ICHIKEN Co., Ltd.

Business Details

Handles building construction, civil engineering, and other construction work in general. The core business is construction of "commercial facilities," mainly new store construction, interior fit-out and renovation work, and construction of lodging facilities. The group operates through a structure that includes consolidated subsidiary Kataoka Kogyo Co., Ltd. (mainly civil engineering work). This is the core segment, accounting for approximately 99.7% of consolidated net sales. Major customers during the period included Nitori (net sales of ¥12,469 million), but as this fell below 10% of consolidated net sales in the current period, it is no longer subject to disclosure.

Recent Overview

Both revenue and profit increased significantly, and the backlog carried into the next period also expanded to a record high level.

In the construction business (consolidated) for FY2026 (ending March 2026), completed construction revenue rose to ¥105,893 million (up 7.3% year on year) and segment profit rose to ¥11,320 million (up 29.9% year on year), achieving substantial growth in both revenue and profit. The profit margin improved to 10.7%. The non-consolidated backlog carried into the next period remained at a high level of ¥101,328 million (up 16.5% year on year), providing strong visibility into next-period sales. Of particular note is the sharp increase in the public-sector backlog carried forward, which rose to ¥9,413 million (up 654.5% year on year). The provisional accounting treatment related to the business combination with Kataoka Kogyo was finalized during the current period, and goodwill decreased to ¥815 million (from ¥942 million in the prior period).

Key Products

Growth Drivers

• Continued capture of demand for new construction and renovation of commercial facilities and stores (private-sector building construction accounts for approximately 90.7% of completed construction revenue)
• Visibility into next-period sales supported by a high backlog carried forward of ¥101,328 million (non-consolidated, as of end-March 2026)
• Active order-taking activities in response to rising demand for lodging facility construction
• Diversification of the order base driven by a sharp increase in the public-sector backlog carried forward (¥9,413 million, up 654.5% year on year)
• Business expansion into the civil engineering field through the subsidiarization of Kataoka Kogyo Co., Ltd.
• Strengthening of the construction business under the medium-term management plan (2026-2028), with a focus on commercial facility construction and renovation work, and an investment plan of approximately ¥100 million
• Efforts to reform operations and improve productivity through the use of DX and AI

Risks

• Rising labor costs due to chronic labor shortages
• Risk of increased construction costs due to persistently high construction material prices
• Risk of slower sales progress in the second quarter associated with the promotion of work-style reforms toward four-week, eight-day-off schedules
• Risk of recording provisions for construction contract losses due to estimation errors in total construction costs (¥14 million recorded in the current period)
• Risk of sales concentration with a major customer (Nitori Co., Ltd.; net sales of ¥12,469 million in the prior period)
• Decline in private-sector capital investment due to deterioration in the macro environment, including rising interest rates and geopolitical risk
• Risk of impairment of goodwill (¥815 million)