SEYFERT LTD.

Business Details

Primarily serving beauty salon operating companies, the business consists of three services: (1) job advertising services centered on the job information site "re-quest/QJ navi" and others, (2) referral and staffing services for personnel placement, dispatch, and hair & makeup arrangement, and (3) education (other) services in partnership with the UK educational institution "City & Guilds". The business objective is to promote the vitalization of the beauty industry both domestically and internationally, and it maintains business relationships with 257 out of 270 beauty schools nationwide (coverage rate of 95.2%).

Recent Overview

In 1Q FY2026, revenue was ¥388 million (down 10.6% year on year), and the operating loss widened to ¥123 million.

Revenue declined across all services: job advertising services (revenue of ¥234 million, down 8.8% year on year), referral and staffing services (¥82 million, down 9.3%), and education (other) services (¥71 million, down 17.1%). While "beauqet", "Tablet Rental", "Certification", and new graduate recruitment products performed well, the decline in the listing unit price of "re-quest/QJ navi", the difficulty in acquiring new dispatch hair stylists for "re-quest/QJ casting", and the postponement of overseas training were drags on performance. SG&A expenses remained elevated at ¥316 million (up 2.6% year on year), and the structure in which they significantly exceed gross profit of ¥192 million continued. Net assets decreased by ¥131 million to ¥721 million due to the payment of a ¥9 million year-end dividend and the recording of a quarterly net loss of ¥122 million. There has been no change to the full-year earnings forecast (revenue of ¥1,903 million, operating loss of ¥306 million), and progress is stated to be broadly in line with the forecast.

Key Products

Growth Drivers

• Increase in the number of projects for "beauqet" (beauty salon promotional media) due to an improved repeat rate among existing clients, and improved gross profit margin from accumulated advertising delivery revenue for "Tablet Rental"
• Stable growth in education services driven by continued increases in the number of participating beauty schools, supporting beauty salon operating companies, and certified examiners for "Certification"
• Expansion in the number of exhibiting companies for new graduate recruitment products due to a doubling in the number of "re-quest/QJ Job Fair" events held (including the first-ever "City & Guilds Education Fair 2026")
• Recovery trend in the mid-career hiring market as the number of listings for "re-quest/QJ navi" exceeded the target for the current fiscal year and CVR showed an improving trend
• Improved profitability at the US hair salon (PIA HAIR SALON) due to an increase in average customer spend
• Ongoing consideration of capital policy measures (not yet reflected in earnings forecasts due to uncertain implementation timing)

Risks

• Risk of continued weakness in the listing unit price of the core product "re-quest/QJ navi": the promotional campaign is depressing unit prices, and the number of applications continues to fall short of the current fiscal year's target
• Persistently high SG&A expenses: against 1Q FY2026 SG&A expenses of ¥316 million and gross profit of ¥192 million, the inverted-spread structure continues, meaning any decline in revenue directly leads to a widening of losses
• The full-year FY2026 earnings forecast anticipates a significantly wider loss, with an operating loss of ¥306 million and a net loss of ¥311 million, and shareholder returns are to be suspended with a planned annual dividend of ¥0
• Difficulty in acquiring new dispatch hair stylists for "re-quest/QJ casting": the continued decline in the number of dispatched hair stylists and dispatch days is weighing on overall revenue from referral and staffing services
• Geopolitical risk related to overseas training: the postponement of the training visit from the UK due to the situation in the Middle East creates uncertainty in the revenue plan for education (other) services
• Risk of breaching financial covenants under the commitment line agreement (prohibition on negative non-consolidated net assets and prohibition on ordinary losses for two consecutive periods): if losses continue to widen, this could hinder the securing of liquidity
• Risk of deteriorating business conditions among key customers (beauty salon operating companies) due to labor shortages and rising costs in the beauty industry, which could lead to reduced demand for job advertising and staffing services
• Decline in the equity ratio (from 57.8% to 50.8%): net assets are rapidly decreasing due to the recording of losses and dividend payments, indicating a progressive erosion of the financial base