Frontier Management Inc.

Business Details

The flagship segment of an independent consulting firm, comprising four businesses: Management Consulting, M&A Advisory, Business Turnaround Support, and Other Businesses. Its main clients are financial institutions and corporations, and it provides consistent one-stop services from strategy formulation to execution support. Its strengths lie in its neutrality as an entity not affiliated with any specific capital group, and its diverse pool of professional talent including former lawyers, accountants, and investment bankers. This core business accounted for approximately 63% of consolidated net sales for FY2025 (ending December 2025).

Recent Overview

A correction was made to the cash flow statement in the earnings report, resulting in downward revisions to liquidity indicators

On May 19, 2026, a correction to the consolidated statement of cash flows in the FY2025 (ending December 2025) earnings report (kessan tanshin) was disclosed. Time deposits of ¥1,500 million with a maturity of six months were excluded from cash and cash equivalents and reclassified as expenditures for time deposits under cash flow from investing activities. As a result, cash flow from investing activities was revised downward from -¥1,160 million to -¥2,660 million, and cash and cash equivalents at end of period were revised downward from ¥5,421 million to ¥3,921 million. There were no changes to cash flow from operating and financing activities or to profit and loss figures.

Key Products

Growth Drivers

• Increased sales in the M&A Advisory Business due to strengthened sales structure for domestic, mid-sized transactions (up 10.4% year on year)
• Expansion of the domestic M&A market driven by factors such as the establishment of the Corporate Governance Code (the number of M&A deals in 2025 reached a record high)
• Expanding demand for turnaround support due to an increase in corporate bankruptcies (10,261 cases in 2025, exceeding 10,000 for the first time in 12 years)
• Sustained growth in the business consulting market (IDC Japan forecast: up 11.2% year on year in 2025, expected to reach ¥1,283.2 billion by 2029)
• Expansion of net sales to Tatsumi Shokai Co., Ltd., a major client (from ¥1,372 million to ¥1,654 million)

Risks

• Risk of temporary contraction in Management Consulting Business sales due to replacement of senior members as part of personnel optimization
• Reliance on a success-fee-dependent structure in the M&A Advisory Business (high uncertainty in revenue recognition timing leads to significant fluctuations in results during the period)
• Existence of a material event related to going concern assumptions due to operating losses recorded for two consecutive periods (funding secured through overdraft agreements with three financial institutions)
• Downward revision of cash and cash equivalents at end of period to ¥3,921 million due to correction of time deposit recognition, shrinking the liquidity buffer by ¥1,500 million compared to initial disclosure
• Risk of a decline in large-scale projects in the Business Turnaround Support Business (order volume remains steady, but fluctuations in project scale directly affect sales)
• Impact of economic downturns caused by geopolitical risk, US trade policy, price increases, etc. on client companies' investment appetite and M&A activity