■Performance Trends of NCN ＜7057＞
Sales in the environmental design field were 247 million yen (up 16.0% from the previous fiscal year). The number of shipments of primary energy statements for wooden houses, apartment complexes, and non-residential wooden properties was 2,887 (15.6% increase from the same period) by providing services in conjunction with consulting services related to receipt of subsidies for the energy efficiency of houses, which became mandatory to explain from 2021/4. According to the company, renovation properties are also increasing in addition to conventional detached houses, apartment complexes, and facility construction as target properties for housing energy saving calculations, and an increase in demand related to the renovation of existing houses as a countermeasure against vacant houses can also be expected in the future.
Also, support work for ZEB certification for non-residential housing began in the 2024/3 fiscal year, and 2 certification support cases were implemented and subsidy applications were made.
Sales in the DX and other fields were 103 million yen (down 26.1% from the previous fiscal year). MAKE HOUSE, a subsidiary that develops and develops IT solutions for wooden buildings, carried out human resource development for business expansion based on the “MAKE HOUSE BIM BASE (MAKE HOUSE BIM BASE)” established in October 2021, and proceeded with sales activities for the high image quality architectural space simulation service “MAKE ViZ” utilizing BIM technology, but large-scale spot projects recorded for the fiscal year ending 2023/3 There was no monthly period, so sales declined.
Also, as described above, 60% of SE Mortgage Service shares held in 2023/7 were transferred to public holdings. Public Holdings Group companies handle “Flat 35” as agents for the same Credit Saison as SE mortgages, and is also developing housing finance agency businesses such as bank agencies and insurance services such as fire insurance. The loan execution amount for “Flat 35” has reached 300 billion yen or more, and in 2022 results, there are approximately 1,000 mortgage loan applications and an agency record of approximately 700 cases. The company aims to expand its business by strengthening the financial support system for registered construction stores through cooperation with public holdings.
In response to the wood shock where timber was scarce and the Russia-Ukraine conflict, there were movements by trading companies and the like to actively procure timber due to supply unease, but as the commencement of construction of newly built housing has decreased, supply and demand are easing. In the United States, housing investment has declined due to the effects of rising long-term interest rates, and Chicago (CME) timber futures are currently shifting from around 1,670 US dollars in 2021/5 to around 500 US dollars, and as a result, they have remained at the level before the spread of the novel coronavirus infection (hereinafter, COVID-19). Trading companies and manufacturers, etc. that increased inventory in large quantities during the wood shock are expected to have made considerable profits, but as demand for housing began to weaken and inventories are bursting out, we believe that an impact is inevitable.
The company procures all structural laminated lumber from domestic manufacturers, and since Mr. Taguri, the company's president, has experience importing lumber from the United States, Canada, and New Zealand in the timber department of a trading company, he also has a wealth of knowledge about timber distribution, and has great strengths in dealing with wood shocks. In fact, there is a history of procuring only the right amount without accumulating excessive inventory under the wood shock. Although the import price index for timber, wood products, forest products, plywood, laminated lumber, etc. is still at a high level, the company's strengths have been utilized as a feeling of peaking out has been seen.
Furthermore, in the revised Building Energy Conservation Law that came into effect in April 2021, it became mandatory for newly built non-residential buildings (total floor area of 300 m2 or more) to conform to energy saving standards. When compliance with energy saving standards becomes mandatory, insulation materials for exterior walls, installation of highly insulating windows, introduction of high-efficiency air conditioning and light emitting diode (LED) lighting, etc. are required. Also, “proper energy saving judgment” has become essential for medium-sized non-residential houses, and energy saving calculation has been added as an essential task to new construction plans.
The company has carried out energy saving calculations since more than 10 years ago, and is proud of the track record of many calculations. Based on abundant experience, it is expected that it will demonstrate an advantage in responding to the obligation to explain energy saving performance, and we believe that sales growth in the same segment will continue to grow in the future.
3. financial status
(1) Financial position
Total assets were 5,722 million yen, down 1,126 million yen from the end of the previous fiscal year. This is mainly due to a decrease of 655 million yen in cash and deposits, 140 million yen in accounts receivable, and 272 million yen in paid unpaid income, respectively. Total liabilities were 3,578 million yen, a decrease of 1,007 million yen from the same period. This is mainly due to a decrease in accounts payable by 730 million yen, unpaid accounts by 160 million yen, and long-term loans by 87 million yen, respectively. Total net assets were 2,144 million yen, a decrease of 118 million yen from the same period. This is mainly due to a decrease of 118 million yen in retained earnings due to payment of dividends.
(2) Cash flow situation
Cash and cash equivalents at the end of the 2024/3 fiscal year ended were 2,195 million yen, a decrease of 655 million yen from the end of the previous fiscal year.
Cash flow from operating activities was expenditure of 144 million yen (revenue of 61 million yen in the previous fiscal year). The main factors are a decrease of 358 million yen in sales receivables and a decrease of 754 million yen in purchase debt. Originally, in the construction industry, the purchase debt turnover period is longer compared to the sales debt turnover period, so it is due to the fact that in a phase where sales decline, purchase debt exceeds sales receivables and declines.
Cash flow from investment activities was expenditure of 277 million yen (expenditure of 188 million yen in the previous fiscal year). The main factors are expenditure of 51 million yen due to acquisition of tangible fixed assets, 128 million yen of expenditure due to acquisition of intangible fixed assets, and 130 million yen of expenditure due to acquisition of shares of affiliated companies.
Cash flow from financial activities was an expenditure of 233 million yen (expenditure of 558 million yen in the previous fiscal year). The main factors are dividend payments of 118 million yen, expenditure of 77 million yen due to repayment of short-term loans and long-term loans, and payment of lease obligations of 30 million yen.
In the fiscal year ending 2024/3, although cash flow from sales activities was negative due in part to a decline in sales, investment activities were actively carried out to strengthen cooperation and build support systems in growth areas with affiliated companies by utilizing the strong internal reserves accumulated so far.
(Author: FISCO Analyst Tomokazu Murase)