Reiwa Accounting Holdings Co., Ltd.

Business Details

The segment targets large corporate groups such as listed companies, REITs, SPCs, and medical institutions as its primary customers, centering on ongoing accounting consulting (Long), while also offering one-off consulting (Short), Education & Staffing/Placement Business, and System Development Business. Capturing robust demand driven by corporate labor shortages and the increasing complexity of accounting operations, the segment continued its high growth in FY2026 (ending March 2026), posting sales of ¥5,705 million (up 14.6% year on year) and operating income of ¥1,988 million (up 33.0% year on year).

Recent Overview

FY2026 (ending March 2026) achieved higher sales and profit, with strengthened shareholder returns through share buybacks and a substantial dividend increase

Sales reached ¥5,705 million (up 14.6% year on year) and operating income reached ¥1,988 million (up 33.0% year on year), marking two consecutive years of high growth. The consolidation of Miracle Keiri Co., Ltd. brought the System Development Business into the fold. On the financial side, the company paid dividends from surplus of ¥1,398 million (versus ¥431 million in the prior period) and conducted share buybacks of ¥476 million, resulting in net cash used in financing activities of ¥1,882 million. The company also implemented a capital reduction (capital stock reduced from ¥182 million to ¥100 million) and cancelled treasury shares. For FY2027 (ending March 2027), the company forecasts sales of ¥6,300 million (up 10.4% year on year) and operating income of ¥2,160 million (up 8.7% year on year).

Key Products

Growth Drivers

• Expansion of the scope of outsourced work within existing client groups (continued increase in average annual fees per client group)
• Increase in the number of contracts through acquisition of new clients (173 client groups as of the end of March 2025)
• Continued rise in demand for accounting consulting amid corporate labor shortages and increasing complexity of accounting operations
• Productivity improvements in the Consulting Business through system development by Miracle Keiri Co., Ltd.
• Diversification of the service lineup through expansion of the Education & Staffing/Placement Business
• Increased corporate activity driven by a gradual recovery in the Japanese economy, supported in part by rising inbound demand

Risks

• Difficulty in recruiting and developing talented personnel (high dependence on human resources as a knowledge-intensive service)
• Risk of a decline in the contract renewal rate (currently high at 99.810%, but contingent on maintaining client satisfaction)
• Risk regarding the recovery of system development investment (increased depreciation expense once the ¥58 million in software in progress becomes operational, with uncertainty over the timing and extent of resulting benefits)
• Deterioration in client companies' business conditions due to a worsening macroeconomic environment, including surging energy prices, geopolitical risk (the situation in the Middle East and Ukraine, the U.S. attack on Iran, etc.), and yen depreciation
• Price competition from new market entrants (barriers to entry are high given the need for a professional workforce of a certain scale, but competition with existing major accounting firms continues)
• Decline in on-hand liquidity due to substantial shareholder returns (dividends of ¥1,398 million plus share buybacks of ¥476 million), with cash and cash equivalents falling from ¥2,405 million to ¥1,788 million