Operating Results for the Fiscal Year Ended October 31, 2016 (FY2016)
In the consolidated fiscal year under review (November 1, 2015 to October 31, 2016), employment and personal income remained at high levels in Japan. But economic growth slowed in China and other emerging Asian countries as well as in resource-producing countries and the price of crude oil fell due in part to the inability of oil-producing countries to lower output. Britain’s departure from the EU is another source of concern. As uncertainty about events affecting external demand rose, the yen appreciated. There were also worries about sluggish consumer spending and weaker corporate earnings. In response, the Bank of Japan cut interest rates into negative territory and the Japanese government pushed back the next consumption tax hike. Overall, the operating environment remained unclear during the fiscal year.
In the wedding industry, the number of weddings in Japan in 2015 was 635,000 (Ministry of Health, Labour and Welfare, 2015 Annual Estimate of Vital Statistics), down 9,000 from 2014. Although the number of weddings and receptions is decreasing slowly as the prime wedding age population declines, the guest house wedding market is still generally healthy.
Differentiating wedding services from those of competitors by using wedding styles and services is becoming increasingly difficult. During the fiscal year, we took many actions in line with the IKK Group’s philosophy of “touching our customers’ hearts.” There were internal and external employee training activities to give our people the personal strengths and customer interaction skills needed to provide personalized wedding services. In addition, we used our own sales support system to analyze operating data and used many initiatives at wedding facilities to attract more customers.
To capture a larger share of Japan’s wedding market, we are working on building an infrastructure capable of quickly meeting the increasingly diverse needs and expectations of customers and establishing an introduction system for maintaining a cycle in which we receive new customer referrals from current customers. All these actions are aimed at sales and earnings growth.
As a result, net sales in this period under review increased 5.5% from one year earlier to 17,911 million yen, operating income increased 3.3% to 2,176 million yen, ordinary income increased 3.4% to 2,166 million yen, and profit attributable to owners of parent increased 16.9% to 1,341 million yen.
La La Chance Hiroshima Geihinkan (the Hiroshima Branch) opened in March 2015. As a result, sales were 17,212 million yen, up 5.6% from one year earlier and operating income increased 1.7% to 2,182 million yen.
Sales decreased 23.4% from one year earlier to 277 million yen and there was an operating loss of 10 million yen compared with a 45 million yen income one year earlier.
Sales increased 34.7% from one year earlier to 433 million yen and there was an operating income of 1 million yen compared with an 86 million yen loss one year earlier. The occupancy rate was more than 90% at all three nursing-care facilities, including the Karatsu Branch that started operating in March 2015.