STRIKE COMPANY,LIMITED Non-Consolidated Financial Results | |
For the Fiscal Year Ended September 30, 2021 | |
[Japanese GAAP] | |
Company name: | Strike Co., Ltd. |
Stock exchange listing: First Section, Tokyo Stock Exchange | |
Code number: | 6196 |
URL: | https://www.strike.co.jp/ |
Representative: | Kunihiko Arai, President and CEO |
Contact: | Koichi Nakamura, Director, Executive Officer and CFO |
Phone: | +81-3-6895-6196 |
Scheduled date of Annual General Meeting of Shareholders: Scheduled date of commencing dividend payments: Scheduled date of filing annual securities report:
Availability of supplementary briefing material on annual financial results: Schedule of annual financial results briefing session:
MEMBERSHIP
October 29, 2021
(Amounts of less than one million yen are rounded down.)
1. Financial Results for the Fiscal Year Ended September 30, 2021 (September 1, 2020 to September 30, 2021)
(1) Operating Results
(Percentages indicate year-on-year change.)
Net sales | Operating profit | Ordinary profit | Profit | |||||||||||
Fiscal year ended | Millions of yen | % | Millions of yen | % | Millions of yen | % | Millions of yen | % | ||||||
September 30, 2021 | 9,034 | ― | 3,451 | ― | 3,475 | ― | 2,395 | ― | ||||||
August 31, 2020 | 6,916 | 36.2 | 2,981 | 58.0 | 2,983 | 57.9 | 2,202 | 64.1 | ||||||
Basic earnings | Diluted earnings | Rate of return on | Ordinary profit to | Operating profit | ||||||||||
per share | per share | equity | total assets | to net sales | ||||||||||
Fiscal year ended | Yen | Yen | % | % | % | |||||||||
September 30, 2021 | 125.33 | 124.68 | 29.6 | 34.7 | 38.2 | |||||||||
August 31, 2020 | 115.29 | 114.72 | 36.0 | 38.6 | 43.1 |
(Reference) Share of profit (loss) of entities accounted for using equity method: Fiscal year ended September 30, 2021: ¥― million
Fiscal year ended August 31, 2020: ¥― million
(Note) Year-on-year percentage changes are not shown as the fiscal year ended September 30, 2021 was a 13-month accounting period due to a change in fiscal year-end.
(2) Financial Position
Total assets | Net assets | Equity ratio | Net assets per share | |
Millions of yen | Millions of yen | % | Yen | |
As of September 30, 2021 | 10,958 | 9,077 | 82.8 | 474.41 |
As of August 31, 2020 | 9,045 | 7,091 | 78.3 | 370.98 |
(Reference) Equity: As of September 30, 2021: ¥9,073 million As of August 31, 2020: ¥7,087 million
(3) Cash Flows
Cash flows from | Cash flows from | Cash flows from | Cash and cash | |
equivalents at end of | ||||
operating activities | investing activities | financing activities | ||
period | ||||
Fiscal year ended | Millions of yen | Millions of yen | Millions of yen | Millions of yen |
September 30, 2021 | 1,500 | (400) | (404) | 8,567 |
August 31, 2020 | 2,888 | (133) | (277) | 7,871 |
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2. Dividends
Annual dividends | Dividends | |||||||
Total | Payout | |||||||
1st | 2nd | 3rd | to net | |||||
quarter- | quarter- | quarter- | Year-end | Total | dividends | ratio | ||
assets | ||||||||
end | end | end | ||||||
Fiscal year ended | Yen | Yen | Yen | Yen | Yen | Millions of yen | % | % |
August 31, 2020 | ― | 0.00 | ― | 24.00 | 24.00 | 458 | 20.8 | 7.5 |
September 30, 2021 | ― | 0.00 | ― | 32.00 | 32.00 | 612 | 25.5 | 7.6 |
Fiscal year ending | ||||||||
September 30, 2022 | ― | 0.00 | ― | 36.00 | 36.00 | 25.2 | ||
(forecast) |
3. Earnings Forecasts for the Fiscal Year Ending September 30, 2022 (October 1, 2021 to September 30, 2022)
(Percentages indicate year-on-year change.)
Net sales | Operating profit | Ordinary profit | Profit | Basic earnings | ||||||
per share | ||||||||||
Millions of yen | % | Millions of yen | % | Millions of yen | % | Millions of yen | % | Yen | ||
First half | 5,625 | ― | 2,138 | ― | 2,138 | ― | 1,391 | ― | 72.73 | |
Full year | 11,208 | ― | 4,210 | ― | 4,211 | ― | 2,729 | ― | 142.70 |
Note: Year-on-year percentage changes are not shown as the fiscal year ended September 30, 2021 was a 13-month accounting period spanning from September 1, 2020 to September 30, 2021 due to a change in fiscal year-end.
