This is an unofficial translation. In case of any difference in meaning between the original Japanese text and the English translation, Japanese text shall prevail.
Consolidated Summary Report under Japanese GAAP for the third quarter of the fiscal year ending June 30, 2023
April 28, 2023 | |||
Company Name: | AVANT GROUP CORPORATION | Stock exchange listings: Tokyo | |
(Formerly AVANT CORPORATION) | |||
Code Number: | 3836 | URL: https://www.avantcorp.com/ | |
Representative: | (Title) President, Group CEO | (Name) Tetsuji Morikawa | |
For inquiry: | (Title) Director, Group CFO | (Name) Naoyoshi Kasuga | TEL: (03) 6388-6739 |
Securities report issue date: May 12, 2023 | Dividend payment date: | - | ||||||||
Supplementary information for financial statements: Available | ||||||||||
Explanatory meeting to be held: No | ||||||||||
(Millions of yen, rounded down to the nearest unit) | ||||||||||
1. Consolidated Financial Results for the Nine Months Ended March 31, 2023 | ||||||||||
(1) Consolidated results of operations | (Percentages indicate year-on-year changes) | |||||||||
Net sales | EBITDA | Operating profit | Ordinary profit | Profit attributable to | ||||||
owners of the parent | ||||||||||
Nine months ended | % | % | % | % | % | |||||
March 31, 2023 | 16,187 | 17.4 | 3,244 | 13.0 | 2,920 | 11.4 | 2,910 | 13.5 | 1,871 | 19.0 |
March 31, 2022 | 13,786 | - | 2,871 | - | 2,622 | - | 2,565 | - | 1,572 | - |
Comprehensive income (loss) | for the nine months ended March 31, 2023 | 1,921 million yen (19.4%) for the nine months ended March 31, 2022 | 1,609 million yen (-) | |
Net profit per | Diluted net | |||
share | profit per share | |||
Nine months ended | yen | yen | ||
March 31, 2023 | 49.72 | - | ||
March 31, 2022 | 41.80 | - |
(Notes) EBITDA is derived by adding depreciation and amortization of goodwill to operating profit.
The Company has applied the "Accounting Standard for Revenue Recognition" (ASBJ Statement No. 29, March 31, 2020), etc. from the beginning of the first quarter of the fiscal year ended June 30, 2022, and the figures for the nine months ended March 31, 2022 are after the application of the said accounting standard, etc., so the percentage change from the same quarter of the previous year is not stated.
(2) Consolidated financial condition
Total Assets | Net Assets | Equity Ratios | ||
As of | Unit: million yen | Unit: million yen | % | |
March 31, 2023 | 16,699 | 12,064 | 72.2 | |
June 30, 2022 | 16,617 | 10,597 | 63.8 | |
(Reference) Equity | As of March 31, 2023 | 12,064 million yen | As of June 30, 2022 | 10,597 million yen |
2. Dividends on common stock
Dividends per share | ||||||
1st | 2nd | 3rd | Fiscal | Annual | ||
quarter-end | quarter-end | quarter-endyear-end | ||||
yen | yen | yen | yen | yen | ||
Fiscal year ended June 30, 2022 | - | 0.00 | - | 13.00 | 13.00 | |
Fiscal year ending June 30, 2023 | - | 0.00 | - | |||
Fiscal year ending June 30, 2023 (Forecast) | 15.00 | 15.00 | ||||
Revisions to the most recently announced dividend forecast: None | ||||||
(Note) | Breakdown of year-end dividend for the fiscal year ended June 30, 2022: ordinary dividend of 12.00 yen and commemorative dividend of 1.00 yen (25th | |||||
anniversary of the Company's founding) |
3. Consolidated earnings forecasts for the fiscal year ending June 30, 2023
(Percentages indicate year-on-year changes)
Net sales | Operating profit | Ordinary profit | Profit attributable to | Net profit | |||||
owners of the parent | per share | ||||||||
Fiscal Year ending | Unit: million yen | % | Unit: million yen | % | Unit: million yen | % | Unit: million yen | % | yen |
June 30, 2023 | 21,800 | 16.6 | 3,100 | -4.5 | 3,100 | 3.7 | 2,030 | -0.7 | 53.93 |
(Note) | Revisions to the most recently announced earnings forecast: None |
Notes
- Changes in significant subsidiaries during the period (changes in "Specified Subsidiaries" (Tokutei Kogaisha) accompanying changes in scope of consolidation): No
Newly added to the scope of consolidation: nil Newly deleted from the scope of consolidation: nil
- Application of accounting procedures specific to the preparation of quarterly consolidated financial statements: none
- Changes in accounting policies, accounting estimates and restatement:
- Changes in accounting policies due to revision of accounting standards: Yes
- Changes in accounting policies due to reasons other than item (i) above: No
- Changes in accounting estimates: No
- Restatement: No
Note: For details, please refer to "2. Quarterly Consolidated Financial Statements and Major Notes (4) Notes to Quarterly Consolidated Financial Statements (Changes in Accounting Policies)" on page 15 of the attached document.
