SMS CO., LTD.

Business Details

Under the mission of "building information infrastructure suited to an aging society," the company operates across the fields of medical/healthcare, nursing care/disability welfare, healthcare, and senior life. It develops platforms connecting workers, businesses, and end users, and operates in four fields: Career (recruitment/job placement and qualification schools), Nursing Care/Disability Welfare Business Operators (the management support platform "Caipoke"), Overseas (Medical Platform and Global Career), and Business Development (Healthcare and Senior Life). From FY2027 (ending March 2027), the company plans to transition to a three-segment structure: "Career," "Nursing Care/Disability Welfare Management Support," and "Overseas."

Recent Overview

Recorded a large-scale impairment loss of ¥22,957 million at the overseas MIMS Group, resulting in a net loss for the period

In FY2026 (ending March 2026), revenue was ¥64,735 million (up 6.2% year on year) and operating profit was ¥6,787 million (up 7.1% year on year), with the core business performing solidly. However, as the performance of the consolidated subsidiary MIMS Group fell short of plan, the company recorded an impairment loss totaling ¥22,957 million as an extraordinary loss, comprising goodwill of ¥8,649 million, trademark rights of ¥13,041 million, customer relationship assets of ¥589 million, and software of ¥677 million. As a result, net loss attributable to owners of parent was ¥14,317 million. The company also carried out share buybacks (¥3,999 million), and net assets declined significantly from ¥47,319 million to ¥26,724 million. FY2027 (ending March 2027) is positioned as a "year of consolidation," with plans to invest approximately ¥2.0 billion in upfront investment. The company transitioned to a new management structure in January 2026, and from FY2027 (ending March 2027) will change to a three-segment structure comprising "Career," "Nursing Care/Disability Welfare Management Support," and "Overseas."

Key Products

Growth Drivers

• Widening supply-demand gap for medical and nursing care/disability welfare workers driven by the declining birthrate, aging population, and population decline (a shortage of 570,000 care workers is projected by 2040)
• Increase in ARPU driven by growth in Caipoke membership and expanded use of factoring and paid option services (Nursing Care/Disability Welfare Business Operators field: up 14.7% year on year)
• Full-scale expansion into the disability welfare field within the Nursing Care/Disability Welfare Business Operators field and strengthening of the sales structure for "Kabenashi Cloud"
• Progress in developing and nurturing new businesses in the Business Development field (Healthcare and Senior Life) (up 14.6% year on year)
• Strengthened shareholder returns through a progressive dividend policy (targeting a consolidated payout ratio of around 30%) and a planned dividend increase to ¥30.50 per share in FY2027 (ending March 2027)
• Efficiency improvements in the matching process using AI in the Career business, and active recruitment of career partners focused mainly on the childcare and nursing care/disability welfare fields
• Building higher value-added products, including the transition to "Caipoke Connect" and the addition of AI functions, potentially including capital and business alliances with external partners

Risks

• Overseas field: Risk of continued underperformance at the MIMS Group and uncertainty associated with a fundamental review of the Medical Platform business (an impairment loss of ¥22,957 million was already recorded in FY2026, ending March 2026)
• Overseas field: Continued impact on cross-border travel in the Global Career business due to the deteriorating situation in the Middle East (Overseas field revenue in FY2026, ending March 2026, was down 5.7% year on year)
• Career field: Lengthening lead times for job seekers to reach employment in recruitment services, and the impact of the discontinuation of retention incentive payments in direct recruiting
• Risk that operating profit growth will be limited in FY2027 (ending March 2027) due to upfront investment of approximately ¥2.0 billion (operating profit forecast is ¥6,801 million, up only 0.2% year on year)
• Foreign exchange risk: Fluctuations in the foreign currency translation adjustment account related to overseas subsidiaries such as the MIMS Group (balance of ¥6,536 million at end of FY2026, ending March 2026)
• Increased credit risk and funding costs associated with the expansion of Caipoke's factoring service (short-term borrowings of ¥4,600 million)
• Significant decline in net assets and equity ratio due to share buybacks (¥3,999 million in FY2026, ending March 2026) and the large-scale impairment loss (equity ratio fell from 61.5% to 50.2%)