SPACE CO.,LTD.

Business Details

The company handles everything from planning, consulting, design, and supervision to construction for commercial facilities such as shopping centers, department stores, specialty stores, and restaurants. The market fields consist of five categories: complex commercial facilities, food supermarkets/convenience stores, various specialty stores, restaurants, and services. In February 2026, the subsidiary M.S.C. Co., Ltd. was transferred and excluded from the scope of consolidation. Starting from FY2026 (ending March 2026), the company formulated a three-year medium-term management plan titled "Expansion Growth," setting quantitative targets of ¥80.0 billion in sales, an 8% operating margin, 12% ROE, and a dividend payout ratio of 50% or more.

Recent Overview

Both Q1 net sales and operating profit increased year on year, driven by the services field

In the first quarter of FY2026 (ending December 2026) (January to March 2026), net sales were ¥18,242 million (up 2.1% year on year) and operating profit was ¥1,856 million (up 8.8% year on year). Gross profit increased due to improvement in the outsourcing cost ratio, and SG&A expenses were also reduced from ¥801 million in the same period of the prior year to ¥733 million. By market field, services (medical/welfare/hotels) grew to ¥5,016 million (up 13.3% year on year), various specialty stores grew to ¥5,528 million (up 5.4% year on year), and restaurants grew to ¥2,100 million (up 9.6% year on year), while complex commercial facilities/general supermarkets declined to ¥3,748 million (down 14.1% year on year) due to the completion of large-scale projects from the prior period. The consolidated subsidiary M.S.C. Co., Ltd. was transferred effective February 27, 2026, and excluded from the scope of consolidation. The full-year earnings forecast remains unchanged (net sales of ¥72,000 million, operating profit of ¥5,040 million).

Key Products

Growth Drivers

• Acquisition of multiple large-scale renovation projects in the services field (medical/welfare facilities, hotels) (Q1 FY2026: ¥5,016 million, up 13.3% year on year)
• Increase in flagship and high-class projects for apparel and accessory stores and existing store revitalization renovation projects for drugstores in the various specialty stores field (Q1 FY2026: ¥5,528 million, up 5.4% year on year)
• Steady growth in new store openings and existing store revitalization renovation projects in the restaurant field due to store expansion efforts (Q1 FY2026: ¥2,100 million, up 9.6% year on year)
• Increase in gross profit due to improvement in the outsourcing cost ratio (Q1 FY2026 gross profit of ¥2,590 million, up 3.3% from ¥2,508 million in the same period of the prior year)
• Steady capital investment demand for commercial facilities against the backdrop of increasing inbound demand and progress in urban redevelopment
• Deepening of existing businesses, challenges toward value-creation businesses, and strengthening of the value chain based on the medium-term management plan "Expansion Growth" (2026-2028)
• Improvement in productivity through the use of digital technology for operational efficiency and organizational restructuring

Risks

• Risk of cost ratio deterioration due to soaring material prices and rising labor costs
• Tightening of labor supply and demand due to compliance with overtime work limit regulations in the construction industry
• Risk of economic downturn due to US trade policy, Middle East affairs, etc., and resulting suppression of customers' capital investment
• Demand fluctuations in specific market fields, as seen in the decline in sales due to the completion of large-scale projects in the complex commercial facilities/general supermarket field (Q1 FY2026: down 14.1% year on year)
• Decrease in renovation projects in the food supermarket/convenience store field (Q1 FY2026: down 3.2% year on year)
• Risk of declining profit levels, with the full-year net profit forecast down 12.5% year on year (¥3,300 million) compared to the prior year's actual results
• Changes in the business foundation due to the reduction in the scope of consolidation following the transfer of the subsidiary (M.S.C. Co., Ltd.)