TKP (3479) Q1 FY2027 Earnings Deep Dive Report: Record Performance and Progress in Growth Strategies

TKP Corporation (Securities Code: 3479) achieved a strong performance in the first quarter of the fiscal year ending February 2027 (March 1, 2026 – May 31, 2026), setting new record highs for consolidated net sales, operating profit, and ordinary profit for the same quarter . This favorable outcome is attributed to the steady performance of the core Space Revitalization Business, coupled with solid progress in the Riricara and On The Page businesses. Notably, the On The Page business achieved significant revenue and profit growth, turning profitable, due to the consolidation of former Escrit Co., Ltd.

I. Consolidated Performance Highlights and Key Factors

For Q1 FY2027, consolidated net sales increased by 41.5% year-on-year to 34.6 billion JPY , operating profit rose by 41.8% to 3.07 billion JPY , and ordinary profit grew by 42.7% to 2.37 billion JPY . Net profit also increased by 9.4% to 1.19 billion JPY, marking substantial growth across all key profit metrics.

This strong performance was primarily driven by the following factors:

1. Robust Growth in the Space Revitalization Business: TKP's core Space Revitalization Business saw its net sales increase by 20.5% year-on-year to 15.0 billion JPY, and operating profit by 14.8% to 2.3 billion JPY, both record highs for the quarter. This success is due to the expansion of a one-stop service system catering to corporate office needs, ranging from short-term use for meetings and seminars to long-term use of rental offices.
2. Dramatic Growth and Profitability Turnaround in the On The Page Business: The consolidation of former Escrit Co., Ltd. significantly contributed to the On The Page business, with net sales surging by 178.4% year-on-year to 11.58 billion JPY. Operating profit also turned profitable , rising from a loss of △0.77 billion JPY in the prior year to 0.16 billion JPY, indicating accelerated synergy creation from the integration.
3. Increased Sales in the Riricara Business: The Riricara business recorded a 2.6% year-on-year increase in net sales to 8.01 billion JPY. However, operating profit decreased by 23.0% to 0.08 billion JPY, mainly due to increased promotional expenses.

Detailed figures can be found in the consolidated Statement of Income (P/L) below.

This consolidated Statement of Income provides specific figures for sales and operating profit across each segment. Notably, the On The Page business shows a dramatic increase in sales, approximately 2.8 times year-on-year, and a return to profitability in operating income. This clearly demonstrates the positive impact of the former Escrit Co., Ltd. consolidation on performance. Furthermore, the core Space Revitalization Business maintains steady growth, strongly supporting the overall results.

II. Segmental Status and Strategic Progress

In the Flexible Office Business , TKP opened 5 new facilities , including CROSSCOOP and fabbit, during Q1, adding 12,418 tsubo (approx. 40,980 square meters) of space. This brings the total number of directly managed facilities nationwide to 248, with a total contracted area of 125,305 tsubo. Sales per tsubo remained strong, increasing by approximately 4% year-on-year to 50,902 JPY, indicating improved facility utilization and profitability. Plans are also underway to introduce 38 units of the individual work booth 'TKP BizBOX' across 10 facilities nationwide to cater to short-term work and online meeting demands.

For the Hotel and Training Accommodation Business , TKP began operating two new APA Hotels in March (Himeji City, Hyogo Prefecture, and Uozu City, Toyama Prefecture), bringing the total number of operated APA Hotels to 22 . This expands the total number of directly managed accommodation facilities nationwide to 34. While RevPAR (revenue per available room) decreased by approximately 4% year-on-year to 8,653 JPY, partly due to the increase in the number of facilities, the expansion of facilities is strengthening the revenue base.

The On The Page business has completed the reorganization of sales and back-office functions for former Novarese Co., Ltd. and former Escrit Co., Ltd., accelerating the creation of integration synergies . This has led to a significant year-on-year increase in sales and a return to profitability in operating income. The rapid growth of this business holds substantial potential for contributing to future consolidated performance.

This slide illustrates the trends in sales and operating profit for the On The Page business , allowing for a visual understanding of its dramatic transformation . Specifically, the sharp increase in sales (up 178.4% year-on-year) and the turnaround to profitability in operating income during Q1 FY2027 clearly demonstrate the positive impact of the former Escrit Co., Ltd. consolidation on the business. The recovery and growth of this segment signify its role in diversifying the TKP Group's revenue structure and emerging as a key growth driver.

III. Future Growth Strategies and Financial Foundation

TKP has made a strong start towards achieving its full-year earnings forecast. While the Space Revitalization Business remains the core, the company is strengthening collaboration across all segments to promote group synergies in earnest . Specifically, TKP aims to create new value through sales collaborations utilizing TKP facilities (such as showroom expansions) and inter-company personnel exchanges.

Furthermore, TKP has decided to conduct a share buyback as part of its shareholder return policy . The company plans to acquire up to 2 million shares, representing 5.23% of outstanding shares, with a maximum value of 3.5 billion JPY, between June 12 and August 24, 2026. This decision aims to implement agile capital policies and enhance shareholder returns, based on the company's balance sheet and operating cash flow situation.

This slide provides details on the decision to conduct a share buyback , clearly communicating a significant capital policy and shareholder return initiative . The scale of up to 2 million shares (5.23% of outstanding shares) and a total value of 3.5 billion JPY indicates the company's recognition of its own value and strong commitment to shareholder returns . This sends a positive message to the market, reflecting the company's financial health and confidence in future growth.

Moreover, the self-capital ratio has recovered to 30.0% , indicating a strengthening of the financial foundation. This demonstrates that the company maintains a sound financial structure even with the increase in tangible fixed assets due to the acquisition of two hotels and the consolidation of TKP Office (CROSSCOOP operating company) on the balance sheet.

As a new growth strategy, TKP has launched a new wedding brand, 'THE SELECT' . This brand aims to capture new demand by offering low-priced weddings starting from 10,000 JPY per person, with flexible options such as membership-fee parties and 1.5-tier receptions, catering to diverse styles. This initiative leverages TKP's expertise in space utilization services and food & beverage/banquet operations to create new revenue opportunities.

Conclusion

TKP's first quarter of FY2027 marked a very strong start, achieving record highs in consolidated net sales, operating profit, and ordinary profit . The robust growth of the core Space Revitalization Business, coupled with the turnaround to profitability in the On The Page business, significantly boosted overall performance. Diverse growth strategies and shareholder return initiatives, such as the share buyback, the launch of the new wedding brand, and the introduction of TKP BizBOX, are being steadily executed , suggesting further development in the future. The financial foundation is also stable, with the self-capital ratio recovering to 30%, establishing a solid base for business expansion.