Notes:
- Changes in accounting policies, changes in accounting estimates, and retrospective restatement
- Changes in accounting policies due to the revision of accounting standards: None
- Changes in accounting policies other than 1) above: None
- Changes in accounting estimates: None
- Retrospective restatement: None
- Total number of issued shares (common shares)
-
Total number of issued shares at the end of the period (including treasury shares): As of September 30, 2021: 19,354,200 shares
As of August 31, 2020: 19,354,200 shares - Total number of treasury shares at the end of the period: As of September 30, 2021: 228,021 shares
As of August 31, 2020: 250,183 shares - Average number of shares outstanding during the period: Fiscal year ended September 30, 2021: 19,115,608 shares Fiscal year ended August 31, 2020: 19,104,095 shares
-
Total number of issued shares at the end of the period (including treasury shares): As of September 30, 2021: 19,354,200 shares
- The financial statements are outside the scope of audit procedures by a certified public accountant or auditing firm.
- Explanation of the proper use of earnings forecasts and other notes
(Caution on forward-looking statements)
The earnings forecasts and other forward-looking statements herein are based on information currently available to the Company and certain assumptions deemed reasonable by the Company, and are not intended to be construed as assurance that they will be accomplished in the future. Actual results may differ significantly from these forecasts due to a wide range of factors. For the assumptions underlying the forecasts and precautions when using the forecasts, please see "1. Overview of Business Results (4) Future Outlook" on page 7 of the Attached Materials.
(How to obtain an explanation of financial results)
To prevent the COVID-19 pandemic from spreading, we plan to distribute a financial results briefing video on our website (https://www.strike.co.jp/ir/index_en.html) instead of holding a physical financial results briefing session. Distribution is slated to commence on Tuesday, November 2, 2021 at 3:00 p.m.
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Contents of Attached Materials | ||
(3) | Overview of Cash Flows............................................................................................................................................... | 6 |
(4) | Future Outlook.............................................................................................................................................................. | 7 |
2. Basic Policy Regarding Selection of Accounting Standards............................................................................................... | 7 | |
3. Financial Statements and Primary Notes .......................................................................................................................... | 8 | |
(1) | Balance Sheet .............................................................................................................................................................. | 8 |
(2) | Statement of Income .................................................................................................................................................. | 10 |
(3) | Statement of Changes in Equity .................................................................................................................................. | 11 |
(4) | Statement of Cash Flows ........................................................................................................................................... | 13 |
(5) | Notes to the Financial Statements.............................................................................................................................. | 14 |
(Notes on going concern assumption).......................................................................................................................... | 14 | |
(Share of profit (loss) of entities accounted for using equity method)........................................................................... | 14 | |
(Segment information).................................................................................................................................................. | 14 | |
(Per share information) ................................................................................................................................................ | 14 | |
(Significant subsequent events) ................................................................................................................................... | 14 |
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1. Overview of Business Results
(1) Overview of Business Results
Due to a change in fiscal year-end, the fiscal year under review was an irregular 13-month accounting period. As a result, we have not made comparisons with the previous fiscal year, but we have included the actual results for the 12- month period of the fiscal year ended August 31, 2020 as a reference.
During the fiscal year ended September 30, 2021, the Japanese economy faced a prolonged period of severe conditions due to the impact of the COVID-19 pandemic. Economic measures implemented by the Japanese government led to a temporary recovery, but the emergence of COVID-19 variants has resulted in the further spread of the virus, causing repeated state of emergency declarations. While there has been progress in vaccination as a measure to prevent the spread, the economic outlook remains uncertain.
The market for M&A involving small and medium-sized enterprises (SMEs), which is our area of business, is continuing to expand over the medium to long term in part thanks to the success of aggressive measures and promotion by the Japanese government to support SMEs struggling with the search for successors. According to the "2021 White Paper on Small and Medium Enterprises in Japan," approximately 60% of the 49,000 companies that were shuttered or dissolved in 2020 had reported profits during their most recent financial years. This underlines the importance of facilitating a smooth passage of business into the hands of a subsequent generation of motivated managers to avoid squandering precious management resources for lack of appropriate successors. In April 2021, the Small and Medium Enterprise Agency formulated its "Promotion Plan for M&A among Small and Medium-sized Enterprises" to promote improved production through expansion in the scales of SMEs and encourage the establishment of businesses through the acquisition of third-party management resources. The formulation of this plan demonstrates that efforts to promote M&A among SMEs are underway in both the public and private sectors. Moving forward, M&A will likely play an increasingly prominent role as a solution for management issues facing SMEs.
Against this backdrop, while making effort to prevent the spread of COVID-19, we worked to attract new customers and close deals by hosting online seminars and making use of meetings via online conferencing systems. We also worked to uncover a wide range of M&A needs by carrying out industry-specific online advertising and proposal-based marketing.
