TANAKEN Inc.

Business Details

Provides one-stop construction management for the demolition of building structures, along with associated civil engineering, earth retaining, foundation demolition, and pile removal work. Handles the full scope of operations from site condition surveys, construction method proposals, and design to construction planning, safety management, and neighborhood coordination. Also handles removal of hazardous contaminants such as asbestos, PCBs, and dioxins, as well as soil improvement. Adopts a general-contractor model in which it directs and supervises partner companies, with developers, general contractors, end users, and redevelopment associations as its main customers. Operates exclusively in Japan with no overseas sales.

Recent Overview

Revenue increased significantly by 20.6% year on year to ¥14,820 million, but profit declined due to rising costs

In FY2026 (ending March 2026), the company achieved a significant increase in revenue to ¥14,820 million (+20.6% year on year), exceeding plan across all metrics. On the other hand, an increase in cost of sales (from ¥8,976 million to ¥11,626 million) caused the gross profit margin to decline from 26.9% to 21.6%, resulting in a decrease in operating profit to ¥2,185 million (-6.1% year on year). Orders for technically demanding, large-scale projects increased steadily, building up the order backlog to ¥11,931 million at fiscal year end. Operating cash flow deteriorated sharply to -¥578 million, down from +¥2,141 million in the prior fiscal year, due to a substantial increase in trade receivables (-¥1,694 million) among other factors. As the final year of the 'Primary Phase' of the medium-term management plan, the company changed its company name and relocated its headquarters, and will move into the next 'Secondary Phase.' For FY2027 (ending March 2027), the company forecasts revenue of ¥16,000 million (+8.0%) and operating profit of ¥2,100 million (-3.9%).

Key Products

Growth Drivers

• Continuation of a solid order environment driven by an increasing number of aging buildings, active urban redevelopment, condominium rebuilding, and expanding demand for logistics warehouses and data centers
• Outlook for next fiscal year revenue of ¥16,000 million (+8.0% year on year), supported by an ample order backlog of ¥11,931 million at fiscal year end
• Expansion of revenue scale driven by an increase in orders for technically demanding, large-scale projects
• Strengthening of construction capabilities under the medium-term management plan's 'Secondary Phase' through quantitative and qualitative reinforcement of human resources, establishment of on-site support systems, and expansion of alliances with partner companies
• Strengthening of competitiveness and development of new customers through enhancement of the value of the 'TANAKEN brand'

Risks

• Cost increase pressure from rising construction material prices and tightening supply-demand for skilled construction labor (gross profit margin for the fiscal year fell from 26.9% to 21.6%)
• Risk of delayed commencement of large-scale projects (decreases relative to plan due to delays in overall development projects)
• Increased working capital needs and risk of deteriorating operating cash flow due to a substantial increase in trade receivables (accounts receivable on completed construction contracts +¥1,789 million)
• Increased need for advance funding as large-scale projects increase under the general-contractor model
• Risk of rising energy and material prices and supply constraints due to geopolitical risks such as US trade policy and the potential closure of the Strait of Hormuz
• Downward pressure on profit margins from increased personnel recruitment and training costs (operating margin is expected to decline again next fiscal year)