KIMURATAN CORPORATION

Business Details

Centered on real estate leasing/management and resale of renovated used properties. Builds a diversified profit model combining the leasing business operated by group subsidiaries, the resale business (renovation & resale) of used properties, and SwanStyle Corporation (Real Estate Specified Joint Enterprise), consolidated in April 2025. In FY2026 (ending March 2026), this segment accounted for ¥2,200 million (approximately 86.9%) of consolidated net sales of ¥2,533 million, making it the group's core segment.

Recent Overview

Net sales increased 60.5% due to growth in the resale business and M&A subsidiary revenue, but segment profit declined 19.9% due to increased head office expense burden.

Net sales for the Real Estate Business in FY2026 (full year) were ¥2,200 million (up 60.5% year on year). This was mainly attributable to the consolidation of SwanStyle Corporation through M&A (effective April 1, 2025, acquisition cost ¥200 million) and significant expansion of the used property renovation and resale business. On the other hand, segment profit was limited to ¥219 million (down 19.9% year on year) due to an increased burden of head office expenses. In addition, delays in the sale timing occurred for some income-producing properties scheduled for delivery in the current fiscal year, making steady realization of sales in the next fiscal year a challenge.

Key Products

Growth Drivers

• Net increase in subsidiary revenue through M&A (consolidation of SwanStyle Corporation, Isuto Group, and Kyuken Kizai Co., Ltd.)
• Expansion of the used property renovation and resale business (positioned as the core of the growth strategy, grew significantly in FY2026)
• Accumulation of stable revenue through new acquisition of leased properties and improved occupancy rates
• Expansion of the investor base and diversification of fundraising through the introduction of the Real Estate Specified Joint Enterprise (small-lot investment scheme)
• Securing funds for real estate investment, including M&A, through a third-party allotment of new shares (payment completed January 13, 2026, capital stock and capital reserve each increased by ¥299 million)

Risks

• Borrowings balance remains at a high level (¥7,360 million at end of FY2026 (ending March 2026)), and the interest expense burden is squeezing ordinary income/loss (interest expense of ¥135 million and ordinary loss of ¥57 million for FY2026 full year)
• Gross profit margin trending downward due to the rising proportion of the resale business and completed construction contracts (down 11.7 percentage points year on year on a consolidated basis)
• Segment profit declined 19.9% year on year to ¥219 million due to an increased burden of head office expenses, worsening profitability
• Delays have occurred in the sale timing for some income-producing properties scheduled for delivery in the current period, posing a risk to next period's performance
• Continued amortization burden of the goodwill balance arising from M&A (¥554 million at end of FY2026 (ending March 2026); goodwill amortization of ¥50 million for FY2026 full year)
• Equity ratio remains at a low level of 16.7% (end of FY2026 (ending March 2026)), and financial base fragility continues