(4) Number of issued shares (common shares)
- Total number of issued shares including treasury shares
- Number of treasury shares held
- Average number of shares
As of March 31, 2023 | 37,645,851 shares | As of June 30, 2022 | 37,625,501 shares | |
As of March 31, 2023 | 2,998 shares | As of June 30, 2022 | 2,998 | shares |
Nine months ended March 31, 2023 | 37,634,014 shares | Nine months ended March 31, 2021 | 37,611,645 | shares |
- This report is exempt from the audits of CPAs or Audit firms.
- Explanation of the appropriate use of earnings forecasts and other special notes
Forward-looking statements in this report, including earnings forecasts, are based on information currently available to the Company and on certain assumptions deemed to be reasonable. These statements are not promised by the Company regarding future performance. Actual results may differ materially from the forecast depending on a range of factors. Please refer to "Earnings Forecasts" on page 8 for the assumptions for earnings forecasts and notes for using earnings forecasts.
Accompanying Materials - Table of Contents | |
1. Qualitative Information on Financial Results for the Current Quarter | 2 |
(1) Management's Discussion on Business Operations | 2 |
(2) Discussion on Financial Position | 6 |
(3) Earnings Forecasts | 8 |
2. Quarterly Consolidated Financial Statements and Notes | 9 |
(1) Quarterly Consolidated Balance Sheets | 9 |
(2) Quarterly Consolidated Statements of Income and Statements of Comprehensive Income | 11 |
Quarterly Consolidated Statements of Income | 11 |
Quarterly Consolidated Statements of Comprehensive Income | 12 |
(3) Quarterly Consolidated Statements of Cash Flows | 13 |
(4) Notes to Quarterly Consolidated Financial Statements | 15 |
(Notes on the Going Concern Assumption) | 15 |
(Notes on Substantial Changes in the Amount of Shareholders' Equity) | 15 |
(Changes in Accounting Policies) | 15 |
(Additional Information) | 15 |
(Segment Information) | 16 |
(Revenue Recognition) | 17 |
1. Qualitative Information on Financial Results for the Current Quarter
(1) Management's Discussion on Business Operations
Consolidated financial results for the nine months ended March 31, 2023 are as follows.
Net sales
Operating profit
Ordinary profit
Profit attributable to owners of the parent
(Millions of yen, rounded down to the nearest unit)
Nine months ended | Nine months ended | Year-on-Year Change | |
March 31, 2022 | March 31, 2023 | Amount | % |
13,786 | 16,187 | 2,400 | 17.4 |
2,622 | 2,920 | 297 | 11.4 |
2,565 | 2,910 | 345 | 13.5 |
1,572 | 1,871 | 299 | 19.0 |
Consolidated net sales were 16,187 million yen (up 17.4% year-on-year) as a result of steady growth in all three businesses: Group Governance, Digital Transformation, and Outsourcing, as we proactively responded to growing investment needs among Japanese companies, our customers, to maintain and strengthen competitiveness by "upgrading corporate management and activities using data and digital technology," which is becoming a mid- to long-term trend.
