LA Holdings Co.,Ltd. Full-Year Earnings Flash
DX New-Build Real Estate segment drove results with revenue +55.6% and profit more than doubling, pushing operating income past the JPY 10B milestone. Guidance for next fiscal year calls for accelerating growth to JPY 61B in revenue and JPY 17.5B in operating income.
Key Positives From The Results
Operating income exceeded JPY 10B (+30.2% YoY) with OPM of 21.5% (+4.3pt YoY), demonstrating a marked improvement in profitability. The DX New-Build Real Estate segment's profit doubled to JPY 7.6B (+121.9% YoY), now accounting for ~67% of consolidated profit and establishing itself as the core earnings driver. Capital reinforcement through a public equity offering and total assets surpassing JPY 100B clearly signal the company's transition into an accelerated growth phase.
- Gross Profit Marginimproved to 28.7% (+3.2pt YoY). COGS held essentially flat YoY at JPY 33.1B while revenue grew, demonstrating tangible results from the value-enhancement strategy
- DX New-Build Real Estateposted revenue of JPY 20.2B (+55.6% YoY) and segment profit of JPY 7.6B (+121.9% YoY), driven by sales of 6 income-producing properties and completion of 2 condominium projects
- Equity Offeringraised ~JPY 7.4B, lifting the equity ratio to 29.3% (+4.1pt YoY). Total assets reached JPY 101.9B, crossing the JPY 100B threshold
- Dividend Payout Ratio Targetraised from "30%+" to "40%." Annual DPS of JPY 338 (+JPY 46 YoY), with next-year guidance of JPY 520, reflecting an aggressive shareholder return stance
- SG&Adeclined to JPY 3.3B (−9.3% YoY). SG&A-to-revenue ratio improved to 7.2% (−1.1pt YoY), indicating ongoing efficiency gains
Key Concerns From The Results
While profit concentration in the DX New-Build Real Estate segment intensifies, the Renovated Real Estate and Real Estate Value Enhancement segments posted notable revenue and profit declines. Interest-bearing debt expanded to JPY 65.5B (+36.8% YoY), and operating cash flow turned deeply negative at −JPY 11.3B due to inventory build-up, warranting close attention to rising interest cost risk.
- DX Renovated Real Estateposted revenue of JPY 13.2B (−16.2% YoY) and segment profit of JPY 1.3B (−41.5% YoY). Unit sales volume fell as the product mix shifted toward higher price points
- DX Real Estate Value Enhancementcontracted to revenue of JPY 11.9B (−19.7% YoY) and segment profit of JPY 1.9B (−35.1% YoY). Project timing slippage risk materialized
- Operating Cash Flowdeteriorated sharply to −JPY 11.3B (vs. −JPY 1.7B in the prior year). Inventories increased by JPY 17.9B, with properties held for sale plus work-in-progress ballooning to JPY 65.3B
- Interest Expensesurged to JPY 980M (+54.4% YoY). Rising borrowing costs in a higher-rate environment are structurally pressuring the recurring profit margin
- Next-Year Guidancetargets revenue of JPY 61B (+31.1%) and operating income of JPY 17.5B (+74.6%)—ambitious figures that carry meaningful downside risk to the stock if missed
Focus Areas / Items To Monitor Going Forward
- Concrete pipeline progress toward next year's JPY 61B revenue / JPY 17.5B operating income targets. Specifically, construction completion and sales schedules for income-producing property development within DX New-Build Real Estate, and the timing of earnings contribution from the company's largest-ever land development project in Fukuoka
- Inventory turnover and sell-through outlook for JPY 65.3B in inventory. Assessment of rising holding costs in a higher-rate environment and timeline for operating cash flow to turn positive
- Market reception of "BILLION-RESIDENCE" (priced at JPY 1B+ per unit) within DX Renovated Real Estate, and the impact of the upmarket shift on unit volumes and turnover rates
- Key assumptions behind next-year's +31% revenue / +74% operating income guidance. Detailed pipeline breakdown by major project with completion and delivery schedules
- Average holding period for JPY 65.3B in inventories and the coverage ratio of procured inventory against the next 12 months' sales plan
- Estimated interest expense impact under rising rate scenarios (+50bp / +100bp) and hedging policy including interest rate swaps
- Whether the revenue/profit decline in DX Renovated Real Estate is cyclical or structural. Annual unit sales targets and per-unit gross margin outlook for "Premium Renovation" products
- Target customer profile and first-year sales targets for "BILLION-RESIDENCE" (residences priced at JPY 1B+). Inventory risk management approach
