-term Management Plan, was achieved earlier than forecast, and it has rolled the plan forward to cover FY 3/27 to FY 3/29.

Consolidated Results (Full-Year Actual)

The company attributes the increase in net sales to being entrusted with the operation of new facilities, an increase in the number of infants, a higher subsidy reflecting a significant improvement in the working conditions of its nursery school teachers, and measures taken to maximize the amounts of subsidies received. Operating income increased despite expenses for the shareholder benefits program and systematization adopted at the end of the previous fiscal year. Net income attributable to owners of parent rose 9.3% even though the previous fiscal year included 201 million yen of extraordinary income from compensation relating to the relocation of the head office.

Item (unit: million yen)	FY 3/25 Results	FY 3/26 Results	Y/Y Change
Net sales	41,147	43,325	5.3%
Gross profit	8,686	9,559	10.0%
Gross profit margin	21.1%	22.1%	1.0%
SG&A	2,877	3,025	5.1%
SG&A ratio	7.0%	7.0%	0.1%
Operating income	5,809	6,533	12.5%
Operating income margin	14.1%	15.1%	1.0%
Ordinary income	5,858	6,617	13.0%
Ordinary income margin	14.2%	15.3%	1.0%
Extraordinary income	217	0	–
Extraordinary loss	5	18	–
Net income	3,920	4,284	9.3%
Net income margin	9.5%	9.9%	0.4%

Results also came in above the company’s own plans. Against the revised earnings forecast for FY 3/26 of 42,226 million yen in net sales, 5,998 million yen in operating income, 6,070 million yen in ordinary income and 3,921 million yen in net income, the actual results reached 102.6%, 108.9%, 109.0% and 109.3% respectively. Compared with the earnings forecasts made at the beginning of the term, the company states that sales rose 3.4%, operating income grew 15.6% and ordinary income increased 16.0%. Note that in the results table on page 8 of the presentation the headings of the two right-hand columns appear transposed relative to the values shown; the year-on-year growth rates above follow the figures confirmed elsewhere in the same material.

Drivers of the Year-on-Year Change

The company breaks down the 2,178 million yen increase in net sales and the 724 million yen increase in operating income as follows (unit: million yen, rounded down to the nearest million yen).

Net sales factor	Y/Y increase/decrease
Undertaking of operation of new facilities	+649
Increase of infants	+227
Increase of facilities managed as a designated administrator, leasing of dormitories, etc.	+158
Improvement of treatment and revision to unit prices	+1,266
Fees and lessons	+35
Merchandizing and others	+2
Transfer of the business of dispatching foreign workers (part of the worker dispatch business)	-159
Total increase in net sales	+2,178
Total increase in cost of sales	+1,306
Total increase in gross profit	+872
Total SGA	+147
Operating income	+724

Balance Sheet and Cash Flows

Total assets stood at 38,209 million yen at the end of March 2026, while total liabilities fell to 15,273 million yen on the repayment of long-term loans payable. Net assets rose to 22,935 million yen and the shareholders’ equity ratio improved to 60.0% from 51.9%.

Item (unit: million yen)	End of Mar. 2025	End of Mar. 2026	Change
Total current assets	26,862	27,963	1,100
(Cash and deposits)	20,743	22,619	1,875
Total fixed assets	10,760	10,245	△514
Total assets	37,622	38,209	586
Total current liabilities	11,175	10,814	△361
Total fixed liabilities	6,938	4,458	△2,479
(Long-term loans-payable)	5,300	2,797	△2,502
Total liabilities	18,114	15,273	△2,840
Total net assets	19,508	22,935	3,427
Shareholders’ equity ratio	51.9%	60.0%	–
Cash flows from operating activities	4,205	6,268	2,062
Cash flows from investing activities	△162	49	212
Free cash flow	4,043	6,317	2,274
Cash flows from financing activities	△4,243	△4,441	△197

Facilities

As of March 31, 2026 the group operated 345 facilities in total: 203 nursery schools, 6 childcare centers, 118 school clubs, 16 children’s houses and 2 community centers. Openings on April 1, 2025 comprised 25 school clubs and children’s houses, alongside conversions of existing licensed nursery schools into 5 bilingual nursery schools, 2 sports nursery schools and 2 certified childcare centers. Following further openings and conversions on April 1, 2026, the total reached 357 facilities as of the end of April 2026, including 12 school clubs certified by the Tokyo Metropolitan Government and 1 international school.