The ratio of recurring sales (sales that occur on an ongoing basis, such as software maintenance fees), which is one of the management indicators in the medium-term management plan, was 34.4%, up 0.3 percentage points from the same period of the previous year, as the Outsourcing Business, where the recurring sales ratio is constantly maintained at around 90%, showed a high growth rate, resulting in an increase in the sales composition ratio for the entire Group. Also, total recurring sales continued to grow steadily, increasing 18.6% year-on-year.
As for profits, in addition to increases in fixed personnel expenses due to improved compensation and an increase in headcount following reinforced recruitment efforts to strengthen competitiveness for the purpose of securing human resources, and an increase in outsourced processing expenses in response to increased demand from customers, due to the group reorganization, there were also rebranding expenses reorganization, and costs due to product rationalization and improvement of development environment at the operating companies. However, these factors were offset by the effect of increased sales in each business segment, resulting in operating profit of 2,920 million yen (up 11.4% year-on-year), ordinary profit of 2,910 million yen (up 13.5% year-on-year), and profit attributable to owners of the parent of 1,871 million yen (up 19.0% year-on-year).
The status of each reportable segment is as follows.
(i) Net sales
(Millions of yen, rounded down to the nearest unit)
Nine months ended | Nine months ended | Year-on-Year Change | ||||
March 31, 2022 | March 31, 2023 | Amount | % | |||
Group Governance Businesses | 6,806 | 7,824 | 1,018 | 15.0 | ||
Digital Transformation Business | 5,273 | 6,174 | 900 | 17.1 | ||
Outsourcing Business | 2,252 | 2,773 | 520 | 23.1 | ||
Elimination | of | inter-segment | (545) | (584) | (38) | - |
transactions | ||||||
Consolidated Net sales | 13,786 | 16,187 | 2,400 | 17.4 |
(ii) Operating profit
Group Governance Businesses Digital Transformation Business Outsourcing Business
Corporate Expenses and Elimination of inter-segment transactions Consolidated operating profit
(Millions of yen, rounded down to the nearest unit)
Nine months ended | Nine months ended | Year-on-Year Change | |
March 31, 2022 | March 31, 2023 | Amount | % |
1,554 | 1,517 | (37) | (2.4) |
981 | 1,241 | 259 | 26.5 |
578 | 629 | 50 | 8.8 |
(491) | (466) | 24 | - |
2,622 | 2,920 | 297 | 11.4 |
In the Group Governance Business, net sales increased to 7,824 million yen, up 15.0% from the same period of the previous year. In addition to the core business of consolidated accounting and disclosure solutions, growth in solutions that contribute to group management information control drove growth, with the increase in sales of consulting services being the main reason for the rise in sales during the quarter. Meanwhile, aside from an increase in outsourced processing expenses to meet rising demand, expenses increased for product rationalization and development environment improvement that were conducted simultaneously with the reorganization, resulting in a year-on-year decline of margins and a decrease in the amount of profit. As a result, operating profit was 1,517 million yen (up 2.4% year-on-year).
In the Digital Transformation Business, the need among customers to utilize data for decision making related to management and business promotion continues to accelerate and has shifted to a focus on the provision of cloud data platforms and ever-larger projects. On the other hand, the business intelligence-related development, the traditional core of the business also grew was also strong, resulting in an increase in net sales to 6,174 million yen (up 17.1% year-on-year). Although personnel expenses increased due to higher compensation levels intended to strengthen competitiveness in order to secure staff, this was offset by the effect of higher sales, and operating profit was 1,241 million yen (up 26.5% year-on-year), significantly higher than the same period a year earlier.
In the Outsourcing Business, while continuing to maintain high net sales growth rates, recurring sales continued to build steadily, resulting in net sales increasing to 2,773 million yen (up 23.1% year-on-year). In terms of profitability, factors that increased costs, such as the promotion of personnel hiring and increased office space to achieve sustainable growth in the future, led to margins declining from the year earlier period, but due to sales growth operating profit increased to 629 million yen (up 8.8% year-on-year).
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Avant Corporation published this content on 28 April 2023 and is solely responsible for the information contained therein. Distributed by Public, unedited and unaltered, on 28 April 2023 06:16:06 UTC.