- Rationale for the segment reclassification and medium- to long-term revenue targets for the DX Real Estate Value Enhancement segment
- How M&A Advisory and Corporate Investment businesses are factored into guidance and their expected earnings contribution going forward
- Sustainability of the 40% payout ratio target. Capital allocation policy balancing growth investment and shareholder returns
- Assurance that EPS growth will outpace the dilution from the public offering (weighted average share count +13.0%)
Key Financial Highlights
| Item | Value | YoY |
|---|---|---|
| Revenue | JPY 46,544M | +4.1% |
| Cost of Goods Sold | JPY 33,171M | −0.4% |
| Gross Profit | JPY 13,372M | +17.4% |
| SG&A | JPY 3,348M | −9.3% |
| Operating Income | JPY 10,024M | +30.2% |
| Recurring Profit | JPY 8,956M | +30.8% |
| Net Income Attributable to Owners of Parent Company | JPY 6,135M | +30.2% |
| EPS | JPY 874.92 | +15.2% |
| BPS | JPY 3,908.48 | +34.1% |
| OPM | 21.5% | +4.3pt YoY |
| Gross Profit Margin | 28.7% | +3.2pt YoY |
| ROE | 25.7% | −2.9pt YoY |
| ROA (Recurring Profit Basis) | 10.3% | ±0.0pt YoY |
| Comprehensive Income | JPY 6,162M | +30.8% |
Revenue grew a modest +4.1% YoY, but with COGS essentially flat, gross margin expanded 3.2pt. Coupled with a 9.3% reduction in SG&A, operating income surged +30.2% past the JPY 10B mark. The wide gap between profit growth and revenue growth succinctly illustrates the success of the value-enhancement strategy. EPS came in at JPY 874.92 (vs. JPY 759.38 prior year, +15.2%), though weighed down by the increase in weighted average shares outstanding from the public offering (6,206K → 7,012K shares, +13.0%).
Performance By Business Segment
| Segment | Revenue | YoY | Segment Profit | YoY | Margin |
|---|---|---|---|---|---|
| DX New-Build Real Estate | JPY 20,226M | +55.6% | JPY 7,662M | +121.9% | 37.9% |
| DX Renovated Real Estate | JPY 13,240M | −16.2% | JPY 1,339M | −41.5% | 10.1% |
| DX Real Estate Value Enhancement | JPY 11,931M | −19.7% | JPY 1,958M | −35.1% | 16.4% |
| Real Estate Leasing | JPY 1,118M | +13.7% | JPY 494M | +4.6% | 44.2% |
| Other (Brokerage, etc.) | JPY 27M | −59.2% | JPY 424M | −19.3% | - |
- DX New-Build Real Estate: Revenue +55.6% / Profit +121.9%. Sold 6 income-producing properties including "THE EDGE Ebisu" and 3 buildings in the "A*G" series. Completion and delivery of 2 condominiums (Okinawa) also contributed. Revenue of JPY 5.6B was recorded from key client Vortex
- Real Estate Leasing: Revenue +13.7%. Healthcare facility acquisitions and stable occupancy of existing assets contributed, maintaining a high margin of 44.2%
- DX Renovated Real Estate: Revenue −16.2% / Profit −41.5%. Average selling price per "Premium Renovation" unit rose to JPY 357M (+31.3% YoY), but the shift to higher price points depressed unit volumes, resulting in lower revenue
- DX Real Estate Value Enhancement: Revenue −19.7% / Profit −35.1%. Despite selling 6 land value-enhancement and 7 investment deals, revenue declined due to a tough comp from a large prior-year transaction (JPY 8B sale to Kasumigaseki Capital in the prior year)
Progress Versus Full-Year Guidance
Full-year results, following two mid-year upward revisions, exceeded the final guidance (revised December 2, 2025: revenue JPY 46B, operating income JPY 9.8B, net income JPY 6B) across all metrics—revenue at 101.2%, operating income at 102.3%, and net income at 102.3%. Compared to the initial forecast (announced February 14, 2025: revenue JPY 51B, operating income JPY 8.2B), revenue fell short (91.3%) but operating income outperformed by +22.3%, with profitability gains far exceeding the original plan.
| Item | Full-Year Actual | Final Revised Guidance (Dec. 2) | Achievement Rate |
|---|---|---|---|
| Revenue | JPY 46,544M | JPY 46,000M | 101.2% |
| Operating Income | JPY 10,024M | JPY 9,800M | 102.3% |
| Net Income | JPY 6,135M | JPY 6,000M | 102.3% |
- The real estate sales business is inherently lumpy, with revenue concentrated around property completion and delivery dates. The timing of large income-producing property sales and condominium completions tends to create significant H1/H2 imbalances
Changes To Guidance
Guidance was revised upward twice during the fiscal year. The second upward revision was announced on December 2, 2025. While revenue was lowered from the initial JPY 51B to JPY 46B, operating income was raised from JPY 8.2B to JPY 9.8B and net income from JPY 5.1B to JPY 6B, primarily driven by improved profitability through value enhancement. The revenue reduction reflected the deferral of certain project sales to the following fiscal year.
