ENVALITH
株式会社ノバック logo

NOVAC CO.,LTD.

5079・Standard Market・Construction

Official website
株式会社ノバック logo
NOVAC CO.,LTD.5079

Business

Novac Co., Ltd. was founded in 1965 and is headquartered in Himeji City, Hyogo Prefecture, operating as a mid-tier general contractor (listed on the TSE Standard Market). In its Civil Engineering Works Business, the company undertakes nationwide social infrastructure construction (roads, rivers, dams, shield tunneling works, etc.) ordered by regional bureaus of the Ministry of Land, Infrastructure, Transport and Tourism, local governments, and expressway companies. In its Building Construction Business, the company focuses mainly on private multi-family housing construction centered in the Greater Tokyo, Kansai, and Chubu regions. In February 2025, the company made TOMTEN Co., Ltd. a subsidiary, aiming to expand business as a consolidated group. Consolidated net sales for FY2025 (ending April 2025) were ¥27,512 million, and orders received totaled ¥36,712 million.

Business Model

The company maintains a 100% prime contractor ratio (for projects of ¥50 million or more under the company's internal standards, over the most recent five fiscal periods) across its two major segments—Civil Engineering Works and Building Construction—eliminating subcontracted work and directly securing large-scale, high-margin projects. The Civil Engineering Works Business centers on public works ordered by government agencies, ensuring stable earnings (operating margin of 10.9%), while the Building Construction Business pursues scale mainly through private-sector multi-family housing construction in the three major metropolitan areas. The year-end order backlog of ¥51,601 million underpins revenue visibility for the coming periods.

Company Strengths

The company has maintained a 100% prime contractor ratio (for projects subject to the company's standard of ¥50 million or more) over the past five fiscal periods. This significantly exceeds the national average of 60.6% (FY2024), enabling direct orders for large-scale projects and securing high profit margins. The Civil Engineering Works Business achieved an operating margin of 10.9% (FY2025, ended April 2025), a high level.

As of the end of April 2025, 137 out of 279 employees held chief engineer licenses, a holding rate of 49.1%. This is approximately twice the national average of around 25%, enabling optimal staffing and improved construction efficiency, thereby ensuring quality control and the establishment of a nationwide construction capability.

As of the end of April 2025, the year-end backlog stood at ¥15,884 million for the Civil Engineering Works Business and ¥35,717 million for the Building Construction Business, totaling ¥51,601 million. This is equivalent to approximately 1.9 times the fiscal year's net sales of ¥27,512 million, ensuring high visibility for revenue recognition in future periods.

ENVALITH's Perspective

Operating profit for FY2026 (ending April 2026) reached ¥1,878 million (up 118.4% year on year), marking a substantial increase in earnings. The primary driver of the company-wide earnings improvement was the Building Construction Business, which swung from an operating loss of ¥159 million in the previous period to an operating profit of ¥965 million. This can be viewed favorably as concrete evidence that the management policy of thorough order selection and price pass-through has borne fruit in tangible figures. That said, the operating margin of the Civil Engineering Works Business declined from 10.9% to 8.4%, and continued attention to the earnings balance across segments is warranted.

The company's guidance for FY2027 (ending April 2027) projects sales of ¥32,000 million (down 9.5% year on year) and operating profit of ¥1,300 million (down 30.8% year on year), a substantial decline. The main factor cited is the impact of percentage-of-completion progress tied to the commencement timing of large-scale projects, which, given the high level of backlog at ¥59,189 million, can be interpreted as a temporary fluctuation. On the other hand, changes on the financial side also warrant attention, including a sharp rise in commitment fees to ¥149 million (roughly 20 times the previous period) and the new procurement of ¥4,030 million in short-term borrowings.

The Medium-Term Management Plan 2024-2027 (NOVAC VISION) sets targets of sales exceeding ¥40 billion, an operating margin of 8% or higher, and ROE of 9% or higher. FY2026 (ending April 2026) sales of ¥35,363 million and an operating margin of 5.3% still fall short of these targets, and the FY2027 (ending April 2027) forecast (sales of ¥32,000 million and an operating margin of 4.1%) points to a further setback. While public construction investment remains solid as a market environment factor due to the National Resilience Plan, external factors such as persistently high construction material prices and rising labor costs pose a risk that could constrain achievement of the profit margin target.

Growth Strategy

Under the Medium-Term Management Plan 2024–2027 'NOVAC VISION,' the company aims to achieve net sales of ¥40 billion or more, an operating margin of 8%, and ROE of 9%.

The company aims to improve profit margins by eliminating low-profitability projects and thoroughly implementing price pass-through and cost reductions. In FY2026 (ending March 2026), the operating margin improved from 3.1% to 5.3%, and the Building Construction Business turned profitable. However, further improvement is needed to achieve the medium-term target of 8%.

Through the promotion of DX, including system implementation and the use of ICT technologies, the company aims to improve construction efficiency and labor-saving as well as operational efficiency. It will also concurrently promote improvements to the workplace environment and address the cap on overtime work as part of work-style reform.

The company will promote the securing and development of human resources by maintaining and strengthening its high ratio of certified site supervisors while improving brand recognition and engagement through branding efforts. This also includes addressing the construction industry's '2024 problem' (overtime work cap regulations).

The company aims to achieve net sales of ¥40 billion or more by continuing to build up order intake while maintaining its two-pillar structure of civil engineering and building construction. Order intake in FY2026 (ending March 2026) increased to ¥42,938 million (up 17.0% year on year), but the sales forecast for FY2027 (ending March 2027) of ¥32,000 million deviates significantly from the target, with the timing of commencement of large-scale projects being a challenge.

Last updated: July 17, 2026