HAPPINET CORPORATION (TOKYO, 7552), one of Japan's leading distributors of toys, video and music software, video games and amusement products, recorded strong earnings growth that exceeded estimates which were revised upwards earlier this year. Consequently, sales, and operating, ordinary and net incomes rose by 3.7%, 70.0%, 67.0% and 78.6% year-over-year to JPY198.0, JPY4.8, JPY5.0, and JPY2.4 billion respectively during fiscal year March 2012 despite negative factors including weak Japanese consumer sentiment in the wake of the Great East Japan Earthquake. The popularity of a number of hit products within the Toy and Amusement Business segments, and structural reforms in the Visual and Music Business contributed to this strong earnings growth. By business segment, strong sales and operating income growth of 11.9% and 29.6% year-over-year in the Toy Business segment, and 26.8% and 34.3% year-over-year in the Amusement Business segment were recorded. At the same time declines in sales of 3.5% and 8.1% year-over-year were incurred in the Visual and Music Business, and Video-game Business segments. Operating income in the Video-game Business declined by 19.0% year-over-year but operating income in the Visual and Music Business actually recovered from a loss of JPY656 million in the previous FY3/11 to an income of JPY448 million during FY3/12.

 
HAPPINET CORPORATION (7552)   FY3/10   FY3/11   FY3/12   yy chg   FY3/13E   yy chg
Sales 194,246 190,891 198,021 3.7% 200,000 1.0%
Operating Income 2,327 2,855 4,855 70.0% 4,300 -11.4%
Margin 1.2% 1.5% 2.5% na 2.2% na
Ordinary Income 2,513 3,013 5,032 67.0% 4,500 -10.6%
Net Income 1,179 1,376 2,458 78.6% 2,500 1.7%
Earnings Per Share 52.30 61.28 109.73 na 111.6 na
Dividend Per Share 30.00 30.00 38.75 na 22.50 na

(Units: Million Yen, EPS and Dividend in Yen, E=estimates)

 

HAPPINET assumes that the difficult market conditions will continue during the coming term, and will undertake various measures to overcome this situation to expand its share of the market. One of these measures will be to fortify its function as a manufacturer of contents through the creation of a structure that will better facilitate the production of original products in the Visual and Music Business segment. Also HAPPINET will work more closely with various toy and amusement product manufacturers to expand its share of the logistics market. Consequently HAPPINET estimates call for sales to rise by 1.0% year-over-year to JPY200.0 billion during FY3/13, while operating and ordinary incomes are expected to decline by 11.4% and 10.6% year-over-year to JPY4.3 and JPY4.5 billion. At the same time net income is expected to rise by a small margin of 1.7% year-over-year to JPY2.5 billion.

HAPPINET CORPORATION was originally founded in 1969 and is now one of the Japan's leading distributors of toys, video and music software, video games and amusement products. The current name HAPPINET was assumed in 1991 when it underwent a merger with two other Bandai wholesalers with the goal of implementing strategies to cope with changing distribution systems to match changes in the market.

Kaoru Hosaka for information regarding HAPPINET CORPORATION
Investment Bridge Co., Ltd.
+81-3-5842-5765 (Japanese correspondence only)
happinet@cyber-ir.co.jp (English and Japanese correspondence)