Kyoei Security Service Co.,Ltd.

Business Details

The Group centers on personnel-based security services including Facility Security, Traffic Control Security, event security, and Bodyguard services, while also providing a broad range of personnel services extending into adjacent areas such as staffing and Condominium Management Agency (dispatch of building managers). The Group consists of a single Security Business segment and has expanded its scale through the enlargement of consolidated subsidiaries via M&A. Ongoing contracts with terms of one year or longer account for the majority of revenue, forming a stable earnings base.

Recent Overview

Achieved cumulative 4Q revenue of ¥11,583 million and operating profit of ¥1,038 million; progress against full-year forecast reached 77% for revenue and 80% for operating profit

In the cumulative fourth quarter of the consolidated fiscal period from April 1, 2025 to March 31, 2026 (an interim period within the 16-month fiscal period), the company recorded revenue of ¥11,583 million, operating profit of ¥1,038 million, ordinary profit of ¥1,097 million, and quarterly net income attributable to owners of parent of ¥643 million. Contributing factors included M&A effects (newly consolidated Dentsu Traffic Co., Ltd. and Joso Security Co., Ltd.), contract fee revisions, an increase in the number of contracts, and temporary contracts related to the

Key Products

Growth Drivers

• Continued expansion of consolidated subsidiaries through ongoing M&A (two new companies added as of 4Q: Dentsu Traffic Co., Ltd. and Joso Security Co., Ltd.)
• Increase in unit prices through fee revisions for ongoing contracts and scale expansion through increased contract numbers
• Increase in revenue from temporary contracts related to the "2025 Osaka-Kansai Expo" related operations (cumulative 4Q: ¥1,557 million)
• Improved profitability through accelerated group management (unification of the Kanto-area business structure through the merger of KSS Co., Ltd. and Neo Amenity Service Co., Ltd.)
• Promotion of effective utilization of group-held assets through the establishment of a real estate leasing management-function subsidiary
• Expansion of personnel scale through steady recruitment activities and synergy effects from sharing the customer base

Risks

• The effective job-openings-to-applicants ratio for security personnel occupations remains at an extremely high level, and the labor shortage has become severe enough to constrain business activities
• While wages continue to rise, the labor share in the security industry is already high, limiting the ability to sustain wage increases amid rising prices
• Downward pressure on fees due to price competition with competitors (approximately 10,000 companies domestically)
• Risk related to the recoverability of goodwill acquired through M&A (goodwill balance of ¥650 million at end of 4Q, an increase of ¥285 million from the end of the previous fiscal year)
• Difficulty in performance comparison and increased complexity in management control due to the change in fiscal year-end (from March to July) resulting in a 16-month fiscal period
• Integration risks associated with the merger between consolidated subsidiaries (effective July 1, 2026), and recording of extraordinary losses such as a loss on retirement of shares held reciprocally of ¥23 million