■ History and Performance Trends

1. History

The predecessor of Unirita, Inc. (3800), 3B Co., Ltd., was established in 1982 in Chuo-ku, Tokyo, as a subsidiary of business consultants providing programs for human resource development and organizational development. The goal was to sell "A-AUTO", which was sold domestically by Software AG of Far East, Inc. (renamed Beacon Information Technology in August 1996), in the USA market.

Later, in 1987, it changed its name to BSP Corporation. A turning point for the company came in 1993 when it inherited the system operation-related business of Software AG of Far East, Inc. and began full-scale operations as a specialized company for system operation management packaged software. Thereafter, taking advantage of the expansion of IT system investments, the company steadily strengthened its business foundations while accumulating achievements centered around core business systems (mainframe) including financial institutions and major companies.

In 2001, BSP Solutions was established, marking the beginning of full-scale consulting and solution business. It was listed on the JASDAQ Securities Exchange in 2006 (transitioned to the Standard Market due to the restructuring of the Tokyo Stock Exchange from April 2022).

In January 2014, by consolidating Beacon IT, Inc. (registered company name: Beacon Information Technology), the company began to incorporate growth areas such as data utilization and started to transform its business structure.

In April 2015, it absorbed and merged with its consolidated subsidiary Beacon IT, and changed its name to Unirita, Inc. The new company name embodies the intention to be a company that contributes to the development of customers and society with "unique ideas" and a spirit of altruism for value creation.

2. Past performance trends

Looking back at the company's performance, revenue from the fiscal year ending March 2012 to the fiscal year ending March 2014 saw significant growth driven by the shift to open systems, particularly in the "System Operations Business (currently part of Product Services)". However, after a significant expansion of the business due to the consolidation of Beacon IT in the fiscal year ending March 2015, it can be said that revenue struggled to grow for a while during the transformation of the business structure. However, the acquisition of Infinite in the fiscal year ending March 2019, which developed the "System Integration Business (currently part of Professional Services)", contributed to the expansion of the business, and since the fiscal year ending March 2020, the focus on the "Cloud Business (currently Cloud Services)" has steadily increased.

In terms of profits and losses, although there is still a high dependency on revenue from the "Mainframe Business (currently part of Product Services)", the improvement of profits and losses in the "Product Business (currently Product Services)" has led to an upward trend in operating margin, reaching a high level of 28.1% in the fiscal year ending March 2014. Since the fiscal year ending March 2015, operating margins have decreased due to prior investments associated with business structural transformation, but it has still maintained a level around 20%. However, since the fiscal year ending March 2019, operating margins have been at lower levels compared to before due to the impact of prior investments aimed at future growth areas like the "Cloud Business" and new businesses. In the future, how to cover the impact resulting from the downsizing of the "Mainframe Business" through profit improvements in "Cloud Services" and enhancement of added value in "Professional Services" will be the biggest point of interest.

In terms of finance, the equity ratio, which indicates the stability of the financial foundation, fell once in the fiscal year ending March 2014 due to the consolidation of Beacon IT, but rose to 80.1% in the fiscal year ending March 2016 due to the absorption merger of Beacon IT (change of parent company's equity). Additionally, the current ratio, indicating short-term payment capabilities, remains high (305.8% at the end of the fiscal year ending March 2024) reflecting abundant cash and deposit balances, thus showcasing an excellent financial foundation that supports future growth-oriented investments. On the other hand, ROE, indicating capital efficiency, has remained at double-digit levels, but due to changes in the business portfolio and impacts from prior investments, it has been below 10% since the fiscal year ending March 2018.

Shareholder return The dividend policy of NEC Capital Solution <8793> is based on maintaining stable dividends, while securing internal reserves necessary for investment in growth strategies and strengthening financial health, and reviewing appropriate dividend levels taking into account market trends and performance fluctuations. For the dividend of the 2024 fiscal year, a dividend of 130 yen per share (including an interim dividend of 65 yen) with a 20 yen increase compared to the previous fiscal year will be implemented. Regarding the dividend for the fiscal year ending March 2025, the company plans to pay a dividend of 150 yen per share (including an interim dividend of 75 yen) with a 20 yen increase compared to the dividend in the fiscal year ending March 2024, taking into account the profit forecast. The company plans to reward shareholders in accordance with the dividend policy, as it plans to achieve the highest profit on the profit side as a profit forecast. As a result, the company's dividend payout ratio reaches 40.4%. The actual PBR (price-to-book ratio) is in the 0.7x range and is below the PBR 1.0x that the Tokyo Stock Exchange is requesting improvement. Therefore, we believe that the company will actively pursue initiatives to strengthen shareholder return policies along with profit growth in the future, and the trend of increased dividends will continue.

For the fiscal year ending March 2025, an annual dividend of 70.0 yen with an increase of 2.0 yen compared to the previous period is anticipated. It is expected that the upward trend in dividends will continue alongside profit growth.

The company has changed its dividend policy from the previously applied consolidated payout ratio to a policy based on Shareholder's Equity Dividend Rate (DOE) since the fiscal year ending March 2019. The aim is to achieve stable and sustainable maintenance and increase of dividends without being affected by fluctuations in periodic profits and losses due to prior investments. Moreover, the company plans to conduct stock buybacks flexibly and will appropriately cancel shares that have been acquired.

Regarding the dividend for the fiscal year ending March 2025, an annual amount of 70.0 yen (interim 35.0 yen, year-end 35.0 yen) with an increase of 2.0 yen compared to the previous period is planned. According to the mid-term management plan, there is a plan to continue increasing dividends alongside profit growth.

(Written by Fisco Guest Analyst Ikuo Shibata)