FY 3/27 Forecast

For FY 3/27 the company forecasts modest growth across the income statement. It cites as positive factors an increased number of new school clubs and children’s houses entrusted to it, new education programs, and expected new increases in subsidies; and as negative factors the ongoing decline in the number of births, a decline in subsidies given for helping deal with soaring prices, higher prices of rice and other ingredients, and intensifying regional competition.

Item	Results for FY 3/26	Full-year forecast for FY 3/27	Change	Rate of change (%)
Net sales (million yen)	43,325	44,017	691	1.6
Operating income (million yen)	6,533	6,600	66	1.0
Ordinary income (million yen)	6,617	6,686	68	1.0
Net income attributable to owners of parent (million yen)	4,284	4,341	56	1.3
Net income per share (yen)	50.07	50.70	0.63	－
Dividend per share (yen)	12.50	13.50	1.0	－
Dividend payout ratio (%)	25.0	26.6	1.6	－
Expected opening of nursery school (school)	0	0	0	－
International School (school)	0	1	1
Expected undertaking of children’s club, children’s house, etc. (facility)	25	14	△11	－

Shareholder Returns

For FY 3/26 the dividend was increased to 12.5 yen per share, up 0.5 yen from the 12.0 yen forecast at the beginning of the term, with the dividend payout ratio revised to 25.0%. The term-end dividend for FY 3/26 is the dividend per share approved at the 34th annual meeting of shareholders. For FY 3/27 the company plans a dividend of 13.5 yen per share, up 1.0 yen year on year, for a payout ratio of 26.6%. Its stated policy is to return profit to shareholders with the aim of achieving a payout ratio of 30%, revising dividends when necessary in light of business performance. A shareholder benefit program adopted in March 2025 provides QUO cards worth 20,000 yen per year, twice a year at the end of March and the end of September, on condition that shares have been held continuously.

Rolling of the Medium-Term Management Plan

Because the operating income target for FY 3/28 was reached two years ahead of plan, the company has revised the Medium-term Management Plan to cover FY 3/27 to FY 3/29, excluding M&A, in light of the declining birth rate, intensifying competition and progress with new businesses. Under the revised plan, the FY 3/29 consolidated forecast is net sales of 46,363 million yen, up 7% from FY 3/26, operating income of 6,900 million yen and an operating income margin of 14.9%. Quantitative targets include ROE of 18% or higher, PBR of 3 or over and a payout ratio of 30%, with a long-term management vision of consolidated net sales of 100 billion yen. Priority initiatives are the monetization of new businesses and expansion of business scale (overseas expansion, the ALT business and international schools), structural reform to maintain revenue from the childcare business together with more entrusted school clubs and school clubs certified by the Tokyo Metropolitan Government, and more active promotion of M&A.

Item (unit: million yen)	FY 3/26 Results	FY 3/27 Forecast	FY 3/28 Forecast	FY 3/29 Forecast
Net sales	43,325	44,017	45,408	46,363
Compared with forecast in the previous year	–	1.6%	3.2%	2.1%
Operating income	6,533	6,600	6,750	6,900
Operating income margin	15.1%	15.0%	14.9%	14.9%
Ordinary income	6,617	6,686	–	–
Ordinary income margin	15.3%	15.2%	–	–
Net income	4,284	4,341	–	–
Net income margin	9.9%	9.9%	–	–

Capital Cost and Capital Efficiency

The company reports ROE of 20.2%, above its cost of shareholders’ equity of 5.09%, giving a positive equity spread. PBR exceeds 1, standing at 2.98 at the end of March 2025 and 2.71 on April 6, 2026. The shareholders’ equity ratio rose to 60.0% at the end of March 2026. The company notes that its PER is low compared with competitors’ and that it will strengthen measures including IR activities, and that under a Du Pont analysis financial leverage is forecast to decline, so it intends to create new businesses as soon as possible in order to improve profit margin further.

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.