■Iric Corporation ＜7325＞ Performance Trends

1. Summary of consolidated financial results for the fiscal year ending 2024/6

Consolidated financial results for the fiscal year ended 2024/6 were sales of 7921 million yen, up 31.9% from the previous fiscal year; operating profit increased 163.7% to 495 million yen; ordinary profit increased 176.6% to 538 million yen; and net income attributable to parent company shareholders increased 2,092.2% to 351 million yen. Also, EBITDA was 752 million yen, up 65.8% from the same period. Sales in all segments grew drastically, and landed with a significant increase in sales and profit exceeding previous forecasts (upward revised value as of 2024/6/14, sales 7853 million yen, operating income 416 million yen, ordinary income 447 million yen, net income attributable to parent company shareholders 216 million yen).

As for sales, in the directly managed store division of the insurance sales business, LA (newly consolidated from the 2nd quarter of the 2024/6 fiscal year), and the FC division of the solution business, the number of customers attracted to “insurance clinics” increased due to increased awareness and an increase in the number of stores, etc., and sales of asset formation products remained strong. The increase in the introduction of the “AS” series in the solution business and the “smart OCR” in the system business also contributed. In terms of profit, labor costs increased due to aggressive recruitment, base increases, and LA consolidation, but they were absorbed due to increased sales effects. Gross profit increased 24.2% from the previous fiscal year, but gross profit margin fell 4.9 points to 78.6%. SG&A expenses increased 18.8% from the same period, but the SG&A fee ratio decreased 8.0 points to 72.4%. As a result, the operating margin rose 3.2 points from the same period to 6.3%. The increase or decrease analysis of the 308 million yen increase in operating profit is an increase of 820 million yen due to an increase in directly managed stores and LA subsidiaries in the insurance sales business, a 376 million yen increase due to an increase in customer delivery to “AS” series large contracts and FC stores in the solution business, an 18 million yen increase due to an increase in system business sales, a 733 million yen decrease due to an increase in labor costs (active recruitment, LA subsidiary, etc.), and a decrease in advertising costs (from TV commercials to web advertisements) There was an increase of 125 million yen due to shifts, etc.), a decrease of 107 million yen due to an increase in payment fees such as system usage fees, etc., and a 190 million yen decrease due to an increase in other sales and administration expenses (rent, etc.). Note, impairment losses recorded in the previous fiscal year and investment securities valuation losses decreased due to extraordinary losses.

2. Trends by segment

As for trends by segment, sales in all segments increased. Also, the stock sales ratio was 34.2% on a company-wide basis; by segment, the directly managed store division of the insurance sales business was 16.1%, the corporate sales division/RM division was 25.1%, LA was 20.2%, the AS division of the solution business was 69.1%, the FC division was 34.1%, and the system business was 58.6%.

(1) Insurance sales business

In the insurance sales business, sales increased 43.5% from the previous fiscal year to 4529 million yen (2905 million yen, up 13.4% from the same period; 435 million yen, corporate sales division/RM division decreased 26.9%; LA newly consolidated from the 2nd quarter was 1190 million yen), and segment profit (operating profit before adjustments for company-wide expenses, etc.) increased 119.1% to 601 million yen. Sales declined in the corporate sales division due to the acquisition of large contracts in the previous fiscal year, but in addition to the fact that the number of customers attracted increased due to aggressive promotion effects etc. using SNS in the directly managed store division, the fact that LA was newly consolidated also contributed. As an important KPI, the number of directly managed stores increased by 17 stores from the end of the previous fiscal year to 79 stores (of which LA is 13), the number of new visitors to directly managed stores increased 17.7% from the previous fiscal year to 17,531, the number of returning stores increased 49.5% to 6,703, the contract unit price per household increased 2,000 yen to 171 thousand yen, the number of contracts closed increased 16.9% to 9,762, and the closing rate fell 3.1 points to 55.7%.

(2) Solution business

In the solution business, sales increased 21.4% from the previous fiscal year to 2241 million yen (the AS division increased 20.1% to 1298 million yen; the FC division increased 23.4% to 944 million yen), and segment profit decreased 31.4% to 559 million yen. On the profit side, profit declined due to aggressive investment in human resources, etc., but sales increased drastically in both divisions. Furthermore, according to the company, segment profit based on system accounting disclosed in securities reports and financial statements was recorded by transferring part of head office expenses to each segment from the 2024/6 fiscal year, so profit decreased, but segment profit based on management accounting without transferring part of head office expenses was an increase in profit.

The breakdown of sales in the AS division was initial registration fees and monthly usage fees of 700 million yen, up 9.8% from the previous fiscal year; OCR sales increased 38.9% to 341 million yen; insurance consulting (including education) sales increased 31.4% to 242 million yen; and sales of other solutions increased 8.5% to 15 million yen. As an important KPI, the number of “AS” series IDs increased 2.1% from the end of the previous fiscal year to 12,166 (6,609, 10.4% increase for agents and banks, 5,557, and 6.4% decrease for insurance companies). Although the number of insurance company IDs decreased due to cancellations due to organizational changes in 1 insurance company, it increased steadily overall due to increased introduction of regional banks, etc. The subscription usage fee for the “AS” series increased 11.4% from the previous fiscal year to 666 million yen, and the number of financial institutions that have introduced the “AS System” increased 7 lines from the end of the previous fiscal year to 40 lines.

The breakdown of sales in the FC division was 363 million yen with initial registration/basic fees/store usage fees up 3.5% from the previous fiscal year; 439 million yen with 61.5% increase in business division management stores and insurance fees associated with joint recruitment; royalty sales decreased 8.4% to 77 million yen; and sales associated with other services increased 12.3% to 65 million yen. As an important KPI, the number of FC stores decreased by 7 from the end of the previous fiscal year (19 newly opened stores, 23 closed stores, 3 directly managed stores) to 193 stores. The number of FC stores decreased due to scrap and build, but the number of customers sent to FC stores increased due to aggressive web promotion, and insurance fees associated with joint recruitment increased drastically.

(3) Systems business

Sales in the system business increased 14.8% from the previous fiscal year to 1151 million yen (“smart OCR” increased 58.5% to 1035 million yen; contract development decreased 67.0% to 116 million yen), and segment profit lost 13 million yen (profit of 73 million yen in the previous fiscal year). On the profit side, losses were recorded due to the effects of human resource investment, such as a drastic strengthening of sales personnel, but in terms of sales, “smart OCR” sales increased drastically.

(Author: FISCO Visiting Analyst Masashi Mizuta Exhibition)