As a result of these efforts, even under the state of emergency declaration, we were able to actively engage in sales activities. However, the COVID-19 pandemic's prolonged spread has had an impact on the operating results of a growing number of SMEs. This trend has also had an effect on our M&A negotiations, causing an increase in the number of projects with prolonged negotiations on terms and conditions and protracted search for appropriate matches, especially among small projects. Additionally, we have experienced difficulties in selling businesses according to desired terms, primarily in cases of contracts that we acquired prior to the start of the pandemic. Consequently, we encountered more sale cancellations than we had initially expected. On the other hand, we have also achieved steady progress through many large M&A deals despite incurring impact on business performance, and have consequently seen a rise in sales generated per deal closed.
On the sales front, we strengthened our M&A support system through collaboration. We accepted personnel from partner financial institutions and trained them so that they would be able to execute M&A operations with greater effectiveness once they return to their respective companies.
In terms of recruitment, we actively strove to add new employees with the goal of expanding our business performance and successfully recruited 44 new M&A consultants during the fiscal year under review. With the increase in employees, we relocated our headquarters in May 2021.
As a result, during the fiscal year ended September 30, 2021, there were 151 deals closed (Note 1) (versus 134 during the fiscal year ended August 31, 2020), and 290 contracts closed (Note 2) (versus 262). We closed 17 large M&A deals (generating ¥100 million or more in sales per deal) (versus 16 in the previous fiscal year). Additionally, we accepted 518 new contracts (Note 3) (versus 340 in the previous fiscal year).
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(Note 1) Number of deals closed:
Number of M&A transactions in which Strike provides brokerage or advisory services (i.e., number | |
of deals). | |
(Note 2) | Number of contracts closed: |
Number of contracts on closed M&A deals in which Strike provides brokerage or advisory services | |
(i.e., number of companies). In brokerage services, each deal counts as two contracts (one for the | |
seller and one for the buyer), while in advisory services, each deal counts as one contract. | |
(Note 3) | New contracts: |
Number of new brokerage service contracts signed with sellers (or in the case of advisory | |
services, contracts signed and services effectively commenced). |
During the fiscal year ended September 30, 2021, net sales amounted to ¥9,034 million (versus ¥6,916 million in the previous fiscal year) thanks to an increase in sales generated per deal closed and higher number of contracts closed. Cost of sales came to ¥3,309 million (versus ¥2,398 million) due to the recording of ¥2,275 million in personnel expenses from incentives associated with sales and the addition of new M&A consultants, as well as ¥841 million in introduction fees paid in connection with new contracts. Meanwhile, SG&A expenses totaled ¥2,273 million (versus ¥1,536 million), reflecting ¥969 million in personnel expenses, including salaries for employees and remuneration for directors (and other officers) and ¥328 million in rent expenses on land and buildings. As a result, operating profit reached ¥3,451 million (versus ¥2,981 million) and ordinary profit came to ¥3,475 million (versus ¥2,983 million). In addition, we booked a ¥4 million gain on sale of investment securities as extraordinary income, which was offset by a ¥69 million loss on sale of investment securities recorded as an extraordinary loss. As a result, bottom-line profit amounted to ¥2,395 million (versus ¥2,202 million).
The number of deals closed, contracts closed, and new contracts recorded during the period under review are provided below, along with our initial targets.
Fiscal year ended | Fiscal year ended | Achievement of the | |
September 30, 2021 (actual) | September 30, 2021 (target) | full-year target | |
Number of deals closed | 151 | 191 | 79.1% |
Number of contracts closed | 290 | 375 | 77.3% |
Number of new contracts | 518 | 482 | 107.5% |
Net sales (Millions of yen) | 9,034 | 8,368 | 108.0% |
Business results by segment are omitted, as the Company includes only the single M&A brokerage business segment.
(2) Overview of Financial Condition
(Assets)
As of September 30, 2021, current assets stood at ¥9,981 million, up ¥1,770 million from August 31, 2020. This mainly reflected increases of ¥887 million in accounts receivable-trade and ¥695 million in cash and deposits.
Non-current assets amounted to ¥977 million, up ¥142 million from August 31, 2020. This was mainly the result of a ¥149 million increase in buildings and a ¥65 million rise in tools, furniture and fixtures, despite a ¥98 million decrease in leasehold deposits.
(Liabilities)
Current liabilities came to ¥1,881 million as of September 30, 2021, down ¥72 million from August 31, 2020. This was primarily attributable to a ¥152 million decrease in income taxes payable, which offset a ¥76 million increase in accounts payable-trade.
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Strike Co. Ltd. published this content on 11 November 2021 and is solely responsible for the information contained therein. Distributed by Public, unedited and unaltered, on 11 November 2021 04:06:03 UTC.