- Revenue: JPY 61,000M (+31.1% YoY)
- Operating Income: JPY 17,500M (+74.6% YoY)
- Recurring Profit: JPY 16,700M (+86.5% YoY)
- Net Income: JPY 11,600M (+89.1% YoY)
- EPS: JPY 1,520.37
Commentary On Shareholder Returns
The dividend policy was revised, raising the payout ratio target from "30%+" to "40%." The FY12/2025 annual dividend was JPY 338 (interim JPY 165, year-end JPY 173), yielding a payout ratio of 38.6%. For FY12/2026, the annual dividend is projected at JPY 520 (interim JPY 175, year-end JPY 345), an increase of JPY 182 YoY. Dividend funding sources include capital surplus.
Additionally, on the same day as the earnings release, the board resolved to reduce stated capital and capital reserves. Of the JPY 4,913M in stated capital, JPY 2,913M will be reduced, and of the JPY 4,163M in capital reserves, JPY 3,663M will be reduced, with JPY 6,577M transferred to other capital surplus. The purpose is to secure distributable reserves and enhance capital policy flexibility.
Financial Position
Shareholders' equity expanded to JPY 29.8B (+65.9% YoY) through the public offering (~JPY 7.4B raised) and retained earnings accumulation, lifting the equity ratio to 29.3% (+4.1pt YoY). Meanwhile, interest-bearing debt grew to JPY 65.5B in tandem with business expansion. Total assets surged +43.1% YoY to JPY 101.9B, reflecting a balance sheet in growth-investment mode.
- Key Figures
- Leverage Metrics
| Item | Value | Additional Information |
|---|---|---|
| Total Assets | JPY 101,949M | +43.1% YoY |
| └ Total Current Assets | JPY 90,811M | +43.8% YoY |
| └ Cash and Deposits | JPY 23,059M | +70.2% YoY |
| └ Properties Held for Sale | JPY 28,344M | +57.1% YoY |
| └ Work-in-Progress Properties for Sale | JPY 37,042M | +26.3% YoY |
| └ Total Non-Current Assets | JPY 11,129M | +37.4% YoY |
| Net Assets | JPY 29,949M | +65.2% YoY |
| Shareholders' Equity | JPY 29,820M | +66.0% YoY |
| Interest-Bearing Debt | JPY 65,595M | +36.8% YoY |
| └ Short-Term Borrowings | JPY 17,029M | - |
| └ Current Portion of Long-Term Debt | JPY 12,548M | - |
| └ Long-Term Debt | JPY 35,098M | - |
| └ Bonds (Current + Non-Current) | JPY 920M | - |
| Cash and Cash Equivalents | JPY 22,939M | +70.9% YoY |
| EBITDA | JPY 10,246M | Operating income JPY 10,024 + D&A JPY 221 |
(Note) As operating cash flow was negative, the cash flow-to-debt ratio and interest coverage ratio could not be calculated (also shown as "−" in company disclosures).
News Released Alongside The Earnings Announcement
- 2026/02/13Resolved to reduce stated capital and capital reserves. Approximately JPY 2.9B in stated capital and approximately JPY 3.6B in capital reserves will be reduced to secure distributable reserves and enhance capital policy flexibility (disclosed as a significant subsequent event in the earnings release)
Major Announcements During The Quarter
- 2025/11/13Released FY12/2025 Q3 earnings. Simultaneously announced a dividend forecast revision
- 2025/12/02Issued a second upward revision to full-year guidance. Operating income raised from JPY 8.2B to JPY 9.8B (revenue reduced from JPY 51B to JPY 46B). Annual dividend also increased from JPY 333 to JPY 335 Notice Regarding Revisions to Earnings Forecast and Dividend Forecast
Large-Shareholding Filings / Material Proposals Over The Past Year
- Eiichi Wakita (Representative Director & President): 13.71% → 11.49% (filed 2025/07/30) — No change in shares held; ratio decline attributable to dilution from increased shares outstanding (public offering)
- Summerbank LLC: 7.43% → 7.34% (filed 2025/11/04) — No change in shares held; ratio decline due to increased shares outstanding
- Summerriver LLC: 5.28% → 5.22% (filed 2025/11/06) — Shares held unchanged at 278,700; ratio decline due to increased shares outstanding
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